Global Markets: 

  • Asian stock markets: Nikkei down 1.00 %, Shanghai Composite gained 0.40 %, Hang Seng declined 0.70 %, ASX fell 0.80 %
  • Commodities: Gold at $1212 (-0.05 %), Silver at $17.18 (-0.30 %), Crude Oil at $87.73 (-1.30 %)
  • Rates: US 10 year yield at 2.362, German 10 year yield at 0.903, UK 10 year yield at 2.283 

News & Data: 

  • China HSBC Services PMI 53.5, Expected: 53.8, Previous: 54.1
  • Japan Current Account 0.287trln, Expected: 0.198trln, Previous: 0.417trln
  • Japan Adjust Current Account 0.13trln, Expected: 0.19trln, Previous: 0.10trln
  • Australia Bureau of Statistics (ABS) to revise August and July employment data
  • ABS previously reported original employment rose 32k in August, compared to seasonally adjusted increase of 121k
  • Japan Chief Cabinet Secretary Suga remarks that economic conditions have changed. Says firms are monitoring global trend and weakening JPY
  • Japan Gov’t Adviser Ito: GPIF should hold 20-25% of assets in Japanese stocks. New asset mix announcement delayed until December 

FX Overview: 

Asian equity markets are mostly lower this morning and weaker than expected Chinese econ data overnight added to the sour sentiment. Shanghai opened today after being closed a week for holidays and is slightly higher on the day. Commodities are mixed – Gold and Silver are holding well, but Oil prices have collapsed to fresh lows. Overall, the market is likely to consolidate until the FOMC minutes tonight given the lack of data.

In FX, the USD regained some strength after the stops in USD/JPY were cleared. The dip to 107.75 saw decent demand from various leveraged names and Tokyo names were eager buyers as well at the open. The pair rallied to 108.50 and dealers note solid offers resting at 108.80. Stops seen through 108.85 and above 109.00. The key short-term resistance level lies at 109.20 and bulls will need to take that one out to regain some strength.

In AUD/USD, Asia is talking about larger bids from 0.8730 down to 0.8720. A break below 0.87 would confirm the double top at 0.8830 and pave the way for a test of 0.8640 (October 3rd low). Keep an eye on 1.13 in AUD/NZD as well – not much resistance until 1.1575/1.16 if that level goes.

USD/CAD barely moved in the past two sessions and is still caught in a 1.1140-95 range. Dealers saw modest demand, first from real money names and then from macro funds on the dip to 1.1150. Stops reported through 1.1130 and decent bids in front of the big figure. To the topside, offers at 1.1220.

Upcoming Events: 

  • 05:45 GMT – Swiss Unemployment Rate (3.0 %)
  • 12:15 GMT – Canadian Housing Starts (197k)
  • 18:00 GMT – US FOMC Meeting Minutes