Friday 2nd September: European Open Briefing

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Global Markets:

  • Asian stock markets: Nikkei down 0.40 %, Shanghai Composite gained 0.05 %, Hang Seng rose 0.40 %, ASX 200 lost 0.90 %
  • Commodities: Gold at $1318 (+0.05 %), Silver at $19.05 (+0.50 %), WTI Oil at $43.35 (+0.50 %), Brent Oil at $45.70 (+0.50 %)
  • Rates: US 10 year yield at 1.58, UK 10 year yield at 0.67, German 10 year yield at -0.07

News & Data:

  • Japan Monetary Base (YoY, Aug): 24.2% (est 23.10%, prev 24.70%)
  • Japan Monetary Base End of Period (YoY Aug): JPY 404.5 trln (prev JPY 403.9 trln)
  • PBoC fixes yuan at 6.6727 (prev fix 6.6784, prev close 6.6780)
  • Chinese yuan overtakes Mexican peso as most actively traded emerging market currency – RTRS
  • PBoC's Yi: China has been successful in keeping yuan rate stable
  • BoJ's Sakurai: Plenty of scope to deepen negative rates, increase purchases, buy ETFs – RTRS
  • Sakurai: BoJ Unlikely to Change 2 % Inflation Target, Won't Do Anything Seen as Retreat from Easy Policy in Sept Policy Review
  • Sakurai: BoJ May Consider Ways to Change Shape of JGB Yield Curve in Sept Review as Yield Curve Has Flattened More Than Expected
  • Sakurai: Impossible for BoJ to Adopt 'Helicopter Money' Under Japan's Law
  • Russian Energy Min Novak: Russia is ready for informal talks with OPEC in Algiers –BBG

Markets Update:

The US Dollar extended losses overnight, following a weak ISM manufacturing PMI release. It arrived at 49.4 vs. 52.0 expected. The focus today will be on US employment data, with the market expecting a 180k NFP print.

EUR/USD rallied from 1.1135 to 1.1190 post-ISM and extended gains to 1.1210 in Asia. GBP/USD reached a high of 1.3315, but wasn't able to sustain gains and fell back to 1.3260 as Asia opened. It rose back to 1.3290 later in the session.

USD/JPY fell a 100 pips, but remained relatively well bid in Asia, despite the broad USD weakness. The pair traded in a 103.15-45 range overnight.

AUD/USD started around 0.7545 in Asia and rallied to 0.7560, while NZD/USD rose from 0.7275 to 0.7295.

Upcoming Events:

  • 09:00 BST – Italian GDP
  • 09:30 BST – UK Construction PMI
  • 13:30 BST – US NFP
  • 13:30 BST – US Unemployment Rate
  • 13:30 BST – US Average Hourly Earnings
  • 13:30 BST – Canadian Trade Balance
  • 15:00 BST – US Factory Orders
  • 18:00 BST – FOMC Member Lacker speaks
  • 20:30 BST – CFTC Positioning Data

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