FX News Today
Asian Market Wrap: 10-year Treasury yields are down -0.5 bp and pulling back from yesterday’s highs, while 10-year JGBs jumped 1.4 bp to 0.103% in catch up trade, after yesterday’s move higher in US and European Bond markets, following strong US data. The stock rally fizzled out during the Asian session however, as trade and geopolitical jitters continue to cloud over the outlook. Technology shares in particular had benefited from robust data and hopes that Trump will make progress on trade yesterday, and the USA500 managed to close above 2,900 for the first time, while the NASDAQ hit fresh highs. Asian markets, meanwhile, are mostly in negative territory with an unexpectedly slump in Australian business investment and weakening confidence in New Zealand, backing a more sober assessment.
Most emerging market equity indices are in bear territory and cryptocurrencies declined, as China extended its ban to Guangzhou in the ongoing bid to crack down on digital assets. US stock futures are also in the red, while Oil prices are slightly higher and eyeing the USD 70 mark, with the WTI futures trading at USD 69.66 per barrel. The calendar is very crowded today with preliminary inflation readings from Germany and Spain, as well as the ESI economic sentiment reading, UK lending data, German jobless numbers and the Swiss KOF leading indicator. Brexit developments and Italian budget progress also remains in focus.
FX Update:The Dollar and the Yen have traded firmer against most other currencies as the risk-on sentiment that powered the USA500 and Nasdaq to new record highs waned in Asia. The USDindex is showing a modest rebound from lows, while EURUSD has concurrently tipped back under 1.1700. USDJPY was held in a narrow range below the 4-week high at 111.83 that was printed yesterday, as Wall Street romped higher amid hopes that the US and Canada would agree new trading terms by Friday to form a revamped (and possibly renamed NAFTA agreement). However, the Yen, during the Tokyo session today, has posted gains against the Euro and the Australian Dollar (and most other currencies) as Chinese stock markets have come under pressure and Asian equities, in general, are struggling. The Shanghai Composite was showing a 0.9% loss as of the early PM session, which dragged the MSCI Asia Pacific index into the red. Investors are concerned that next month, the US will act on its threat to implement tariffs on a further $200 bln worth of Chinese imports. AUDUSD dropped to a 6-day low of 0.7274 on Australian data misses, with Q2 Capex unexpectedly shrinking 2.5% versus the median forecast for 0.6% growth, and July building approvals fell 5.2% m/m, worse than the median for -2.0%. NZDUSD also dove to a 6-day low at 0.6646, after New Zealand’s August ANZ business survey fell to a 10-year low of -50.3.
Charts of the Day
Main Macro Events Today
- German Unemployment Change & German Prelim CPI – Expectations – The German official unemployment numbers are anticipated to have dropped a further -2K in August, which should leave the adjusted jobless rate at a very low 5.2%. Preliminary German HICP is seen 0.1%lower at 2.0% y/y from 2.1% y/y.
- Canadian GDP – Expectations – Real GDP is on course to accelerate to a 3.2% growth pace in Q2 (q/q, saar) from the anaemic 1.3% clip in Q1.
- US Core PCE & Personal Spending – Expectations – The Income is expected to rise 0.3%, after a 0.4% reading in May and June, while a stronger 0.4% increase is expected in consumer spending, supported by a solid gain in retail sales. The PCE chain price data is expected to post a 0.1% headline increase, with the core rising 0.2%, which would see the headline 12-month rate rise to a 2.3% y/y clip versus 2.2% previously, with the core rising to 2.0% y/y from 1.9%.
- German Buba President Weidmann speech
Support and Resistance Levels
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:
[ujicountdown id=”Next Webinar” expire=”2018/08/30 15:00″ hide=”true” url=”” subscr=”” recurring=”” rectype=”second” repeats=””]
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
