Market Roundup
- U.S.-Canada trade talks grind on, but 'final' issues unresolved
- Fed likely to need to hike rates 'a bit beyond neutral' -Evans
- Trump says government shutdown not likely before November election
- Aides disavow NYTimes opinion piece that Trump suggests is act of subversion
- N.Korea's Kim sets denuclearisation time line, prompting thanks from Trump
- Major Chinese paper warns Britain on trade talks after warship sail-by
- U.S. job growth seen picking up, unemployment rate falling
- Japan Jul Household spending yy, +0.1% vs f'cast -0.9%
- Japan Jul Inflation-adjusted real wages, +0.4% vs +2.5% Jun
- U.S.-based money market funds attract $11.84 bln in latest week -Lipper
- U.S. muni bond funds post $181.4 mln in outflows-Lipper
- Foreign CB US debt holdings -$208 mln to $3.429 tln Sep 5 week
- Treasuries +$405 mln to $3.060 tln, agencies -$171 mln to $298.558 bln
Economic Data Ahead
- (0300 ET/0700 GMT) Spain Jul Ind Output Cal Adj YY, 1.6% f'cast, 0.5% prev
- (0330 ET/0730 GMT) Great Britain Aug Halifax House Prices MM, -0.3% f'cast, 1.4% prev
- (0500 ET/0900 GMT) EZ Q2 GDP Revised QQ, 0.4% f'cast, 0.4% prev
- (0500 ET/0900 GMT) EZ Q2 GDP Revised YY, 2.2% f'cast, 2.2% prev
Key Events Ahead
- N/A Participation by ECB executive board member Benoit Coeure in Eurogroup meeting in Vienna
- N/A European Union finance ministers gather in Vienna for a regular informal meeting in which they are expected to discuss taxation of the digital economy, possible regulation of cryptocurrencies (to September 8) in Vienna
- N/A Chilean Minister of Finance Felipe Larraín and Governor of Chile's Central Bank Mario Marcel speak at Chile Day investment event in London alongside business leaders and UK politicians in London
- N/A Participation by Chair of the Supervisory Board Daniele Nouy, Vice-President of the European Central Bank Luis de Guindos and Member of the ECB's Executive Board Benoit Coeure in Informal ECOFIN meeting in Vienna
- (0300 ET/0700 GMT) Eurogroup meeting in Vienna
- (0600 ET/1000 GMT) Euro zone finance ministers hold news conference after meeting in Vienna
- (0830 ET/1230 GMT) Fed's Eric Rosengren speaks at Boston Federal Reserve's 62nd annual economic conference, which is entitled "What Are the Consequences of Long Spells of Low Interest Rates?"
- (0900 ET/1300 GMT) Fed's Loretta J. Mester moderates "Reality Check from the Markets: A Panel Discussion" at the Federal Reserve Bank of Boston's 62nd Economic Conference
- (1320 ET/1720 GMT) Fed's Robert Kaplan participates in moderated question-and-answer session before event, "Energy and the Economy: Charting the Course Ahead," in Dallas
- (1730 ET/2130 GMT) Reserve Bank of New Zealand governor Adrian Orr gives a speech to a financial services group entitled: 'Geopolitics, New Zealand and the Winds of Change' in Wellington
FX Beat
DXY: The dollar slumped to a 1-week low on news that Washington will take up trade issues with Japan, as U.S. President Donald Trump has previously expressed displeasure towards the large U.S. trade deficit with Japan. The greenback against a basket of currencies trades 0.1 percent down at 94.93, having touched a low of 94.91 earlier, its lowest since August 31. FxWirePro's Hourly Dollar Strength Index stood at -102.74 (Highly Bearish) by 0500 GMT.
EUR/USD: The euro consolidated within narrow ranges as global trade concerns continued to take a toll on broader risk sentiment, further supporting safe-haven assets. The European currency traded flat at 1.1635, having touched a low of 1.1530 on Tuesday, its lowest since Aug 23. FxWirePro's Hourly Euro Strength Index stood at -0.42 (Neutral) by 0500 GMT. Investors’ attention will remain on series of data from the Eurozone economies, and EZ gross domestic product, ahead of the U.S. nonfarm payroll report and unemployment data. Immediate resistance is located at 1.1689 (August 31 High), a break above targets 1.1733 (August 28 High). On the downside, support is seen at 1.1594 (August 27 Low), a break below could drag it till 1.1545 (21-DMA).
USD/JPY: The dollar slumped to an over 2-week low after a report suggested that Japan would be the next country with which U.S. President Donald Trump will take up trade issues. Trump's government has already challenged China, Mexico, Canada, and the European Union on trade issues. The major was trading 0.2 percent down at 110.58, having hit a low of 110.38 earlier, its lowest since August 22. FxWirePro's Hourly Yen Strength Index stood at 60.87 (Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. nonfarm payroll report and unemployment data. Immediate resistance is located at 110.95 (21-DMA), a break above targets 111.15 (5-DMA). On the downside, support is seen at 110.31 (August 17 Low), a break below could take it lower 110.02 (August 20 Low).
GBP/USD: Sterling held within a narrow range as investors refrained from taking big positions, amid uncertainty over the progress of the Brexit negotiations and broader concerns over global trade wars. The major traded flat at 1.2922, having hit a low of 1.2785 on Wednesday; it’s lowest since August 20. FxWirePro's Hourly Sterling Strength Index stood at 31.37 (Neutral) 0500 GMT. Investors attention will remain on UK Halifax house prices, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.2982 (September 5 High), a break above could take it near 1.3043 (August 30 High). On the downside, support is seen at 1.2855 (September 3 Low), a break below targets 1.2799 (August 24 Low). Against the euro, the pound was trading 0.1 percent down at 89.93 pence, having hit a low of 90.52 on Wednesday, it’s lowest since August 29.
AUD/USD: The Australian dollar plunged to a fresh 30-month low as weak July housing loans stoked fears of a further slowdown in the once-booming property market. Moreover, reports that U.S. President Donald Trump could be considering taking on Japan over trade dented investor sentiment. The Aussie trades 0.5 percent down at 0.7155, having hit a low of 0.7137 earlier; it’s lowest since Feb 2016. FxWirePro's Hourly Aussie Strength Index stood at -89.78 (Slightly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7110, a break below targets 0.7070. On the upside, resistance is located at 0.7223 (38.2% retracement of 0.7362 and 0.7166), a break above could take it near 0.7249 (50.0% retracement).
NZD/USD: The New Zealand dollar declined, extending previous session losses, as China warned of retaliation if Washington imposed tariffs on an additional $200 billion worth of Chinese imports. The Kiwi trades 0.2 percent down at 0.6571, having touched a low of 0.6530 on Wednesday, its lowest level since Feb. 2016. FxWirePro's Hourly Kiwi Strength Index was at -33.46 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6628 (50.0% retracement of 0.6719 and 0.6530), a break above could take it near 0.6651 (61.8% retracement). On the downside, support is seen at 0.6540 (September 4 Low), a break below could drag it below 0.6473.
Equities Recap
Asian shares slumped to a 14-month trough as the public comment period for proposed tariffs on an additional $200 billion worth of Chinese imports ended and the tariffs could go into effect shortly afterward.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.4 percent.
Tokyo's Nikkei declined 0.8 percent to 22,307.06 points, Australia's S&P/ASX 200 index plunged 0.3 percent to 6,143.80 points, and South Korea's KOSPI eased 0.3 percent to 2,280.69 points.
Shanghai composite index rose 0.2 percent to 2,697.29 points, while CSI300 index traded 0.3 percent up at 3,273.57 points.
Hong Kong’s Hang Seng traded 0.4 percent lower at 26,949.91 points. Taiwan shares shed 0.7 percent to 10,846.99 points.
Commodities Recap
Crude oil prices declined, amid U.S.-China trade tensions and economic weakness from emerging markets, however, a fall in U.S. crude inventories to the lowest levels since 2015 limited downside. International benchmark Brent crude was trading 0.1 percent down at $76.47 per barrel by 0507 GMT, having hit a high of $79.69 on Tuesday, its highest since July 11. U.S. West Texas Intermediate was trading 0.1 percent lower at $67.81 a barrel, after rising as high as $71.37 on Tuesday, its highest since July 13.
Gold prices rose, extending gains for the third straight session as the dollar eased against the yen after a report suggested that U.S. President Donald Trump would next take up trade issues with Japan. Spot gold was 0.1 percent up at $1,200.70 as of 0615 GMT, having touched a high of $1,126.88 on Thursday, its highest since August 31. U.S. gold futures rose 0.3 percent to $1,208.0 an ounce.
Treasuries Recap
The Australian government bond futures gained, with the three-year bond contract and the 10-year contract up 2 ticks each at 98.005 and 97.4550 respectively.
The New Zealand government bonds gained, sending yields about 1 basis points lower at the long end of the curve.
The Canadian government bond prices were mixed across a flatter yield curve, with the two-year down 2.5 Canadian cents to yield 2.064 percent and the 10-year rising 12 Canadian cents to yield 2.227 percent.
