Global Markets:

  • Asian stock markets: Nikkei up 0.10 %, Hang Seng and ASX both down 0.50 %, Shanghai closed for a holiday
  • Commodities: Gold at $1271 (+0.30 %), Silver at $19.29 (+0.70 %), Crude Oil at $93.27 (-0.05 %)
  • Rates: US 10 year yield at 2.44

News & Data:

  • Japan GDP QoQ -1.8 %, Expected: -1.8 %, Previous: -1.7 %
  • Japan GDP YoY -7.1 %, Expected: -7.0 %, Previous: -6.8 %
  • Japan Current Account +0.42Trl, Expected: +0.44Trl, Previous: -0.39Trl
  • China Exports 9.4 %, Expected: 8.0 %, Previous: 14.5 %
  • China Imports -2.4 %, Expected: 1.7 %, Previous: -1.6 %
  • China Trade Balance 49.8B, Expected: 40.0B, Previous: 47.3B
  • New Zealand FinMin English: Will keep interest rates low and will keep tight rein on spending
  • English: Will keep tight reign on spending, will allow NZ $500M on modest tax cuts and debt reduction
  • English: May start tax cuts by 2017, but not in the near term

CFTC Positioning:

  • AUD longs rose to 49,047 vs 41,938 in the previous week, most bullish since April 2013
  • EUR shorts rose to 161,423 vs 150,657 in the previous week, most bearish since July 2012
  • GBP longs fell to 9,448 vs 15,467 longs in the previous week, least bullish since Jan
  • JPY shorts rose to 117,308 contracts vs 102,891 shorts in the previous week, most bearish since Jan
  • CAD longs rose to 9,191 contracts vs 5,663 in the previous week, most bullish since Aug. 12
  • CHF short contracts were little changed at 13,167 vs 13,039 shorts in previous week

The Week Ahead:

There are not many important data releases today, but it should remain volatile in GBP/USD and the Sterling crosses after the weekend poll results. Most traders are expecting a No-vote on the Scottish independence referendum September 18th, but the market was too slow in pricing in the risk of a Yes-vote, which is why we have seen such a heavy decline in the Pound over the past few weeks.

On Tuesday, we’ll first see Australian NAB Business Confidence and Home Loans data, followed by the UK Trade Balance and Industrial/Manufacturing Production data in the European session. In the North American trading session, Canada will publish it’s Housing Start data and NIESR will release the UK GDP Estimate.

In the early Wednesday session, China will publish the number of new Yuan loans issued. The previous release saw a sudden decline to 385 billion and the estimate for this week’s print is 700 billion. We’ll also see the Australian Westpac Consumer Confidence number. No important data releases out of Europe or North America for that day.

The following day, the Reserve Bank of New Zealand will decide on interest rates and is expected to keep the main rate unchanged at 3.50 %. The central bank is likely to indicate a greater degree of comfort with the current level of the currency given the NZD has depreciated more than 2.5% on a trade-weighted basis since the RBNZ July OCR Review. A bit later, China will publish it’s inflation numbers, while Australia will release the unemployment rate and employment change data. In the EU session, we’ll see German CPI data and the ECB Monthly Report. A bit later in the day, US will publish the Initial Jobless Claims print.

Finally, on Friday, we’ll see US Retail Sales data and the University of Michigan Confidence survey results.

Upcoming Events:

  • 05:45 GMT – Swiss Unemployment Rate (3.0 %)
  • 06:00 GMT – German Trade Balance (16.8B)
  • 07:15 GMT – Swiss CPI (-0.1 % MoM, 0.0 % YoY)
  • 07:15 GMT – Swiss Retail Sales (2.6 %)
  • 08:30 GMT – Euro Zone Sentix Investor Confidence (2.0)
  • 12:30 GMT – Canadian Building Permits (-4.2 % MoM)