The greenback weakened mildly overnight as a Fed dove warned of the strengthen of the currency. New York Fed president William Dudley said that a strong dollar would mean "poorer trade performance, less exports, more imports". And, appreciation of the dollar would "tend to dampen inflation" and make it harder to achieve Fed's mandate. Separately, Minneapolis Fed president Narayana Kocherlakota urged Fed to "sharpen" the statement of its objective. In particular, he noted Fed should be clear on inflation, which is undesirable to be too high and too low. Meanwhile, it's reported that two Fed hawks, Philadelphia Fed president Charles Plosser and Dallas Fed president Richard Fisher will retire next year after completing the terms on FOMC. Overall, dollar is staying in tight range against European majors and yen and maintain near term bullish outlook.
In Eurozone, ECB president Mario Draghi said the central bank is moving to a more "active and controlled management of our balance sheet." He noted that while outright purchases of ABS and covered bonds would increase the size of the balance sheet but "additional risk exposure will be limited". Regarding the economy, he added "the risks surrounding the expected expansion are clearly on the downside." Also he said that the ECB stands ready to use additional unconventional instruments, or alter the size and composition of the current policies when necessary.
Released from China, the flash HSBC PMI manufacturing rose to 50.5 in September, beating expectation of a fall to 50.0. HSBC noted that the activities showed "signs of stabilization" in September and the data point to "modest expansion" in China's manufacturing sector. Nonetheless, the downturn in property markets remains the biggest downside risk to growth.
Looking ahead, Eurozone PMIs will be the main focus in European session. UK BBA mortgage approvals and public sector new borrowing will be featured. Canada will release retail sales and US will release house price index.