1:00amCDT [Dow Jones]—
German Retail Sales Up
Germany posted its biggest monthly retail sales increase in over three years in August, registering a 2.5% expansion
from July in seasonally-and calendar-adjusted real terms, the country's statistics office says Tuesday. This expansion
smashes analysts' average forecast for 0.5% growth and follows a sharp decline of 1.1% in July. Most recent business
and consumer confidence indicators suggest worsening sentiment, though, and analysts tend to look at retail sales data
with caution because they are volatile and prone to large revisions. (emese.bartha@wsj.com; @EmeseBartha)
Contact us in London. +44-20-7842-9464 markettalk@wsj.com (END) Dow Jones Newswires
0603 GMT [Dow Jones] 1:03amCDT
Eurozone Weak Sentiment
With the USD hitting four year highs against a basket of currencies, and the euro continuing its inexorable slide, the
pressure for the European Central Bank to do more to meet its mandate shows no sign of abating, says Michael Hewson
at CMC Markets. Says sentiment continues to remain fragile, as shown by the weak TLTRO demand. "This week's ECB
rate meeting in Naples could well see a little more colour added to last month's announcement of a new ABS program,
though it is hard to see what difference any further measures can make with loan demand so weak." EUR/USD trades at
1.2685. (nick.cawley@wsj.com) Contact us in London. +44-20-7842-9464 markettalk@wsj.com (END) Dow Jones
Newswires
0614 GMT [Dow Jones] 1:14amCDT
U.K. House Prices Cool
Some evidence that the UK housing market is cooling arrives, which could be a welcome development for BOE policy
makers and potential home buyers. The Nationwide Building Society said its house price index fell 0.2% in September
from August, although it was up 9.4% on September 2013. That's not a massive decline, but it did bring a run of 16
straight monthly increases to a conclusion. In London, the annual rise slowed to 21% in 3Q from 25.8% in 2Q, but that
was enough to push the price of an average home to a record high of GBP401,072, or 31% above the pre-crisis peak.
(paul.hannon@wsj.com Twitter: @PaulHannon29) Contact us in London. +44-20-7842-9464 markettalk@wsj.com
(END) Dow Jones Newswires
By William Horobin 1:45amCDT
French Consumer Spending Up
PARIS--French consumer spending rebounded in August after a fall in July when households spent less on cars and
food, statistics agency Insee said Tuesday. Consumer spending in the eurozone's second largest economy rose 0.7% in
August from July, when it fell 0.7%, Insee said. Food spending fell 1.5% month-on-month in July and rebounded 0.8%
in August. Spending on automobiles also recovered slightly in August, rising 0.1% month-on-month after a 1.8% drop
in July. The overall level of consumer spending in August was 1.4% higher than August 2013, Insee said. Write to
William Horobin at william.horobin@wsj.com (END) Dow Jones Newswires
By William Horobin 1:45amCDT
French PPI Falls, at Faster Rate
PARIS--The fall in French producer prices accelerated in August, mainly due to weaker energy and refining prices,
French statistics agency Insee said Tuesday. France's producer price index fell 0.3% in August from July, when it fell
0.2%. On year, producer prices were 1.4% lower in August; the sharpest year-on-year fall since March. -Write to
William Horobin at william.horobin@wsj.com (END) Dow Jones Newswires
LONDON, Sept 30 (IFR) 2:10amCDT
10-year Spreads, Germany, Italy, Spain
Spreads are tighter through the first hour with Spain and Italy leading the way around 3bp tighter to Germany in 10s.
The key is that 129bp has been able to hold for Spain/Germany which keeps thoughts of a double bottom from 110bp at
bay. 131bp is 38.2% Fibo close by here too. 10yr Italy/Germany was able to hold the June and early Sep lows recently
to form a triple bottom. The widening has however stopped short of the 147/150bp region as the first real resistance.
John.ratcliffe@thomsonreuters.com/mc Copyright (c) 2014 Thomson Reuters – IFRMarkets
FRANKFURT 2:58amCDT
Number of German Workers Unemployed Rises
German unemployment unexpectedly increased in September, the country's labor agency said Tuesday, suggesting that
the labor market in Europe's largest economy is beginning to weaken after a contraction in output last quarter.
The number of German people unemployed rose by 12,000 in September after adjustment for seasonal variations in the
data. This compares with an increase of 3,000 in August, which was revised upward. Analysts surveyed by The Wall
Street Journal had forecast a decline of 2,000. The unemployment rate was 6.7%, unchanged from August.
The data follow a string of figures showing weakening consumer and business confidence, dampened in particular by
the tension between Russia and the Ukraine. However, German retail sales for August surprised on the upside Tuesday
with an increase of 2.5% on the month, adjusted for inflation, the largest growth rate since June 2011.
Write to Emese Bartha at emese.bartha@wsj.com
Corrections & Amplifications
The headline of this story was corrected at 0841 GMT. The original misatated that the unemployment rate had risen. The
number of unemployed had risen but the rate had stayed the same. (END) Dow Jones Newswires
By Jason Douglas and Jon Sindreu 3:30amCDT
U.K. Economy 2Q Grows Faster, Courtesy of Whores & Drugs
LONDON--The U.K. economy grew at a faster pace than initially thought in the second quarter, according to official
estimates Tuesday that incorporate a range of changes to how Britain calculates the size and shape of its economy.
The changes, part of a sweeping overhaul of statistical methods across Europe, also show the U.K. had a shallower
recession than earlier estimates implied and regained its pre-recession peak sooner. The Office for National Statistics
said the U.K. economy expanded 0.9% in the second quarter compared with the first, an annualized rate of 3.7%. The
agency's previous estimate put growth at 0.8% quarter-on-quarter. Data showed the expansion was led by the services
sector and construction. Business investment also aided growth, rising 3.3% on the quarter.
Alongside the most recent numbers, the ONS also Tuesday published revisions to past data stretching back decades.
The new figures include not only fresh data on the economy's performance but also reflect changes to the methodology
the ONS uses to calculate the economy's size and performance. Among the changes: drug-dealing and prostitution
now count towards gross domestic product and research and development spending has been reclassified as
investment. The changes bring the U.K. into line with new European and international standards. The ONS said
its revisions and methodological changes mean it now estimates Britain's economy shrank 6% during a downturn that
lasted from the second quarter of 2008 to the end of the second quarter of 2009. The agency previously said the
economy shrank 7.2%. The revision means the economy is now estimated to have surpassed its prerecession size in
the third quarter of 2013--not the second quarter of 2014 as previously thought. Fresh data shows the economy grew
faster in 2012 than past estimates implied. The new data are unlikely to radically alter the course of British fiscal or
monetary policy. Finance Minister George Osborne on Monday proposed new welfare cuts to help eliminate the U.K.'s
budget deficit, now estimated at 5.6% of annual gross domestic product in the financial year ending in March.
Bank of England officials, meanwhile, have signaled they are unlikely to raise interest rates until Britons' incomes are
poised to grow at a much faster pace. Also Tuesday, the ONS said the U.K.'s current account deficit widened in the
second quarter to 23.1 billion pounds ($37.5 billion) from a revised GBP20.5 billion in the first quarter. The ONS said
the U.K.'s trade deficit narrowed but British firms' overseas profits shrank. Write to Jason Douglas at
jason.douglas@wsj.com and Jon Sindreu at jon.sindreu@wsj.com (END) Dow Jones Newswires
By Paul Hannon 4:00amCDT
Eurozone Inflation Falls To Lowest Level Since 2009
The annual rate of inflation in the eurozone fell further below the European Central Bank's target in September, and to
its lowest level since October 2009. The decline is a setback to the ECB which, earlier this month, launched a series of
measures designed to boost growth and start to move the inflation rate back toward its goal of just below 2.0%. It is too
soon for those measures to have had an impact, but the further drop in the rate at which consumer prices are increasing
underlines the severity of the threat confronting policy makers. The European Union's statistics agency said consumer
prices were just 0.3% higher than in Sept. 2013, as the inflation rate slowed from 0.4% in Aug. The inflation rate has
now been below 1.0% for 12 straight months. Figures released by Eurostat also showed that the jobless rate was
unchanged at 11.5% in August from in July, while the number of people without work fell by 137,000, leaving 18.35
million unemployed. More up-to-date figures for Sept. released by Germany's labor agency Tuesday recorded a surprise
12,000 rise in the number of people without work.
The decline in the inflation rate was expected by forecasters and is unlikely to prompt an immediate response from the
ECB when its governing council meets on Thursday in Naples, Italy. Policy makers are likely to take some time to
assess the impact of the two waves of stimulus measures announced since June, which include cheap, medium-term
loans to banks, cuts in key interest rates, and purchases of asset-backed securities and covered bonds. There are reasons
to expect the rate of inflation will begin to pick up from next month. With food and energy prices very low in Europe
last fall, annual comparisons for these sectors should start rising in October. Analysts refer to these statistical forces as
base effects.
However, inflationary pressures are likely to remain very weak. Surveys of businesses have pointed to a weakening of
activity as the third quarter has progressed, making it unlikely that the eurozone economy has picked up significantly
after stagnating in the second quarter.
And other surveys released on Monday showed that businesses and consumers across the 18 countries that share the
euro were more downbeat about their prospects in September than at any time since the end of 2013, likely reflecting
disappointment with the pace of the eurozone's economic recovery and the conflict in Ukraine.
Worryingly for the ECB, businesses said they expect their selling prices to be weaker than they did before the measures
were announced, while consumers also lowered their expectations for inflation. There are some signs of a pickup in
consumer spending. Germany's statistics agency said retail sales in the eurozone's largest member surged 2.5% in Aug.,
the largest month-to-month rise in overt three years. And France's statistics agency said consumer spending rose by
0.7% in Aug., having fallen at the same rate in July. Emese Bartha in Frankfurt and William Horobin in Paris
contributed to this article Write to Paul Hannon at paul.hannon@wsj.com (END) Dow Jones Newswires
By Giada Zampano 4:00amCDT
Italian Inflation Falls
ROME--Italy's consumer price index fell for a second time in a row on a yearly basis in September, driven mainly by
falling prices in the energy sector, statistics institute Istat said Tuesday, confirming a deflationary trend in the eurozone's
third largest economy. Italy's national inflation index fell 0.3% from August and dropped 0.1% from September last
year, Istat said, citing preliminary data. The year-on-year drop is the second consecutive one since August, when the
index dropped by 0.1% for the first time since September 1959, raising concerns of deflation.
The annual decline in September was again led by an increased drop in the prices of energy, which fell by 2.8% after a
1.2% contraction in August. Core inflation, which excludes volatile fresh food and energy prices, remained stable
in September at an annual rate of 0.5%. Italy's Harmonized Index of Consumer Prices, a European Union measure
that gives more weight to sales and discounts, rose 1.8% from August, while it decreased by 0.2% on the year, Istat said.
-Write to Giada Zampano at giada.zampano@wsj.com
Corrections & Amplifications
This article was corrected at 10:47 GMT to change 0.2% on month to 0.2% on year. (END) Dow Jones Newswires
LONDON, Sept 30 (IFR) 4:35amCDT
Greek Bonds Slammed
Greek bonds are getting slammed again, with 10-year spreads out another 25 bps to Bunds on Tradeweb, to +575 bps
last. This represents a cheapening of over 100 bps from earlier in the month, and spreads haven’t been this wide since
February. Outright 10-year yields meanwhile have leapt over 100 bps in the last two weeks to 6.72%, and also haven’t
been this high since May. On a price basis, the 2/33s are trading heaviest, down just over two points on the day. The
pressure comes as the ECB/EU/IMF Troika arrives in Athens today to discuss the sovereign’s 2015 budget and
associated projections, as well as the possibility of Greece successfully leaving its bailout program. Paradoxically, while
it should be good news for the sovereign, markets have been worried that a Greek exit from its program would remove
external oversight of ongoing fiscal and structural reforms. In the background are also concerns about SYRIZA gaining
ground in opinion polls, even if elections are set to be a long way off. Michael.Cartine@thomsonreuters.com/dc
Copyright (c) 2014 Thomson Reuters – IFRMarkets
0940 GMT 4:40amCDT
Those Constant Issues
The latest gross domestic product figures for the U.K., which for the first time move to the new European rules, show
illegal activities making up just 0.5% of the British economy in 2012. According to the Office for National Statistics,
however, these operations have not significantly changed the relative level of GDP from one year to the other, meaning
they have kept their contribution to output constant through time. (jon.sindreu@wsj.com) (END) Dow Jones Newswires
4:42amCDT
U.K. Current Account Deficit Grows… Borrowing
The U.K.'s current account deficit grew to GBP23.1 billion in the second quarter of the year, up from GBP20.5 billion in
the first quarter. Despite the trade deficit narrowing, the U.K.'s net borrowing surpassed median forecasts by economists,
as direct investment surplus dropped compared to the first quarter of 2014. (jon.sindreu@wsj.com) (END) Dow Jones
Newswires
Snapshot: 5:21amCDT
-Euro tumbles; 10-year Treasury yield at 2.51%; U.S. stock futures gain; crude futures rise; gold lower
-Watch for: Chicago PMI, Consumer Confidence Index, Case-Shiller Home Prices
News: Eurozone Inflation Hits Five-Year Low; Germany, France Send Mixed Economic Signals; Japan's Economy
Remains Fragile
Markets Outlook:
Forex:
The euro tumbled to a two-year low Tuesday as the latest slump in eurozone inflation cranked up the pressure on the
European Central Bank to further ease monetary policy.
The common currency, already dented by a rising dollar, extended declines after data showing consumer price inflation
in the eurozone fell to 0.3% in September. That marks the slowest rate since October 2009 and a fall even further below
the ECB's target rate of close to 2%.
The central bank, which has its October policy announcement Thursday, has already stepped up efforts to head off the
threat of deflation, with a surprise interest rate cut last month and plans to purchase bundles of private debt. But many
analysts think the central bank will eventually have to opt for large-scale purchases of government bonds-known as
quantitative easing-to pull the currency bloc out of its malaise. That prospect would further weaken the currency.
The euro was trading 0.6% lower against the buck at $1.2604, its weakest since September 2012. The euro also fell more
than 0.3% against the pound to its lowest in more than two years.
"Inflation is the ECB's official argument that might lead to QE," said Lutz Karpowitz, a currency strategist at
Commerzbank.
Elsewhere, the U.S dollar took a breather in Asia as its longest rally slowed, with the the ICE DXY U.S. Dollar Index
falling as much as 0.36%. However, the dollar continued to trade near four-year highs, against a basket of six major
currencies.
"There were further signs of volatility as the U.S. market bounced around. With no macro data of merit, U.S. and
European investors watched the developing political escalations in Hong Kong," Evan Lucas, market strategist at IG
Markets wrote in a note Tuesday.
The slowing U.S. dollar helped pare losses in the Australian dollar and the New Zealand dollar, which had plummeted
over the past few days.
Bonds:
The U.S. Treasury market continued to range trade as investors deliberate the timing of the first Federal Reserve rate
hike.
The 10-year cash yield has been stuck in a rough 2.30%-2.70% range since mid-May, and will need a substantial
nonfarm payroll miss Friday, on either side, to break out. Ahead Tuesday, Chicago PMI is due for release, and is usually
seen as a good preview of Wednesday's ISM manufacturing. Deutsche Bank looks for the headline to slide a touch lower
to 62.0 from 64.3 in August.
At 0507 ET, the 10-year Treasury yield was 2.51% and the December future was 5/32 lower at 124-195.
Equities:
U.S. stock futures pointed to a slightly higher start but momentum could swing either way with plenty of key data
expected shortly after the opening bell.
"Chicago PMI and the consumer confidence readings will be under scrutiny and again if stocks are to benefit we're
going to be looking for numbers that fall in the so-called goldilocks zone," wrote Joao Monteiro, analyst at Valutrades.
"Anything too feisty will potentially be priced as baiting the Fed into a quick rate hike."
In corporate news, SoftBank's discussions to acquire DreamWorks Animation have cooled, according to people familiar
with the matter, less than two days after word first emerged of the talks.
It wasn't immediately clear what had happened between Saturday, when the talks were under way, and Monday. It
remained possible that negotiations could restart, two of the people said. The two sides could ultimately strike a deal
other than an outright takeover, one of the people said, for instance some kind of content partnership.
Executives at Pacific Investment Management Co. hit the phones Monday in a campaign to persuade clients to stick
with the firm, even as Wall Street traders placed bets against its holdings, seeking to exploit the sudden departure of cofounder Bill Gross.
European Union regulators said Tuesday they believe that tax deals granted to Apple in Ireland constitute illegal state
support for the U.S. company, in a letter to the Irish government that set out the reasoning behind the decision to open
an in-depth investigation in June.
In other Apple news, Chinese regulators gave the final approval needed for Apple to sell its new iPhone 6 in China,
according to official media on Tuesday. The official Xinhua News Agency said that China's Ministry of Industry and
Information Technology granted a network access license to the company's latest smartphone.
Boeing said it would move up to 1,400 jobs and change or eliminate hundreds of others over the next three years as part
of the consolidation of its defense operations away from its manufacturing base in Washington state.
Wal-Mart named Instagram Chief Executive Kevin Systrom to its board Monday in a bid to expand its technology
expertise to better compete with Web rivals like Amazon.com.
Commodities:
Crude oil was slightly higher in European trade, and the gap between the contracts on either side of the Atlantic was
closing, noted analysts at Energy Aspects.
"The narrowing of the WTI-Brent spread was long overdue," they said. It has come now because the WTI market is
being strengthened by buyers positioning themselves for the refinery turnaround season, when crude is normally in more
plentiful supply. This has been delayed because "extremely strong refining margins have made refineries push back
maintenance work," and the U.S. has imported less crude because European crude has remained comparatively
expensive, Energy Aspects said.
The price difference between the two contracts is at $2.72 a barrel, its narrowest in over a year.
At 0434 ET, Brent crude oil for November delivery was up 12 cents at $97.32 a barrel on ICE Futures Europe.
November WTI was up 4 cents at $94.61 a barrel on the New York Mercantile Exchange.
Gold prices got back into the losing column again in Europe, finding the prior session's support to be fleeting as the
dollar continues to bang out gains that put it on track for its best quarter since the financial crisis.
At last check, gold for December delivery was down $1.40 to $1,217.40 an ounce.
By Tess Stynes 6:45amCDT
ICSC/Goldman Retail Sales Index Down
The International Council of Shopping Centers and Goldman Sachs Retail Chain Store Sales Index eased 0.2% in the
week ended Saturday from the previous week on a seasonally adjusted, comparable-store basis.
"Weather generally was not favorable for seasonal demand, but business was brisk for a number of retail segments," said
Michael Niemira, ICSC vice president of research and chief economist.
On a year-to-year basis, the weekly reading increased 3.6%.
Week Ended
27-Sep-14
20-Sep-14
13-Sep-14
06-Sep-14
Index Yr/Yr Change Weekly Change
560.4
3.6%
-0.2%
561.8
4.1%
0.1%
561.2
3.0%
-2.6%
576.0
4.0%
0.7%
Write to Tess Stynes at tess.stynes@wsj.com (END) Dow Jones Newswires
By Tommy Stubbington 6:57amCDT
EUR/USD Commentary
The dollar continued to surge Tuesday, buoyed by a slump in the euro as eurozone inflation sank to a five-year low.
The latest sign of sluggish price growth in the euro area is likely to crank up the pressure on the European Central Bank
to further ease monetary policy, at a time when investors perceive that the U.S. Federal Reserve is edging toward raising
interest rates. The widening gulf in monetary policy pushed the euro 0.9% lower against the buck to $1.2571, the lowest
since September 2012. Analysts said the decline in the euro triggered broader dollar strength, with the greenback rising
0.3% against the yen and 0.5% against the British pound. "The dollar is catching a firm bid-tone on the back of weaker
eurozone [data]," said currency analysts at RBC Capital Markets.
Consumer price inflation in the eurozone fell to 0.3% in September, data showed Tuesday. That marks the slowest rate
since October 2009 and a fall even further below the ECB's target rate of close to 2%.
The central bank, which has its October policy announcement on Thursday, has already stepped up efforts to head off
the threat of deflation, with a surprise interest rate cut last month and plans to purchase bundles of private debt. But
many analysts think the central bank will eventually have to opt for large-scale purchases of government bonds--known
as quantitative easing--to pull the currency bloc out of its malaise.
That prospect would further weaken the currency.
"Given how important inflation readings are to the ECB's thinking, this figure will be a source of concern. We could see
a more aggressive message at this week's meeting," said Phyllis Papadavid, a currency strategist at BNP Paribas.
European stocks extended their gains following the inflation data, reversing part of the previous day's decline.
The Stoxx Europe 600 was 0.7% higher midway through the session. Equity markets would likely benefit from a move
toward quantitative easing by the ECB, while a weaker euro could be a boon for the region's exporters.
Royal Bank of Scotland PLC was among the top risers after the lender said losses on bad loans will be significantly
lower than previously thought this year.
Meanwhile, shares in U.K. clothing retailer Next slid after it said it is unlikely to hit its full-year profit target if recent
unusually warm weather continues.
U.S. stock futures pointed to a 0.3% opening gain for the S&P 500. Changes in futures aren't necessarily reflected in
market moves after the opening bell. In commodities markets, gold was down 0.9% at $1,208.30 an ounce, while Brent
crude oil climbed 0.2% to $97.39 a barrel. Write to Tommy Stubbington at tommy.stubbington@wsj.com (END) Dow
Jones Newswires
1204 GMT 7:04amCDT
Bank of Korea To Cut?
The Bank of Korea's September minutes point to a 25 basis-point rate cut to 2% in October, says Nomura economist
Kwon Young-sun. The minutes released on Tuesday show Chung Hae-bang, a dovish member of the BOK policy board,
voted for a "slight rate cut" against the majority decision to stay on hold while another MPC member expressed doubt
that the 25 basis-point cut in August would be enough to fight downside risks. Kwon notes the stronger won against the
yen and the euro, the subdued inflation and the deadlocked parliament delaying ratifying stimulus bills also put pressure
on the central bank to further ease policy. The next BOK policy board meeting is due Oct. 15. (kwanwoo.jun@wsj.com)
Contact us in London. +44-20-7842-9464 markettalk@wsj.com (END) Dow Jones Newswires
By Nirmala Menon 7:30amCDT
Canadian Economy Stalls
OTTAWA--Canada's economy stalled unexpectedly in July after six straight monthly increases due to declines in energy
and mining, agriculture, utilities and wholesale trade, according to Statistics Canada data Tuesday. The weak kick-off to
third quarter gross domestic product underscores expectations that the Canadian central bank would hold the line on
interest rates even as debate about U.S. rate hikes heats up. GDP, the sum total of goods and services produced in the
country, slowed on a year-on-year basis to 2.5% in July from 3.1% in June. Market expectations had been for GDP to
expand 0.3% on a monthly basis and 2.8% year-on-year, according to a report from Royal Bank of Canada.
Output in mining, quarrying and oil and gas extraction shrank 1.5%, the most since May 2013, due to declines in
production of oil, coal, copper, nickel, lead and zinc. Utilities output contracted 2.3%--the largest monthly decline since
November 2006--as cooler-than- average summer temperatures in parts of the country reduced demand for electricity
and natural gas. The agriculture sector's output declined 2.4%, the most since May 2009, due to lower wheat and canola
production after a bumper crop in the previous growing season. Write to Nirmala Menon at nirmala.menon@wsj.com
(END) Dow Jones Newswires
By Nirmala Menon 7:30amCDT
Canadian PPI
OTTAWA--Canadian monthly producer prices rebounded 0.2% in August due to higher prices for motorized and
recreational vehicles, Statistics Canada said Tuesday. Prices for raw materials used by manufacturers declined 2.2% as
a result of lower prices for crude energy products. The market had expected producer prices to drop 0.2% after a 0.3%
fall in July, while raw materials prices had been expected to shrink 1.5% following a 1.4% decline previously, according
to a report from Royal Bank of Canada. July's figures were not revised. Write to Nirmala Menon at
nirmala.menon@wsj.com (END) Dow Jones Newswires
7:41amCDT Clockwise: AUD/USD, GBP/USD, USD/CHF, EUR/USD, USD/CAD, USD/JPY, EUR/CHF
09:07 EDT 8:07amCDT
Case-Shiller Disappoints
The S&P Case-Shiller national home price index is up just 5.6% in the year ended in July, continuing a slowing trend
since late 2013. The index covering 20 major US cities is up just 6.7%, less than the 7.3% gain expected by economists.
The easing in home prices reflects the weakening in demand seen in the housing market, but S&P says the rise in
August new home sales is a "welcome exception" to recent housing trends. (kathleen.madigan@wsj.com) (END) Dow
Jones Newswires
By Don Curren 8:09amCDT
CAD Commentary
TORONTO--The Canadian dollar is lower Tuesday morning after hitting a six-month low in response to sharply
disappointing growth data for July, followed by a modest rebound. The U.S. dollar was last at C$1.1184, from
C$1.1165 at Monday's close, according to data provider CQG. Its session high of C$1.1205 marks its highest point
since March 25. The weak kick-off to third quarter GDP growth will reinforce expectations the Bank of Canada will
hold the line on interest rates as the U.S. Federal Reserve moves toward tighter monetary policy, a significant negative
for the Canadian currency. Statistics Canada said flat GDP growth in July after six straight monthly increases was
driven by weakness in energy and mining, agriculture, utilities and wholesale trade. A report from CIBC World
Markets said the growth disappointment in part due to a steep drop in utilities output due to the lack of air conditioning
demand in central Canada, which had a cool summer. The volatile resource sector also took a hit in July, shaving more
than 0.1% off the growth rate on a drop in mining oil and gas, CIBC said. "Overall, a disappointment that will take
expectations for the quarter to below 3%, even with a bounce back next month," it said. CIBC characterized the market
impact of the news as "positive for the front end of the yield curve, negative for the [Canadian dollar]." Write to Don
Curren at don.curren@wsj.com (END) Dow Jones Newswires
9:29 EDT 8:29amCDT
Canadian Business Not Running With Baton
GMP Securities says while Canadian July GDP data is somewhat dated, it confirms the uneven nature of the Canadian
economy. It says the economy is increasingly relying on a return of business investments and expanding export growth
to take the growth baton from consumers and housing sector. "However, this handoff has yet to develop in a consistent
and robust enough manner to allow the [Bank of Canada] to even begin to contemplate a near-term rate hike even as
inflation has crept up of late," GMP says. It sees BOC remaining on hold for some time, and looks for an April 2015
hike in conjunction with BOC's revised monetary report issued at that time. (don.curren@wsj.com @dbcurren) (END)
Dow Jones Newswires
8:45amCDT
Chicago PMI Falls
A snapshot of economic activity in the manufacturing-heavy Midwest indicates businesses suffered a setback in
September. The Chicago Business Barometer, commonly known as the Chicago PMI, fell to 60.5 this month from
August's 64.3. Any reading above 50 indicates expansion. A major setback in the new orders index, which fell to 60.0
in September from last month's 65.6, overwhelmed slight advances in the other major subindexes. Write to Paul Rekoff
at paul.rekoff@wsj.com (END) Dow Jones Newswires
The Conference Board Consumer Confidence Index(R) Declines
Confidence Retreats Following Four Months of Improvement PR Newswire NEW YORK, Sept. 30, 2014
9:00amCDT
NEW YORK, Sept. 30, 2014 /PRNewswire/ -- The Conference Board Consumer Confidence Index(R), which had
increased in August, declined in September. The Index now stands at 86.0 (1985=100), down from 93.4 in August. The
Present Situation Index decreased to 89.4 from 93.9, while the Expectations Index dropped to 83.7 from 93.1 in August.
The monthly Consumer Confidence Survey(R) , based on a probability-design random sample, is conducted for The
Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and
watch. The cutoff date for the preliminary results was September 18.
Says Lynn Franco, Director of Economic Indicators at The Conference Board: "Consumer confidence retreated in
September after four consecutive months of improvement. A less positive assessment of the current job market, most
likely due to the recent softening in growth, was the sole reason for the decline in consumers' assessment of present-day
conditions. Looking ahead, consumers were less confident about the short-term outlook for the economy and labor
market, and somewhat mixed regarding their future earnings potential. All told, consumers expect economic growth to
ease in the months ahead."
Consumers assessed current conditions less favorably in September compared to a month ago. Their view of business
conditions was virtually unchanged: those saying conditions are "good" fell minutely, from 23.5 to 23.4 percent, while
those claiming business conditions are "bad" held constant at 21.3 percent. Consumers' appraisal of the job market
declined more appreciably, with the proportion stating jobs are "plentiful" falling from 17.6 percent to 15.1 percent.
Those claiming jobs are "hard to get" was barely changed, at 30.1 percent versus 30.0 percent in August.
Consumers' optimism about the short-term outlook declined considerably in September. The percentage of consumers
expecting business conditions to improve over the next six months fell from 20.8 percent to 18.6 percent, while those
expecting business conditions to worsen rose from 9.9 percent to 12.0 percent. Consumers' outlook for the labor market
likewise took a downturn. Those anticipating more jobs in the months ahead fell from 17.8 percent to 15.2 percent,
while those anticipating fewer jobs rose from 15.2 percent to 17.8 percent. The proportion of consumers expecting
growth in their incomes rose in September to 16.8 percent, compared to 15.5 percent in August. However, the
proportion expecting a drop in income also rose--to 13.4 percent versus 11.6 percent a month ago. Source:
September 2014 Consumer Confidence Survey(R)
10:10 EDT 9:10amCDT
Treasury Comment
The bond market just got another boost from weak consumer confidence data. The index falls to 86 from 93.4 in August.
Economists expected 92.8. The data raise some question on how robustly the US growth is going to be in the second
half and support the Fed's case to be patient in raising rates. The 10-year note is 1/32 higher, yielding 2.488%.
(min.zeng@wsj.com; @minzengwsj) (END) Dow Jones Newswires
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