Market Roundup
• U.S. job openings (JOLTS) rise to 5.871 million in July from 5.643million -previous
• Bank of Canada holds rates steady at 0.5% as growth disappoints (as expected).
• US Beige Book shows little sign of wage pressure, US economy expanded at modest pace in July & Aug.
• Fed's George: US labor market is roughly at full strength.
• BoE’s Carney: Says never to helicopter money, comfortable decision to cut in August, have stimulus tools not trigger happy.
• BoE’s Forbes: May be case for additional easing in future, despite recent positive data econ will probably still slow.
• Mexico’s FinMin Videgaray steps down, to be replaced by ex-Finance Minister Jose Antonio Meade (Calderon regime).
• Oil rises, but doubt over o/p deal curbs gains, world crude output seen high even with OPEC-Russia o/p freeze.
• Yen rises after Japanese media report on BOJ policy disagreement, NZD to highest vs dollar since May 2015.
• Sterling slips after UK factory output posts biggest drop in year.
Looking Ahead - Economic Data (GMT)
• 23:50 Japan bank Lending YY Aug 2.1%- previous
• 23:50 Japan Foreign bond Investment w/e 105.7b- previous
• 23:50 Japan Foreign Invest JP Stock w/e -6.8b- previous
• 23:50 Japan Current Account NSA JPY* Jul forecast 2090
• 23:50 Japan GDP Rev QQ Annualised* Q2 forecast 0%, 0.2%- previous
• 23:50 Japan GDP Revised QQ* Q2 forecast 0%, 0%- previous
• 23:50 Japan GDP Cap Ex Rev QQ* Q2 forecast -0.4%, -0.4%-previous
• 23:50 Japan GDP QQ Pvt Consumption Revised* Q2 0.2%-previous
• 23:50 Japan GDP QQ External Dem Revised* Q2 -0.3%-previous
• 01:30 Australia Trade balance G&S (A$)* Jul forecast -2750m, -3195m-previous
• 01:30 Australia Goods/Services Imports* Jul 2%- previous
• 01:30 Australia Goods/Services Exports* Jul -1%- previous
• 05:00 Japan Economy Watchers Poll* Aug 45.1- previous
• __:__ China Exports YY Aug forecast-4%, -4.4%- previous
• __:__ China Imports YY Aug forecast -4.9%, -12.5%- previous
• __:__ China Trade balance USD* Aug forecast 58.00b, 52.31b- previous
Looking Ahead - Events, Other Releases (GMT)
• 22:55 Australia RBA Deputy Gov Lowe speaks at an international conference organized by the ADB in collaboration w/IGF and the University of New South Wales (UNSW) in Sydney
• 04:30 Japan BoJ Deputy Gov Nakaso speaks at seminar hosted by American Chamber of Commerce in Japan
Currency Summaries
EUR/USD is likely to find support at 1.1203 levels and currently trading at 1.1241 levels. The pair has made session high at 1.1271 and hit lows at 1.1228 levels. Euro paused its upside against the dollar on Wednesday as investor avoided making big bets ahead of ECB meeting on Thursday. ECB meets on Thursday and is set announced its further policy easing measures. Most economists expecting a steady hand, even if a sizable minority reckon there could be an extension of asset buys. The bank has provided extraordinary stimulus for years, cutting rates deep into negative territory, buying 80 billion euros ($89.7 billion) worth of assets a month and offering banks free loans, all to revive growth after nearly a decade in the doldrums. The euro edged down 0.1 percent versus the dollar as traders took defensive positions ahead of European Central Bank policy meeting. The dollar index, which tracks the dollar against six global peers, touched its lowest since Aug. 26, but reversed losses in afternoon trading to rise with the euro and yen. It was last up 0.15 percent to 94.992.
GBP/USD is supported in the range of 1.3250 currently trading at 1.3339 levels. It reached session high at 1.3399 and hit low at 1.3317 levels. Sterling declined against the U.S. dollar on Wednesday after British industrial output data for July cam weaker than expected raising doubts about Britain’s economy after Britons' vote in June to leave the European Union. The fastest fall in manufacturing output for a year - 0.9 percent on the month - was followed by testimony from Bank of England (BoE) policymakers in parliament which stood by the decision to ease monetary policy aggressively last month. The pound, which sank after the BoE eased policy a month ago, fell 0.7 percent on the day to $1.3348 and 84.17 pence per euro . The data were the first official figures to cover output solely for the period after the June 23 Brexit vote. Britain was plunged into political chaos in the weeks after the vote and before the formation of a new government under Prime Minister Theresa May.
USD/CAD is supported at 1.2830 levels and is trading at 1.2887 levels. It has made session high at 1.2906 and lows at 1.2821 levels. The Canadian dollar declined sharply against U.S. dollar on Wednesday after dovish statement Bank of Canada of weakened the Canadian dollar. The Bank of Canada warned that the economy could be weaker than it anticipated just two months ago as exports disappointed, but the central bank held its policy rate steady at 0.50 percent as it stuck to a forecast that growth will bounce back in the second half. On the data front, Ivey Purchasing Managers Index data released on Wednesday showed pace of purchasing activity in Canada slowed in August as employment growth slumped and inventories grew. The seasonally adjusted index fell to 52.3 from 57.0 in July. Analysts had forecast the index would decline to 55.4. The Canadian dollar was last trading at C$1.2883 to the greenback, weaker than Tuesday's close of C$1.2847.
USD/JPY is supported around 101.03 levels and currently trading at 102.74 levels. It peaked to hit session high at 101.85 and made session lows at 101.33 levels. Japanese yen strengthened against US dollar on Wednesday, after uncertainty in the market boosted demand for the yen, which benefited from safety buying after a report from the Sankei newspaper showed that Bank of Japan policymakers are divided ahead of the central bank's next meeting. The Bank of Japan is split on whether to add stimulus at its Sept. 20-21 policy meeting, where central bank Governor Haruhiko Kuroda has said the board will conduct a comprehensive assessment of the effects of its stimulus program. The dollar was last down 0.2 percent at 101.75 yen, having fallen as low as 101.18, its weakest since Aug. 26. But the dollar index, which measures the greenback against a basket of major currencies, edged up 0.18 percent to 94.994 after a drop of more than 1 percent on Tuesday.
Equities Recap
European shares rose on Wednesday, taking a benchmark index close to eight-month highs, helped by some well-received company results and the prospect of more monetary stimulus from the European Central Bank.
UK's benchmark FTSE 100 closed up by 0.2 percent, the pan-European FTSEurofirst 300 ended the day up by 0.27 percent, Germany's Dax ended up by 0.6 percent, France’s CAC finished the day up by 0.6 percent.
U.S. stocks were little changed on Wednesday as investors assessed the outlook for U.S. interest rates, while Sprout Farmers Market's forecast weighed on grocers.
Dow Jones closed down by 0.07 percent, S&P 500 ended down by 0.02 percent, Nasdaq finished the day up by 0.15 percent.
Treasuries Recap
U.S. Treasury yields edged lower on Wednesday, with prices trading in narrow ranges, on investors' view that a Federal Reserve rate hike later this month was unlikely after a round of mostly weak economic data.
In late New York trading, benchmark 10-year Treasury notes were up 2/32 in price to yield 1.534 percent, from 1.543 percent on Tuesday. Yields fell as low as 1.519 percent, a three-week trough.
The 30-year Treasury bond rose 7/32 in price to yield 2.229 percent, from 2.240 percent late Tuesday. Earlier, 30-year yields slid to a four-week low of 2.206 percent.
Prices of two-year notes were flat with a yield of 0.738 percent
Commodities Recap
Gold dipped on Wednesday, losing momentum due to profit-taking after it soared by the most in over two months in the previous session on economic data that weakened the case for an imminent U.S. rate hike.
Spot gold was down 0.3 percent at $1,345.32 per ounce by 2:17 p.m. EDT (1817 GMT). The metal earlier touched a high of $1,352.65, its best since Aug. 19.
U.S. gold futures slipped 0.3 percent to end the session at $1349.2 per ounce.
U.S. crude prices soared nearly 3 percent on Wednesday in post settlement trading after U.S. inventory data showed what might be the largest weekly stock draw in over three decades.
U.S. crude jumped after the data release, rising by as much as 1.6 percent, or 71 cents, over the next 20 minutes. It settled earlier up 67 cents at $45.50 a barrel, a third consecutive session of gains.
Brent futures rose 72 cents to settle at $47.98 a barrel.
