Monday 24th August: European Open Briefing

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Monday 24th August: European Open Briefing 1

Global Markets:

  • Asian stock markets: Nikkei down 3.20 %, Shanghai Composite lost 8.00 %, Hang Seng fell 4.10 %, ASX declined 3.40 %
  • Commodities: Gold at $1162 (+0.20 %), Silver at $15.23 (-0.45 %), WTI Oil at $39.40 (-2.55 %), Brent Oil at $44.50 (-1.80 %)
  • Rates: US 10 year yield at 1.99, UK 10 year yield at 1.80, German 10 year yield at 0.58

News & Data:

  • Japanese PM Abe: BoJ Missing 2 Year Inflation Target Cannot Be Helped Given Fall In Oil — RTRS
  • Australian Treasurer Hockey Calls For More Transparency From US Federal Reserve — BBG
  • RBNZ's Spencer: Interest Rate Rises Off The Table For Some Time
  • Japan EcoMin Amari: Expect Chinese Economy To Settle Down As Gov’t Takes Steps On Growth — RTRS
  • Japan EcoMin Amari: Weakness May Spread To Other Asia & ASEAN Nations

Markets Update:

It's been a while we have seen such moves in the markets, especially during an Asian session. The sell-off in the equity markets continues, with the Shanghai Composite down over 8 % and the Hang Seng 4 % lower. S&P 500 futures have already declined 2.50 % and WTI Oil is trading at fresh multi-year lows, slowly approaching $39.00.

In FX, the EUR rallied sharply. EUR/USD almost touched 1.15 and the moves in the cross pairs have been nothing less impressive, with EUR/AUD now close to 1.60 and EUR/GBP above 0.73. In EUR/USD, resistance next seen at 1.1530 and then 1.1680. USD/JPY immediately continued its sell-off at the Sydney open and declined from 121.95 to 120.85. Support now seen at 120.40 and a break below would pave the way for a 118.00 test.

CFTC Positioning Data:

  • EUR shorts 93K vs 115K short prior week
  • GBP short 4K vs 10K short prior week
  • JPY short 90k vs. 105K short prior week
  • CAD short 67K vs. 67k short prior week
  • CHF short 10K vs. 7k short prior week
  • AUD short 50K vs. 51K short prior week
  • NZD short 10K vs. 11K short prior week

Upcoming Events:

  • 06:00 BST – Japanese Leading Index
  • 20:55 BST – FOMC Member Lockhart speaks

The Week Ahead (Key Data & Events):

Tuesday, August 25th

  • 07:00 BST – German GDP
  • 09:00 BST – German IFO Business Climate
  • 14:45 BST – US Services PMI
  • 15:00 BST – US New Home Sales
  • 15:00 BST – US Richmond Manufacturing Index
  • 23:45 BST – New Zealand Trade Balance

Wednesday, August 26th

  • 13:30 BST – US Durable Goods Orders
  • 15:00 BST – FOMC Member Dudley speaks

Thursday, August 27th

  • 08:00 BST – Spanish GDP
  • 13:30 BST – US GDP
  • 13:30 BST – US Initial Jobless Claims
  • 15:00 BST – US Pending Home Sales

Friday, August 28th

  • 00:30 BST – Japanese Unemployment Rate
  • 00:30 BST – Japanese CPI
  • 00:30 BST – Japanese GDP
  • 06:45 BST – Swiss GDP
  • 08:00 BST – Spanish CPI
  • 09:30 BST – UK GDP
  • 13:00 BST – German CPI
  • 13:30 BST – US Personal Spending
  • 13:30 BST – US Personal Income
  • 15:00 BST – US Michigan Consumer Sentiment

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