- Australia Q2 Real GDP +0.2% Qtr/Qtr, S/Adj (Reuters Poll +0.4%).
- Australia Q2 Real GDP +2.0% Yr/Yr, S/Adj (Reuters Poll +2.2%).
- Australia Q2 Final Consumption Expenditure +0.9%, S/Adj.
- Australia Q2 Gross Fixed Capital Expenditure +0.4%, S/Adj.
- Australia Q2 Chain Price Index -0.5%.
- Australia Q1 GDP +0.9% Qtr/Qtr (Previous Reading +0.9%).
- U.S. Stock Futures Extend Gains, Rise 1% on Day.
- ADB's Nakao- Chinese Stock Prices falling but Levels still higher than last summer.
- ADB's Nakao- Its True China's Economy is slowing.
- ADB's Nakao- Yuan Overvalued Recently, So Depreciation Reflects Market Value.
- ADB's Nakao- Asian Economy as a Whole is Very Resilient.
- ADB's Nakao- Recent Market Volatility May Reflect Investors' Worries about Whether Chinese Authorities' Can Respond Meticulously to Sharp Stock, ccy Swings.
- ADB's Nakao- China's Presence in ADB is very important to Guide its Economy toward More Reforms, Strengthen ADB's Functions as a Lending Body.
- ADB's Nakao- China's Presence in ADB is also important as one of the Tools for Japan, China to Maintain Cooperative Relationship.
- ADB's Nakao- Japan Shouldn't Stray Away from its Stance of Offering Aid to Asian Nations from LT Perspective, Despite Presence of China's New AIIB.
- PBOC Sets Yuan Mid-Point at 6.3619 / Dlr Vs Last Close 6.3645.
- Moody's Expects Housing Loans in NZ to Remain Healthy Next 12-18 Months.
- South Korea July Current Account at S/Adj $+9.49bln Vs Revised $+10.73bln in June.
- Brazil Central Bank to Auction Wednesday as Many as 9.45k Currency Swaps for the Rollover of October Maturities.
- (0400 ET/0800 GMT) Norway Current Account.
- (0430 ET/0830 GMT) UK Markit/CIPS Construction PMI, consensus 57.6, previous 57.1.
- (0500 ET/0900 GMT) Euro zone Producer Prices, consensus -0.1%, previous -0.1%.
Key Events Ahead
- (0500 ET/0900 GMT) Germany to sell EUR4bln 0.25% 2020 bonds.
FX Recap
EUR/USD is supported below 1.1300 levels and currently trading at 1.1277 levels. It has made intraday high at 1.1318 and low at 1.1259 levels. The greenback experienced a hard time in the afternoon, as investors digested sluggish manufacturing data in the US amid increased uncertainty over the Chinese outlook. The situation in the US revealed a more surprising slowdown of manufacturing activity, with major gauges falling to multi-month lows. The ISM manufacturing index hit the fifteen-month bottom at 51.1 points in August, while Markit Economics' factory PMI declined to 53.0 points, following a reading of 53.8 booked a month before. The picture in Europe offered rather mixed view. On the upside, Germany's manufacturing PMI reached 53.3, after 51.8 a month before, but remaining big players let down market participants, namely Italy's manufacturing sector, along with the manufacturing PMI in France at the four-month bottom. Today market will eye on US ADP job data for the further directions. Initial support is seen around at 1.1015 and resistance at 1.1363 levels.
USD/JPY is supported around 120.00 levels and posted a high of 120.45 levels. It has made intraday low at 119.21 and currently trading at 120.08 levels. The US dollar made early advances against the Japanese yen on Wednesday, with traders beginning to take on more risk after yesterday's disappointing Chinese factory data sparked a risk-off rally on the yen. Concerns about China are a key driver in currency markets and the PMIs were weaker and not good for overall risk sentiment. Initial resistance is seen at 123.20 and support is seen at 118.42 levels.
GBP/USD is supported around $1.5300 levels. It made an intraday high at 1.5318 and low at 1.5289 levels. Pair is currently trading at 1.5310 levels. The UK will report on its construction sector with the figure expected to stay well in expansion at 57.5, better than the previous 57.1 result. Looking towards the New York session, it's all about the US economic news with ADP employment change the main highlight tonight. As usual, the ADP will provide an early look at hiring trends that will shape expectations going into the official release (204k expected vs. 185k previous). Initial support is seen at 1.5220 and resistance is seen around 1.5436 levels.
NZDUSD is supported above 0.6300 levels and trading at 0.6351 levels and made intraday low at 0.6311 and high at 0.6366 levels. The New Zealand dollar was one of the strongest performing currencies on Wednesday morning in Asia, with a rebound in Chinese equities and a strong rise at Fonterra's dairy auction providing some support for the currency. The Global Dairy Trade (GDT) Price index posted a sharp 10.9% gain early on Wednesday in New Zealand when compared with the previous price at Fonterra's auction early on August 18. Looking ahead, markets now await the upcoming US macro data including the crucial ADP employment change, the forerunner for Friday's non-farm payrolls data, for further momentum on the pair. Initial support is seen at 0.6195 and resistance at 0.6511 levels.
AUD/USD is supported around 0.7000 levels and trading at 0.7020 levels. It has made intraday high at 0.7033 levels and low at 0.6981 levels. The Australian dollar tumbled to its weakest level in six years on Wednesday after an unexpectedly bad GDP growth reading took traders by surprise. Economic growth in Australia slowed to 0.2% in the June quarter from 0.9% in the March quarter, as lackluster mining and construction activity weighed on production. However, the recovery in the Aussie seems short-lived as the Australian currency remains under pressure from the ongoing growth concerns about China, its biggest trading partner. Meanwhile, traders now look forward to a slew of US economic data to be released later in the US session for further AUD/USD moves. Initial support is seen at 0.6945 and resistance at 0.7122 levels.
Equity Recap
Japan's benchmark Nikkei 225 index rose 0.18% to 18,197.85 points within the first hour of trade on Wednesday, but Tokyo's broader Topix gauge fell 0.44% to 1,471.57 points.
Hong Kong's benchmark Hang Seng index lost 0.62% to trade at 21,062.86 points at the opening bell, and mainland China's benchmark Shanghai Composite plunged 4.50% to 3,024.18 points at the same time.
Korea's benchmark Kospi index fell 0.66% to 1,902.55 points this morning in Seoul.
The benchmark Australian S&P/ASX 200 index slid 0.99% to 5,045.70 points in Sydney, with oil stocks leading declines after China's manufacturing data weighed on oil futures overnight.
New Zealand's benchmark S&P/NZX 50 index plunged 1.52% to 5,569.31 points this afternoon in Wellington.
Australia's S&P/ASX 200 index closes down 0.23 pct at 5,084.70 points.
Tokyo's Nikkei average unofficially closes down 0.39 pct at 18,095.40
Treasury Recap
New Zealand government bonds eased, pushing yields 1.5 basis points lower along the yield curve.
Australian government bond futures eased, with the three-year bond contract off 1 tick at 98.220. The 10-year contract was down 2.5 ticks to 97.3050.
Thailand 10 bln baht, 10.28-year government bond average accepted yield 2.8280 pct.
BOJ offers to supply 1.5 trln yen in funds at a fixed rate for 9/4-12/15 at all offices.
Commodity Recap
Gold edged lower on Wednesday with appetite for the metal soured by a firmer dollar despite weaker Asian equities, and failure to breach a key resistance and a looming U.S. rate hike suggest more downside risk. Spot gold was down 0.2 percent at $1,138.01 an ounce by 0301 GMT, after touching a one-week high of $1,147.16 on Tuesday.
US crude stocks built up over the past week and persisting worries over China dragged oil prices lower on Wednesday, extending Tuesday's steep falls. Futures for WTI slumped 2.14% to trade at $44.44 per barrel, while Brent futures were traded 1.82% lower at $48.66 per barrel.
