Asian stock markets: Nikkei down 1.80 %, Shanghai Composite fell 0.45 %, Hang Seng dropped 1.75 %, ASX declined 1.60 %
Commodities: Gold at $1109 (+0.15 %), Silver at $15.18 (-0.65 %), WTI Oil at $42.80 (-0.65 %), Brent Oil at $49.40 (-1.00 %)
Rates: US 10 year yield at 2.08, UK 10 year yield at 1.83, German 10 year yield at 0.63
News & Data:
Japan Industrial Production (MoM) Jun, F: 1.1%
Japan Industrial Production (YoY) Jun, F: 2.3%
Australia Wage Price Index (QoQ) Q2: 0.6% (exp 0.6% prev 0.5%)
Australia Wage Price Index (YoY) Q2: 2.3% (exp 2.3% prev 2.3%)
Australia Westpac Consumer Confidence Index SA (MoM) Aug: 7.8% (prev -3.2%)
PBOC Fixes Yuan Reference Rate At 6.3306 (prev 6.2298)
PBoC: Today’s CNY Devaluation Is Based On Fresh Economic Data
PBoC: No Foundation For CNY Constant Devaluation
The People’s Bank of China put the Yuan fixing at 6.3306 vs 6.2298 yesterday, which led to another round of USD strength. The Yuan devaluation had a large impact on global markets yesterday, with commodities and stocks of some major US & EU companies falling. It seems likely that the higher volatility in the Yuan will persist for a while.
USD/JPY broke above the 125.00 level and extended gains towards 125.30 overnight. Offers proved to be heavy there, but it remains very well bid. No significant resistance until 125.80 now and we are likely to see a test of that level soon.
EUR/USD topside was capped at 1.1080 yesterday, but the Euro is doing very well overall, partly due to demand in the crosses. EUR/CHF reached a new post-SNB high and is slowly on its way to 1.10. GBP/USD has failed to stay above 1.56 for long and has dropped to a low of 1.5533 overnight. The focus is now on UK employment data, which will be released at 0930 BST.