Global Markets:

  • Asian stock markets: Nikkei up 0.40 %, Shanghai gained 0.20 %, Hang Seng dropped 0.30 %, ASX lost 0.50 %
  • Rates: US 10 year yield at 2.57
  • Commodities: Gold at $1234 (-0.40 %), Silver at $18.52 (-0.40 %), Crude Oil at $92.87 (+0.05 %)

News & Data:

  • New Zealand Business NZ PMI 56.5 vs 53.5 previous
  • New Zealand FPI 0.3 % vs -0.7 % previous
  • China New Loans CNY703bln vs CNY700bln expected
  • Japan Industrial Production vs 0.2 % expected

FX Overview:

  • AUD – AUD/USD fell from 0.9105 in early Asia to a low of 0.9050. The Aussie dropped sharply yesterday after traders took a better look at the employment numbers (from the 121k jobs, 106k were part-time), as well as the Chinese data (low inflation and PPI). Falling commodity prices are increasing the pressure on the currency. A test of the 0.90 support level seems imminent and a break below would signal further position unwinding in AUD/USD, as well as in other popular carry trades. To the topside, intraday resistance lies at 0.9080 and then 0.9110.
  • CAD – USD/CAD finally managed to close the day above the 1.10 level. The pair extended gains in Asia, rising from 1.1030 to a high of 1.1060. Buying dips remains the preferred strategy in the near-term, with 1.1025 and 1.10 solid intraday support levels. To the topside, expect some profit-taking ahead of the 1.11 option barrier, as well as supply from corporate names and option traders.
  • EUR – EUR/USD traded in a 1.2913-28 range overnight and flows were light. Traders seem a bit reluctant to get aggressive in shorting the Euro ahead of the FOMC and it is likely we will see a 1.2850-1.2950 consolidation until then. Selling interest on larger rallies remains high however, with offers resting again at 1.2950 and in better size towards 1.30. Intraday support at 1.2880 and 1.2860, while resistance noted at 1.2950 and then 1.2980.
  • GBP – GBP/USD rallied in the early Asia session as the IndyRef latest poll showed that 52 % voted for No and 48 % for Yes, excluding undecided. Key support now lies at 1.6190 and selling will likely resume should it break beneath that level. To the topside, key resistance at 1.6280 and then 1.6325 (Friday close level). With a few more polls scheduled ahead of the Scottish referendum vote (Sep 18th), it will stay volatile.
  • JPY – USD/JPY seems unstoppable. The pair reached again a fresh high in the overnight session, which is currently 107.38. It is trading at the highest levels since September 2008 and there is not much tech resistance until 109.00. The market might get disappointed with Yellen next week, but the overall uptrend will stay intact as the BoJ remains very dovish and the US recovery remains on track.

Upcoming Events:

  • 06:00 GMT – German WPI (-0.2 % MoM, -0.6 % YoY)
  • 06:05 GMT – Bank of Japan Governor Kuroda speaks
  • 07:00 GMT – Spanish CPI (0.1 % MoM, -0.5 % YoY)
  • 09:00 GMT – Italian CPI (0.2 % MoM, -0.1 % YoY)
  • 12:30 GMT – US Retail Sales (0.6 % MoM)
  • 12:30 GMT – US Core Retail Sales (0.3 % MoM)
  • 12:30 GMT – US Export Price Index (-0.2 % MoM)
  • 12:30 GMT – US Import Price Index (-0.9 % MoM)
  • 13:55 GMT – US Michigan Consumer Sentiment (83.3)
  • 14:00 GMT – US Business Inventories (0.4 % MoM)