Global Markets:

  • Asian stock markets: Nikkei up 0.30 %, Shanghai down 0.10 %, Hang Seng lost 0.20 %, ASX gained 0.45 %
  • Commodities: Gold at $1255 (+0.10 %), Silver at $19.01 (+0.30 %), Crude Oil at $92.88 (+0.20 %)
  • Rates: US 10 year yield at 2.495

News & Data:

  • Australian Home Loans 0.3 %, Expected: 1.0 %, Previous: 0.1 %
  • Australian NAB Business Confidence 8, Previous: 11
  • Japan Tertiary Industry Activity Index 0.0%, Expected: 0.3 %, Previous: 0.0 %
  • Japan EconMin Amari: Declines to comment about yen level; says that apporpriate FX level should be decided by the markets
  • Japan FinMin Aso: Gradual changes in FX are ideal; not thinking of an ideal FX level
  • Japan FinMin Aso: Sudden Changes in FX are not ideal
  • Japan FinMin Aso: No change to view that the economy is recovering; no plan to submit extra stimulus

FX Overview:

  • AUD – The commodity currencies remained under pressure amid broad USD strength. AUD/USD opened around 0.9280 in Asia. The disappointing econ data releases pushed it lower and the pair eventually reached a low of 0.9249. Plenty of trailing stops got cleared in the past few sessions, but a break of the 0.92 level will trigger another round of position covering. Positioning data shows the market actually increased AUD longs last week, and while it is far from being at extreme levels, this might help to accelerate downside momentum. To the topside, intraday resistance at 0.93 and then 0.9335.
  • CAD – USD/CAD finally broke above the 1.10 level. It is still struggling a bit to gain momentum, but a daily close above the level would attract further buying and pave the way for another 1.12 test.
  • EUR – EUR/USD started the session around 1.2895. The broad USD buying around 02:30 GMT pushed it to a low of 1.2865, but EUR demand in the cross pairs is keeping it somewhat supported. Leveraged names have been covering EUR/AUD and EUR/CAD shorts in the past three sessions. There are bids ahead of 1.2850 and offers from specs resting in front of the 1.29 level, but we might see a stop run above the big figure before the downtrend continues.
  • GBP – Cable extended losses in Asia, to a low of 1.6061. It seems most likely that we’ll see whipsaw price action until the Scottish Referendum (Sep 18th), but with a clear downside bias. No significant support now until 1.60.
  • JPY – USD/JPY broke above the 106.00 level yesterday after a heavy round of USD buying hit the market ahead of the London close. Dealers report strong demand from macro funds, other leveraged names and Real Money Funds. Overnight, the pair rose back above 106.00 and rallied to 106.33. Profit-taking flows and exporter supply capped the topside there, but the pair is likely to remain very well-bid. Expect good bids towards 105.80/85.

Upcoming Events:

  • 08:30 GMT – UK Industrial Production (0.2 % MoM, 1.3 % YoY)
  • 08:30 GMT – UK Manufacturing Production (0.3 % MoM, 2.2 % YoY)
  • 08:30 GMT – UK Trade Balance (-9.10B)
  • 08:30 GMT – UK Non-EU Trade Balance (-3.60B)
  • 12:15 GMT – Canada Housing Starts (195k)
  • 14:00 GMT – UK NIESR GDP Esitmate
  • 14:00 GMT – US JOLTs JOb Openings (4.72M)