Market Roundup
- U.S., S.Korea begin computer-simulated drills amid N. Korea tensions
- Japan Aug Reuters Tankan mfg index +27, non-mfg +29, July +26, +33.
- Japan Mfg index highest since Aug ’07, eyed at +26 in Nov, non-mfg +25.
- Financial squeeze on UK households eases from 3-year peak - Markit
- Australian citizenship crisis erodes support for government
- Emissions scandal is a risk to German economy- ministry
- New Zealand opposition leader launches campaign for 'brave' tackling of inequality
- Speculators cut bearish dollar bets in latest week –CFTC
Economic Data Ahead
- No major economic events scheduled for the day
Key Events Ahead
- (0540 ET/0940 GMT) Netherlands E1.0-2.0 bln for 3 month auction
- (0855 ET/1255 GMT) France E2.6-3.0 bln/E0.9-1.3 bln/E0.8-1.2 bln for 3/6/12 month auction
FX Beat
DXY: The dollar was range bound versus its major peers amid political tensions in the White House. The greenback against a basket of currencies traded 0.1 percent up at 93.55, having touched a high of 94.15 on Wednesday, it’s highest since July 26. FxWirePro's Hourly Dollar Strength Index stood at 14.46 (Neutral) by 0500 GMT.
EUR/USD: The euro consolidated within a narrow range, as investors looked ahead to the U.S. Federal Reserve's annual central banking symposium in Jackson Hole, Wyoming on Thursday and Friday. The European currency traded flat at 1.1757, having touched a low of 1.1662 the session before, its lowest since Jul. 27. FxWirePro's Hourly Euro Strength Index stood at -3.20 (Neutral) by 0400 GMT. Investors’ attention will remain on series of economic data from the Eurozone ahead of the Chicago Fed National Activity Index. Immediate resistance is located at 1.1789 (Aug 17 High), a break above targets 1.1850. On the downside, support is seen at 1.1720 (61.8% retracement 1.1370 and 1.1909), a break below could drag it near 1.1638 (50.0% retracement 1.1370 and 1.1909).
USD/JPY: The dollar steadied after falling to a four-month low in the previous session on concerns that White House personnel changes will impair President Donald Trump's ability to pass tax reform and stimulus measures. The major was trading flat at 109.23, having hit a low of 108.60 the prior day, its lowest since Apr. 19 2016. FxWirePro's Hourly Yen Strength Index stood at 84.51 (Bullish) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of the Chicago Fed National Activity Index for further momentum. Immediate resistance is located at 109.99 (61.8% retracement of 112.19 and 108.60), a break above targets 110.41 (50.0% retracement of 112.19 and 108.80). On the downside, support is seen at 109.00, a break below could take it near 108.60 (Previous Session Low).
GBP/USD: Sterling rose after falling to a 5-week low in the previous session, in the wake of BoE Carney’s less hawkish take on the interest rates outlook, after the inflation figures came in below estimates for two months in a row. Sterling traded flat at 1.2876, having hit a low of 1.2831 on Friday, its lowest since July 12. FxWirePro's Hourly Sterling Strength Index stood at -100.17 (High Bearish) by 0400 GMT. Investors’ focus will remain on the second estimate of the UK’s Q2 GDP and U.S. durable goods data due later this week. Immediate resistance is located at 1.2891 (5-DMA), a break above could take it near 1.2931 (10-DMA). On the downside, support is seen at 1.2831 (Previous Session Low), a break below targets 1.2811 (July 12 Low). Against the euro, the pound was trading flat at 91.27 pence, having hit a 10-month low of 91.49 the day before.
AUD/USD: The Australian dollar held firm amid a lack of impetus in Asia during a phase of consolidation. The Aussie trades flat at 0.7924, having hit a low of 0.7807 on Tuesday, it’s weakest since July 18. FxWirePro's Hourly Aussie Strength Index stood at 15.46 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7869 (Previous Session Low), a break below targets 0.7807. On the upside, resistance is located at 0.7950, a break above could take it near 0.7927 (Aug 17 High).
NZD/USD: The New Zealand dollar traded between a narrow range, with traders sidelined by U.S. political turmoil and ahead of the Federal Reserve's annual Jackson Hole event. The Kiwi trades flat at 0.7314, having touched a low of 0.7223 on Wednesday, its lowest level since July 12. FxWirePro's Hourly Kiwi Strength Index was at -18.78 (Neutral) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7351 (61.8% retracement of 0.7558 and 0.7223), a break above could take it near 0.7387 (21-DMA). On the downside, support is seen at 0.7275 (Previous Session Low), a break below could drag it till 0.7200.
Equities Recap
Asian shares consolidated as investors worried about U.S. President Donald Trump's ability to fulfill his economic agenda, even as the departure of his policy strategist raised expectations of some progress.
MSCI's broadest index of Asia-Pacific shares outside Japan traded flat.
Tokyo's Nikkei rallied 0.4 percent to 19,404.25 points, Australia's S&P/ASX 200 index fell 0.6 percent to 5,715.30 points and South Korea's KOSPI climbed 0.2 percent to 2,354.00 points.
Shanghai composite index gained 0.33 percent to 3,279.46 points, while CSI300 index was trading 0.3 percent up at 3,734.39 points.
Hong Kong’s Hang Seng was trading 0.5 percent higher at 27,178.07 points. Taiwan shares added 0.05 percent to 10,326.39 points.
Commodities Recap
Crude oil prices decline after rising to an over 1-week high in the previous session, as rising U.S. output weighed on hopes the market will tighten after a 13 percent fall in U.S. crude inventories since March. International benchmark Brent crude was trading 0.4 percent up at $52.65 per barrel by 0415 GMT, having hit a high of $52.93 on Friday, its strongest since Aug. 8. U.S. West Texas Intermediate was trading flat at $48.49 a barrel, after rising as high as $48.71 the prior session, its highest since Aug. 14.
Gold prices eased after jumping to their highest in more than nine months on Friday as the dollar retreated on political uncertainty in the United States and a suspected Islamist militant attack in Spain strengthened the metal's safe-haven appeal. Spot gold was up 0.03 percent at $1,285.85 an ounce by 0423 GMT, having touched a high at $1,300.80 per ounce, its highest since Nov.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.192 percent higher by 0.005 bps, while 5-year yield was 0.007 bps up at 1.7688 percent.
The Australian government bond futures slipped, with the three-year bond contract down 1 tick at 98.040. The 10-year contract fell 1.50 ticks to 97.3700.
The New Zealand government bonds eased, sending yields 3 basis points higher.
