Market Roundup
- Australia Q2 Real GDP qq SA, 0.9%, 0.7% f'cast, 1.0% prev
- Australia Q2 Real GDP yy SA, 3.4%, 2.8% f'cast, 3.1% prev
- Japan Aug Services PMI, 51.5, 51.3 prev
- China Aug Caixin Services PMI, 51.5, 52.8 prev
- Canada PM indicates he will not bend on key NAFTA demands at talks
- Mueller will accept Trump's written answers to some Russia probe questions -New York Times
- New book by Woodward says Trump wanted Syrian leader killed
- Crisis-hit Argentina hopes for improved IMF deal this month
- Saudi Arabia aims to keep crude in $70 to $80 band - sources
Economic Data Ahead
- (0315 ET/0715 GMT) Spain Aug Services PMI, 52.1 f'cast, 52.6 prev
- (0345 ET/0745 GMT) Italy Aug Markit/ADACI Svcs PMI, 53.1 f'cast, 54.0 prev
- (0350 ET/0750 GMT) France Aug Markit Serv PMI, 55.7 f'cast, 55.7 prev
- (0350 ET/0750 GMT) France Aug Markit Comp PMI, 55.1 f'cast, 55.1 prev
- (0355 ET/0755 GMT) Germany Aug Markit Services PMI, 55.2 f'cast, 55.2 prev
- (0355 ET/0755 GMT) Germany Aug Markit Comp Final PMI, 55.7 f'cast, 55.7 prev
- (0400 ET/0800 GMT) EZ Aug Markit Serv Final PMI, 54.4 f'cast, 54.4 prev
- (0400 ET/0800 GMT) EZ Aug Markit Comp Final PMI, 54.4 f'cast, 54.4 prev
- (0430 ET/0830 GMT) Great Britain Aug Markit/CIPS Serv PMI, 53.9 f'cast, 53.5 prev
- (0430 ET/0830 GMT) Great Britain Aug Reserve Assets Total USD, 160,735.62 mln prev
- (0500 ET/0900 GMT) EZ Jul Retail Sales MM, -0.2% f'cast, 0.3% prev
- (0500 ET/0900 GMT) EZ Jul Retail Sales YY, 1.3% f'cast, 1.2% prev
Key Events Ahead
- (0300 ET/0700 GMT) Riksbank holds Executive Board meeting, monetary policy meeting no. 4 in Stockholm
- (0430 ET/0830 GMT) Speech by member of the ECB's Executive Board Peter Praet at the Eurofi Financial Forum in Vienna
- (0920 ET/1320 GMT) Fed's James Bullard makes a presentation on the U.S. economy and monetary policy at Real Return XII at Euromoney Conferences in New York
- (1000 ET/1400 GMT) Bank of Canada key policy interest rate announcement in Ottawa
- (1230 ET/1630 GMT) Fed's John Williams visits Buffalo and Niagara Falls, N.Y., to meet with leaders in business, community development, education and government
- (1600 ET/2000 GMT) Fed's Neel Kashkari participates in a townhall forum hosted by Montana State University in Bozeman, Montana
- (1830 ET/2230 GMT) Fed's Raphael Bostic speaks on the economic outlook and monetary policy before a fireside chat of the Chicago Council on Global Affairs in Chicago
FX Beat
DXY: The dollar index held firm near 2-week peak after a survey released overnight showing U.S. manufacturing activity at a 14-year high in August reinforcing expectations for rising U.S. interest rates. The greenback against a basket of currencies trades 0.1 percent up at 95.49, having touched a high of 95.74 the day before, its highest since August 24. FxWirePro's Hourly Dollar Strength Index stood at 105.61 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro rebounded after falling to an over 1-week low in the previous session after four top Eurozone central bankers renewed their call for a common insurance on bank deposits in the bloc. The European currency traded 0.1 percent up at 1.1592, having touched a low of 1.1530, its lowest since Aug 23. FxWirePro's Hourly Euro Strength Index stood at 50.28 (Bullish) by 0500 GMT. Investors’ attention will remain on Eurozone Markit service and composite PMI, ahead of series of speeches from FOMC members. Immediate resistance is located at 1.1630 (10-DMA), a break above targets 1.1689 (August 31 High). On the downside, support is seen at 1.1543 (21-DMA), a break below could drag it till 1.1500.
USD/JPY: The dollar surged to a 1-week peak against the Japanese yen ahead of a looming deadline in the trade conflict between the United States and China. However, the major trimmed gains as ongoing trade disputes between the U.S. and China and slow progress with NAFTA weighed on investor sentiment. The major was trading 0.1 percent up at 111.51, having hit a high of 111.71 earlier, its highest since August 30. FxWirePro's Hourly Yen Strength Index stood at 2.83 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of series of speeches from FOMC members. Immediate resistance is located at 111.82 (August 29 High), a break above targets 112.15 (August 1 High). On the downside, support is seen at 111.15 (10-DMA), a break below could take it lower 110.43 (August 15 Low).
GBP/USD: Sterling recouped some of its previous session losses on a report the European Union could offer new guarantees to Britain to gain London's support for a solution aimed at averting an Irish border after Brexit. However, doubts over Prime Minister Theresa May's leadership and concerns over Brexit kept a lid on the British currency's upside. The major traded 0.05 percent up at 1.2857, having hit a low of 1.2810 on Tuesday; it’s lowest since August 24. FxWirePro's Hourly Sterling Strength Index stood at -43.06 (Neutral) 0500 GMT. Immediate resistance is located at 1.2903 (5-DMA), a break above could take it near 1.2941(10-DMA). On the downside, support is seen at 1.2828 (August 27 Low), a break below targets 1.2799 (August 24 Low). Against the euro, the pound was trading 0.05 percent down at 90.14 pence, having hit a high of 89.38 on Friday, it’s highest since August 17.
AUD/USD: The Australian dollar slightly edged up, retreating from a 20-month low hit in the previous session, after data showed the domestic economy grew far faster than expected last quarter, while annual growth raced to its highest in almost six years. The Aussie trades 0.2 percent up at 0.7186, having hit a low of 0.7157 on Tuesday; it’s lowest since December 2016. FxWirePro's Hourly Aussie Strength Index stood at -116.80 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7150, a break below targets 0.7100. On the upside, resistance is located at 0.7241 (38.2% retracement of 0.7362 and 0.7166), a break above could take it near 0.7264 (50.0% retracement).
NZD/USD: The New Zealand dollar slumped to 30-month lows after a global auction of dairy showed that the GDT price index declined 0.7 percent following the 3.6percent fall witnessed in the previous auction. The Kiwi trades 0.1 percent down at 0.6549, having touched a low of 0.6530 earlier, its lowest level since Feb. 2016. FxWirePro's Hourly Kiwi Strength Index was at 9.09 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6585 (23.6% retracement of 0.6719 and 0.6530), a break above could take it near 0.6605 (38.2% retracement). On the downside, support is seen at 0.6500, a break below could drag it below 0.6473.
Equities Recap
Asian shares slumped as heightened worries over international trade conflicts dented investor appetite for riskier assets.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.5 percent.
Tokyo's Nikkei declined 0.5 percent to 22,580.83 points, Australia's S&P/ASX 200 index plunged 1.0 percent to 6,230.40 points, and South Korea's KOSPI eased 0.9 percent to 2,292.75 points.
Shanghai composite index fell 1.3 percent to 2,714.47 points, while CSI300 index traded 1.6 percent down at 3,310.65 points.
Hong Kong’s Hang Seng traded 2.3 percent lower at 27,332.48 points. Taiwan shares shed 0.2 percent to 10,995.13 points.
Commodities Recap
Crude oil prices declined, after rising to multi-week peaks in the previous session, as the impact of a tropical storm on U.S. Gulf coast production was not as strong as initially expected. International benchmark Brent crude was trading 0.05 percent down at $77.75 per barrel by 0513 GMT, having hit a high of $78.42 on Monday, its highest since July 11. U.S. West Texas Intermediate was trading 0.1 percent higher at $70.11 a barrel, after rising as high as $70.47 on Thursday, its highest since August 8.
Gold prices surged after easing to a more than 1-week low in the previous session, as the dollar trimmed gains amid concerns of an escalation in the trade conflict between the United States and China. Spot gold rose 0.2 percent to $1,193.16 at 0508 GMT, having touched a low of $1,189.55 on Tuesday, its lowest since August 24. U.S. gold futures were up 0.1 percent at $1,199.70 an ounce.
Treasuries Recap
The Japanese government bonds traded flat amid a muted session that witnessed data of little economic significance. Investors will now keep an eye over the country’s household spending data for the month of July, scheduled to be released on September 6 by 23:30GMT for further insight into the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, traded flat at 0.116 percent, the yield on the long-term 30-year note also remained steady at 0.857 percent and the yield on short-term 2-year too hovered around -0.113 percent.
The Australian bonds plunged during the Asian session, tracking a similar movement in the United States Treasuries, after yields of the latter surged to a 3-week high in the overnight session, after the U.S. manufacturing activity expanded to over 14-year high during the month of August, and on heavy corporate debt supply. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 4-1/2 basis points to 2.571 percent, the yield on the long-term 30-year bond surged 4 basis points to 3.077 percent and the yield on short-term 2-year traded 3 basis points higher at 2.019 percent.
