Market Roundup
- Japan Nationwide July core CPI sees biggest y/y rise since March ’15
- Japan July core CPI +0.5% y/y, Tokyo Aug core +0.4%, +0.5% and +0.3% eyed
- Japan July corp service prices +0.6% y/y, June rev +0.7%, slows on ads
- No plan to compile supplementary budget - Japan EconMin, CabSec
- UK consumer morale edges up but gloom over finances deepens
- In photos, North Korea signals a more powerful ICBM in the works
- Trump blames fellow Republican leaders for debt ceiling 'mess'
- US House Speaker Ryan says rates must be permanent in tax reform
- New Zealand to increase military personnel in Afghanistan by three
- U.S. muni bond funds post $635.7 mln in outflows-Lipper
- Foreign CB US debt holdings +$9.1 bln to $3.3 tln August 16 week
- Treasuries +$9.0 bln to $3.0 tln, agencies +$398 mln to $262 bln
Economic Data Ahead
- (0245 ET/0645 GMT) France Aug Consumer confidence, 103 eyed, last 104
- (0200 ET/0700 GMT) Germany Aug Ifo Business climate, 115.5 eyed, last 116.0
- (0200 ET/0700 GMT) Germany Aug Ifo Current conditions, 125 eyed, last 125.4
- (0200 ET/0700 GMT) Germany Aug Ifo Expectations, 106.8 eyed, last 107.3
Key Events Ahead
- (0605 ET/1005 GMT) Great Britain Stg 2.0/1.5/2.0 bln for 1/3/6 month auctions
- (0700 ET/1100 GMT) Riksbank general council meeting
- (1500 ET/1900 GMT) ECB's Draghi speaks at the Jackson Hole meeting
FX Beat
DXY: The dollar held gains versus most of its major peers as some participants bought back the currency to square positions ahead of a meeting of central bankers in Jackson Hole, Wyoming. The greenback against a basket of currencies traded flat at 93.31, having touched a high of 94.15 last week, it’s highest since July 26. FxWirePro's Hourly Dollar Strength Index stood at 23.19 (Neutral) by 0500 GMT.
EUR/USD: The euro eased, extending previous session losses, as investors’ seek clues from the much-awaited Jackson Hole Symposium. Markets seem to refrain from placing any big bets on the major, in the wake of rising expectations of a hawkish twist to be delivered by the Fed Chair Yellen and ECB President Draghi at the Jackson Hole event. The European currency traded flat at 1.1795, having touched a high of 1.1828 on Monday, its highest since Aug. 14. FxWirePro's Hourly Euro Strength Index stood at 81.42 (Slightly Bullish) by 0400 GMT. Investors’ attention will remain on the German Ifo surveys, ahead of the U.S. durable goods data. Immediate resistance is located at 1.1838 (Aug 14 High), a break above targets 1.1889. On the downside, support is seen at 1.1720 (61.8% retracement 1.1370 and 1.1909), a break below could drag it near 1.1638 (50.0% retracement 1.1370 and 1.1909).
USD/JPY: The dollar steadied as traders awaited the Jackson Hole speeches later in the day. Investors expect there could be hints towards a further U.S. rate hike later in the year that would support the greenback, unless there are hints of a dovish hike. The major was trading flat at 109.59, having hit a low of 108.60 last week, its lowest since Apr. 19 2016. FxWirePro's Hourly Yen Strength Index stood at -31.44 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. durable goods data and Fed Yellen's speech for further momentum. Immediate resistance is located at 109.99 (61.8% retracement of 112.19 and 108.60), a break above targets 110.41 (50.0% retracement of 112.19 and 108.80). On the downside, support is seen at 109.25(5-DMA), a break below could take it near 108.60 (August 18 Low).
GBP/USD: Sterling rose above the 1.2800 handle after tumbling to a near-two-month low against the dollar, despite the outlook appearing clouded by concerns about Brexit risk and economic fundamentals. The major traded 0.1 percent up at 1.2811, having hit a low of 1.2773 the day before, its lowest since June 26. FxWirePro's Hourly Sterling Strength Index stood at -58.96 (Bearish) by 0400 GMT. Investors’ focus will remain on the U.S. fundamental drivers, amid lack of economic data from the UK docket. Immediate resistance is located at 1.2837 (5-DMA), a break above could take it near 1.2878 (10-DMA). On the downside, support is seen at 1.2750, a break below targets 1.2722 (June 19 Low). Against the euro, the pound was trading 0.1percent up at 92.08 pence, having hit a 10-1/2 month low of 92.36 pence on Wednesday.
AUD/USD: The Australian dollar consolidated near the 0.7900 handle, with traders on standby awaiting the speeches at the Kansas City Fed’s annual symposium in Jackson Hole Jackson, Wyoming. The Aussie trades flat at 0.7902, having hit a high of 0.7962 last week, it’s strongest since Aug. 04. FxWirePro's Hourly Aussie Strength Index stood at -41.79 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7869 (August 18 Low), a break below targets 0.7807. On the upside, resistance is located at 0.7934 (Aug 16 High), a break above could take it near 0.7980.
NZD/USD: The New Zealand dollar held firm near two-month lows, amid increased nervousness as investors awaited speeches by central bankers at the Jackson Hole Symposium for the next direction. The Kiwi trades flat at 0.7211, having touched a low of 0.7191 on Thursday, its lowest level since June 16. FxWirePro's Hourly Kiwi Strength Index was at -154.72 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7274 (78.6% retracement of 0.7558 and 0.7223), a break above could take it near 0.7337 (August 21 Low). On the downside, support is seen at 0.7170 (June 12 Low), a break below could drag it till 0.7126 (June 6 Low).
Equities Recap
Asian shares rose, while the dollar steadied against a basket of currencies as attention shifted to the central bankers' symposium in Jackson Hole, Wyoming, that began on Thursday.
MSCI's broadest index of Asia-Pacific shares outside Japan steadied and was heading for a 0.7 percent weekly gain.
Tokyo's Nikkei rallied 0.6 percent to 19,464.51 points, Australia's S&P/ASX 200 index edged up 0.03 percent to 5,747.50 points and South Korea's KOSPI gained 0.2 percent to 2,380.20 points.
Shanghai composite index rose 1.61 percent to 3,324.64 points, while CSI300 index was trading 1.5 percent up at 3,788.30 points.
Hong Kong’s Hang Seng was trading 1.05 percent higher at 27,809.71 points. Taiwan shares added 0.3 percent to 10,515.51 points.
Commodities Recap
Crude oil prices rose, reversing most of its previous session losses as the U.S. petroleum industry prepared for potential output disruptions as Hurricane Harvey headed to hit the U.S. mainland in 12 years. International benchmark Brent crude was trading 0.6 percent up at $52.42 per barrel by 0423 GMT, having hit a high of $52.93 last week, its strongest since Aug. 8. U.S. West Texas Intermediate was trading 0.3 percent up at $47.74 a barrel, after rising as high as $48.71 last week, its highest since Aug. 14.
Gold prices steadied as the greenback extended losses for the second straight session, with investors awaiting directional clues from speeches due later in the day at a gathering of central bankers in the United States. Spot gold rose 0.1 percent at $1,286.59 an ounce by 0427 GMT, after declining nearly 0.3 percent in the previous session. U.S. gold futures for December delivery were flat at $1,291.40 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.188 percent higher by 0.005 bps, while 5-year yield was 0.001 bps up at 1.773 percent.
The Japanese government bond market retained its bullish momentum and edged up. The benchmark 10-year JGB yield declined by half a basis point to 0.015 percent, its lowest since May 2. The sorter-dated JGB maturities outperformed, with the five-year yield dropping 1.5 basis points to a 3-1/2-month low of minus 0.135 percent. The 30-year yield nudged up half a basis point to 0.825 percent, pulling away from a near two-month low of 0.815 percent set on Thursday.
The Australian government bond futures slipped, with the three-year bond contract down 2 ticks at 98.010. The 10-year contract was off 1 tick to 97.3600.
The New Zealand government bonds gained, sending yields 5 basis points lower.
The Canadian government bond prices were lower across the maturity curve, with the two-year price down 1 Canadian cent to yield 1.266 percent and the benchmark 10-year falling 4 Canadian cents to yield 1.886 percent. The Canada-U.S. two-year bond spread stood at -6.5 basis points, while the 10-year spread stood at -30.9 basis points.
