Global Markets:

  • Asian stock markets: Nikkei up 0.60 %, Shanghai Composite gained 0.80 %, Hang Seng rose 0.15 %, ASX declined 0.30 %
  • Commodities: Gold at 1249$ (0.30 %), Silver at 19.96$ (0.20 %), Crude Oil at 91.88$ (0.20 %)
  • Rates: US 10 year yield at 2.53

News & Data:

  • Australia Employment change 121k vs 12k f/c
  • Australia Unemployment rate 6.1 % vs 6.3 % f/c
  • Australia Participation rate 65.2 % vs 64.8 % f/c
  • China CPI YoY 2.0 % vs 2.2 % f/c
  • China PPI YoY -1.2 % vs -1.1 % f/c
  • RBNZ keeps key rate unchanged at 3.50 %
  • RBNZ Governor Wheeler says prudent to pause before considering more rises
  • Wheeler: NZD levels are unjustified and unsustainable
  • Wheeler: Inflation pressures still likely to emerge. Rates are still below the “neutral” level, still stimuluating the economy
  • Reserve Bank of New Zealand raises 1Q 2015 GDP forecast from 2.7% to 3.2%. 1Q 2016 forecast from 2.4% to 2.6%

FX Overview:

  • AUD – AUD/USD rallied after strong employment change data. It reached a high of 0.9218 before the move ran out of steam. The pair is likely to remain bid in the upcoming London session and bulls will be looking for a break above the 0.9220 level. To the downside, key intraday support at 0.9250.
  • CAD – USD/CAD flows were light. The pair hit a low of 1.0935 in the late NY session, but has been able to recover from there, reaching a session high of 1.0957 earlier.
  • CHF – EUR/CHF rallied to 1.2118 after the SNB said that extra measures will be taken to defend the 1.20 floor if needed, including negative rates. USD/CHF rose to 0.9395, but move stalled there amid the USD weakness in the past two sessions. Key support now at 0.9320, while the obvious resistance level lies at 0.94. Above there, next resistance at the September 2013 high of 0.9452.
  • EUR – EUR/USD opened in NY around 1.2930 and hit a low of 1.2882 amid USD/CHF strength after the SNB comments. Fast money names sold the break of 1.29 and stops below got triggered, but momentum waned away quickly. The pair bounced from there and eventually moved back to 1.2920 in early Asia. Offers are resting in front of the 1.2950 level, while bids at 1.2880 said to be solid. Intraday stops through 1.2960/65. US leveraged funds were noted sellers of EUR/AUD in the early NY session as the pair failed to reach 1.42 resistance. EUR/GBP got under pressure as well, with the bids at 0.7980 filled easily and stops cleared down to 0.7960. Next support lies at 0.7925, which is last Friday’s close.
  • GBP – Cable rallied as the latest poll surprisingly showed a 53 % for No and 47 % for Yes, excluding the “Undecided”-votes. The pair rallied to 1.6228, which is the weekly high posted on Monday, and stalled there. There are several more polls ahead before the final vote comes out on September 18th, so it will stay very volatile with whipsaw price action. The next major resistance is Friday’s close of 1.6320, while support lies at 1.6150 and then 1.6120.
  • JPY – In USD/JPY, solid bids reported towards 106.50. Dealers report larger offers ahead of the 107.00 barrier option, but also sizeable stops resting above.
  • NZD – The Kiwi dropped to 0.8180 after a more dovish RBNZ than expected. The RBNZ’s 90-day interest rate forecast was lowered by 49bps, while the market was expecting only 30bps. The forecast implies the next hike will be in the second quarter of 2015 and a total of 100bps in rate hikes for the rest of the tightening cycle. Despite the recent decline in the Kiwi, the RBNZ noted that the “current level remains unjustified and unsustainable”.

Upcoming Events:

  • 06:00 GMT – German CPI (0.0 % MoM, 0.8 % YoY)
  • 07:45 GMT – French CPI (0.4 % MoM, 0.5 % YoY)
  • 08:00 GMT – ECB Monthly Report
  • 12:30 GMT – US Initial Jobless Claims (300k)