Friday 19th August: European Open Briefing

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Global Markets:

  • Equities: Nikkei up 0.35 %, Shanghai Composite fell 0.50 %, Hang Seng declined 0.30 %, ASX 200 rose 0.20 %
  • Commodities: Gold at $1352 (-0.40 %), Silver at $19.63 (-0.60 %), WTI Oil at $48.35 (+0.30 %), Brent Oil at $50.90 (-0.05 %)
  • Rates: US 10 year yield at 1.55, UK 10 year yield at 0.55, German 10 year yield at -0.09

News & Data:

  • NZ Credit Card Spending (MoM) Jul: 2.3% (prev -0.8%)
  • NZ Credit Card Spending (YoY) Jul: 5.6% (prev 4.1%)
  • Japan Reuters Tankan Manufacturers Index Aug: 1 (prev 3)
  • Japan All Industry Activity Index (MoM) Jun: 1.0% (est 0.9%, prev -1.0%, rev -1.3%)
  • PBOC Fixes Yuan Reference Rate at 6.6211 (prev 6.6273)
  • Fed’s Williams: September rate hike should definitely be in play
  • Williams calls for raising rates sooner rather than later; delaying risks recession
  • Williams: Not in hurry to hike but can’t let economy overheat
  • Williams: Wage growth beginning to pick up
  • Williams: Negative rates would have bigger costs than benefits
  • Brent crude oil prices dip on U.S. profit taking – RTRS
  • Dollar nurses losses vs euro after Fed minutes quash hawks' hopes – RTRS

Markets Update:

The US Dollar regained some strength overnight after hawkish comments from Fed's Williams. EUR/USD fell from 1.1365 in the early Asian session to a low of 1.1327, while GBP/USD declined from 1.3180 to 1.3130. GBP/USD has been bid in the past few sessions amid a short squeeze, but it ran into decent resistance now at 1.3170/80 and the rally could stall here. Meanwhile, USD/JPY is back above 100. Many traders expected a sharp sell-off once the 100 level was taken out, but that did not happen and the pair continues to consolidate. While there have not been any signs of a BoJ intervention yet, they are closely watching.

The commodity currencies declined overnight. The Australian Dollar lost 0.60 % and fell from 0.7690 to 0.7625 against the US Dollar. Meanwhile, the New Zealand Dollar declined from 0.7290 to 0.7240. USD/CAD bounced off 1.2765 support and made it to 1.2810 overnight, but remains under pressure overall, as Oil prices continue to rally.

Upcoming Events:

  • 07:00 BST – German PPI
  • 13:30 BST – Canadian CPI
  • 13:30 BST – Canadian Retail Sales

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