- Japan Chief Cabinet Secretary Suga - Japan on recovery track, earnings at record high, jobs and wages on up-up, positive trends to continue.
- Japan July trade balance Y268.1 bln deficit, Y56.7 bln deficit eyed, exports +7.6% y/y, imports -3.2%, +5.5% and -7.9% eyed, exports to US +18.8%, China +4.2%, rest of Asia +6.1%.
- Japan July crude oil import volume +9.0% y/y, LNG -11.3%, thermal coal +12.4%.
- China Commerce Minister - China trade faces severe situation and uncertainties, export fall cannot be ruled out.
- PBOC fixes USD/CNY at 6.3963, 6.3966 yesterday, last close 6.3938.
- China July FDI +5.2% y/y, CNY50.6 bln, Jan-July +7.9%, CNY471.1 bln, July non-financial outbound direct investment -18.6%, $7.5 bln.
- Kocherlakota - Hiking rates poses risk to economy.
- Outgoing BoE MPC Miles sees interest rates rising pretty soon, not fully there Yet.
- Australia July job vacancies +1.8% m/m, +2.9% y/y.
- NZ Q2 PPI inputs -0.3% q/q, -3.3% y/y, and output -0.2%, -2.2%, PPI off in last five quarters, lower dairy prices cited.
- Dairy prices rise at latest NZ Fonterra auction, GDT price index +14.8%, volume down as generally eyed, -20.7%.
- (0400 ET/0800 GMT) Euro zone June current account balance; last E3.4 bln surplus nsa, E18.0 bln sa.
- (0400 ET/0800 GMT) Euro zone June net investment flows; last E41.0 bln inflow.
- (0430 ET/0830 GMT) Italy June current account balance; last E2.6 bln surplus.
- (0830 ET/1230 GMT) US July CPI, +0.2% m/m, +0.2% y/y eyed; last +0.3%, +0.1%.
- (0830 ET/1230 GMT) US July core, +0.2% m/m, +1.9% y/y eyed; last +0.2%, +1.8%.
- (0830 ET/1230 GMT) US July real weekly earnings, +0.3% m/m eyed; last -0.3%.
- (1130 ET/1530 GMT) US July Cleveland Fed CPI; last +0.3% m/m.
Key Events Ahead
- N/A Germany Bundestag vote on E86 bln Greek bail-out package.
- N/A Sweden SEK2 bln each 3.5%, 1.5% 2022, 2023 government bond auctions.
- N/A Portugal E1-1.25 bln each 3 and 12-month bill auctions.
- (0400 ET/0800 GMT) Iceland CB monetary policy announcement.
- (0530 ET/0930 GMT) Germany E5.0 bln zero% 2017 Schatz auction.
- (1400 ET/1800 GMT) FOMC July 28-29 meeting minutes.
FX Recap
EUR/USD is supported below 1.1100 levels and currently trading at 1.1048 levels. It has made intraday high at 1.1052 and low at 1.1025 levels. After facing rejection just shy of 1.11 barriers, EUR/USD retraced to familiar range and trades muted around 1.1050 levels. Yesterday US housing start and building permits data released with flat to negative numbers. Market eagerly awaits US inflation data as well as meeting minutes for the any clue on interest rate hike decision. Initial support is seen around at 1.0789 and resistance at 1.1195 levels.
USD/JPY is supported above 124.00 levels and posted a high of 124.42 levels. It has made intraday low at 124.22 and currently trading at 124.32 levels. The Japanese trade balance for the month of July came in at JPY -268.1 bln vs JPY -53.0 bln expected and a prior revision of JPY -70.5 bln, with the adjusted reading at JPY -368.8 bln vs JPY -158.6 bln exp. The BOJ meet this week also for their interest rate decision while is likely to remain on hold with the recent GDP numbers reading -0.4% Q/Q for Q2 beating expectations of -0.5%. Initial resistance is seen at 125.68 and support is seen at 120.63 levels.
GBP/USD is supported below $1.5700 levels. It made an intraday high at 1.5678 and low at 1.5656 levels. Pair is currently trading at 1.5664 levels. Sterling rose towards a 7-1/2-year high on a trade-weighted basis on Tuesday after UK inflation data beat expectations, bolstering bets that the Bank of England will raise interest rates in the coming months. Meanwhile, core inflation hit a five-month high. Today is data thin calendar for UK. Market will eye on US macro economic data for the further directions. Initial support is seen at 1.5413 and resistance is seen around 1.5734 levels.
NZDUSD is supported below 0.6600 levels and trading at 0.6582 levels and made intraday low at 0.6575 and high at 0.6594 levels. Producer prices in New Zealand continued to drop last quarter, with the input Producer Price Index (PPI) sliding 0.3% and the output PPI falling 0.2%, according to Statistics New Zealand. The main drag on both indices was dairy prices. Last night Fonterra's Global Dairy Trade auction prices rose on average 14.5%, with whole-milk powder prices surging more than 19%. Fonterra restricted supply at the auction to help lift prices. Initial support is seen at 0.6465 and resistance at 0.6789 levels.
AUD/USD is supported above 0.7300 levels and trading at 0.7332 levels. It has made intraday high at 0.7345 levels and low at 0.7314 levels. Pair accelerated losses this session after the Chinese equities extended sell-off with the benchmark Shanghai Composite (SSEC) tumbling another 4% after a 6% drop seen on Tuesday. Meanwhile, traders also remain cautious ahead of key US macro data releases CPI and FOMC minutes due later today for further USD moves. Initial support is seen at 0.7225 and resistance at 0.7647 levels.
Equity Recap
Japan's benchmark Nikkei 225 index fell 0.21% to 20,510.77 points within the first hour of trade, while Tokyo's broader Topix gauge crept up 0.15% to 1,669.75 points.
Hong Kong's benchmark Hang Seng index advanced 0.06% to 23,488.44 points at the opening bell, and mainland China's benchmark Shanghai Composite tumbled 2.58% to 3,651.38 points at the same time.
Korea's benchmark Kospi index fell 0.39% to 1,948.63 points this morning in Seoul.
The benchmark Australian S&P/ASX 200 index rallied 1.32% to 5,372.90 points in Sydney, reversing the previous day's losses, with resource and banking shares helping to push the markets back up.
New Zealand's benchmark S&P/NZX 50 index gained 0.53% to trade at 5,741.22 points this afternoon in Wellington.
Australia's S&P/ASX 200 index closes up 1.40 pct at 5,377.20 points.
Tokyo's Nikkei average closes down 1.61 pct at 20,222.63.
Treasury Recap
Thailand 20 bln baht, 4.85-year government bond average accepted yield 2.0565 pct.
China finance ministry auctions 7 -year bonds at 3.5039 pct yield, market expected 3.49 pct.
New Zealand government bond yields were as much as 7 basis points higher.
Australian government bond futures fell, with the three-year bond contract off 1 tick at 98.050. The 10-year contract was down 3 ticks to 97.2000.
Commodity Recap
Gold was stuck in a narrow range on Wednesday as investors waited for the minutes of the Federal Reserve's meeting last month for clues on whether the U.S. central bank might raise interest rates next month. Bullion has found some support above $1,100 an ounce after last week's strong recovery away from a 5-1/2-year low reached in late July, helped by the uncertainty that followed China's shock devaluation of its currency. Spot gold was flat at $1,117.55 an ounce at 0224 GMT, extending Tuesday's lethargic performance.
Oil futures were in the red zone on Wednesday ahead of the US inventory report that will say more about demand in the world's no. 1 economy. Futures for WTI fell 0.65% to $42.84 per barrel, while Brent futures were traded with a 0.51% loss at $48.56 per barrel.
