Markets seemed to have an exaggerated response to the US CPI, where the headline rate rose by 0.1% in September than forecast. Next week's US data, including retail sales are expected to decline or weaken.

There has been no follow-through dollar buying against the G10 currencies today with the notable exception of the New Zealand dollar, perhaps ahead this weekend's election.

A lower dollar is helping lift gold today after poor price action yesterday. The gold is up almost 3% this week, its best showing in seven months.

November WTI is up 3.7% after pulling back the last three session.

Asia Pacific
China reported September prices, trade, and lending figures today. Consumer prices were disappointing. Rather than rise to 0.2% as expected, they eased back to 0 (from 0.1% year-over-year in August). Food prices were the key drag, ahead national holidays. They fell by 3.2%.

The dollar poke above JPY149.80 to reach its best level since it was briefly traded above JPY150 on October 3. Still, the greenback is in a range of a about a quarter of a yen below JPY149.85.

The Australian dollar walked up and fell down. It took the Aussie six sessions to climb from about $0.6285 to $0.6445 and then proceeded to fall to near $0.6305 yesterday. It has held the low so far today. The nearly 1.6% decline yesterday was the largest since March.

Europe
Today's surprise was that the aggregate industrial production showed a 0.6% month-over-month gains after the 1.1% decline in July was revised to -1.3%. The eurozone economy expanded by 0.1% in Q1 and Q2. It is expected to eke out a similar gain in Q3.

The euro retraced of the seven-day rally that had taken it from about to $1.0640.

Sterling had rallied since the low on October 3 near $1.2035 but yesterday's sell-off surpassed the 50% retracement near $1.2185.

America
Headline US September CPI was unchanged at 3.7%. The market had expected a small decline after rising for the previous two months. On the month, it rose by 0.4%.

The US dollar surged in the first few days of October and reached the mark of about CAD1.3785 on October 5. It fell to about CAD1.3570 on October 10. It consolidated on Wednesday and shot up to CAD1.3700 yesterday as the dollar was bid following the CPI.