Global Markets:
- Asian stock markets: Nikkei rose 0.79 %, Shanghai Composite fell 2.68%, Hang Seng fell 1.42 %, ASX200 fell 1.39 %
- Commodities: Gold at $1138.21 (-0.18%), Silver at $14.57 (-0.29%), WTI Oil at $44.38(-2.27%), Brent Oil at $48.75 (-1.63 %)
- Rates: US 10 year yield at 2.15% UK 10 year yield at 1.93%, German 10 year yield at 0.79%
News & Data:
- Australian GDP 2.0% vs 2.2% Forecast
- IMF Chief Lagarde: Recent Market Turmoil Underlines Spillover Risk – RTRS
- Fitch: Hong Kong Resilience is very high amid China slowdown. HKD Peg strength is high given government strong finances. China growth will pick up rest of this year, and is unlikely heading for hard landing.
- Asian Development Bank Chief Nakao: China economy is slowing down; Yuan devaluating a bit is reflecting market fundamentals.
- New Zealand ANZ Commodity Price Index (MoM) Aug: -5.2% (prev -5.5%)
- Japanese EcoMin Amari: Too Early to declare end to deflation risk.
- China has room for Further Rate an& RRR Cuts – Sec News
- Dairy Prices up 10.9% in Fonterra Global Dairy Trade Auction
- US Treasury Official: China Should Clearly Communicate Policy Intentions & Actions; US Watching China FX Markets, Notes Large CNY Gain
- SNB’s Jordan: May have to live with negative deposit rates for some time; -0.75% not necessarily the bottom. Prepared to intervene in FX if needed, no deflationary spiral for Switzerland.
- Fed’s Rosengren: US Labor market has largely met Fed conditions. Less labour tightening diminishes confidence inflation to rise to 2%.
- US ISM Manufacturing (Aug): 51.1 (Est 52.5; prev 52.7).
Major currencies update: Asian equities are declining today in the Asian session, following continued declines in European, and US equities, with the S&P500 index closing down -2.96% yesterday, and the EuroSTOXX50, closing down -2.47%. The USD/JPY pair fell a sharp 180 pips in Tuesday’s trading, closing on its lows at 119.25. The pair has however began to regain some ground in today’s Asian trading with the Nikkei rallying despite a regional selling today in Asian markets, rising 100 pips, currently trading at the 120.00 figure. The euro climbed 110 pips yesterday, rising as shorts cover amid further risk-aversion, with spot currently at 1.1285, trading mildly down from today’s Asian open. After some relative inactivity, the pound has solidified its direction to the downside, selling off in Tuesday’s trading to a close of 1.5300, after offers at 1.5400 defended intraday gains. 1.5330 remains to be a key level (broken low of 8th of July) to watch.
Commodity currencies update: The AUD/USD sold off strongly in Tuesday’s trading, closing on its lows of 0.7015, following general equity market risk aversion, as well as exacerbated by recent declines this week in crude oil. Spot touched lows of 0.6980 today in reaction to the -0.2% miss in the Australia GDP release, though the pair is currently trading around the open of 0.7020.
Upcoming Events:
- 8:00 BST – Spanish Unemployment Change
- 9:30 BST – Construction PMI
- 13:15 BST – US ADP Non-Farm Employment Change
- 13:30 BST – US Revised Nonfarm Productivity q/q
- 15:00 BST – US Factory Orders m/m
- 15:30 BST – US Crude Oil Inventories
- 15:00 BST – United States ISM Manufacturing PMI
