Thursday 15th September: European Open Briefing

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Global Markets:

  • Asian stock markets: Nikkei down 1.25 %, Hang Seng rallied 0.45 %, ASX 200 gained 0.10 %, Shanghai Composite closed for holiday
  • Commodities: Gold at $1325 (-0.10 %), Silver at $18.97 (-0.50 %), WTI Oil at $43.70 (+0.30 %), Brent Oil at $46.10 (+0.55 %)
  • Rates: US 10 year yield at 1.71, UK 10 year yield at 0.89, German 10 year yield at 0.03

News & Data:

  • Australia Employment Change (Aug): -3.9K (est 15.0K prev 26.2K)
  • Australia Unemployment Rate (Aug): 5.6% (est 5.7% prev 5.7%)
  • Australia Participation Rate (Aug): 64.7% (est 64.9% prev 64.9%)
  • Australia Full Time Employment Change (Aug): 11.5K (prev -46.1K)
  • Australia Consumer Inflation Expectations (Sep): 3.3% (prev 3.5%)
  • New Zealand GDP (QoQ) Q2: 0.9% (est 1.1% rev prev 0.9%)
  • New Zealand GDP (YoY) Q2: 3.6% (est 3.7% rev prev 3.0%)
  • New Zealand Business NZ Manufacturing PMI (Aug): 55.1 (rev prev 55.5)
  • New Zealand GDP Expenditure (QoQ) Q2: 1.2% (rev prev 0.7%)
  • BoJ to Weigh Tougher Hurdles for Easing Exit — Nikkei
  • Japan PM Adviser Hamada: BoJ Has Ample Leeway to Loosen MonPol — Nikkei
  • Japan PM Adviser Nakahara: BoJ Should Increase Monetary Base Target To JPY 100 Tln P/A — FXS
  • BoJ to Make Negative Rates Centrepiece of Future Easing — RTRS

Markets Update:

The Australian Dollar fell after weaker than expected AUS employment numbers. Employment change arrived at -3.9k vs. +15k expected. The unemplyoment rate fell from 5.7 % to 5.6 %, but the participation rate declined as well, from 64.9 % to 64.7 %. Overall, the data was slightly disappointing, and AUD/USD fell from 0.7480 to a low of 0.7445.

Softer than expected New Zealand GDP data weighed on the NZ Dollar. NZD/USD declined from 0.73 in the early Asian session to a low of 0.7265 and later extended losses to 0.7255. New Zealand's GDP grew 0.9 % vs. 1.1 % expected. The year-on-year number arrived at 3.6 % vs 3.7 % expected.

USD/JPY remains the most volatile pair amongst the majors amid speculations about what the BoJ might announce next week. The pair fell from 102.60 to 101.90 after the Tokyo open, but found support there and is now back at 102.40.

Looking ahead, the main events today will be the SNB and BOE rate decisions. Both central banks are expected to keep rates unchanged.

Upcoming Events:

  • 08:30 BST – SNB Rate Decision
  • 09:30 BST – UK Retail Sales
  • 10:00 BST – Euro Zone CPI
  • 10:00 BST – Euro Zone Trade Balance
  • 12:00 BST – Bank of England Rate Decision
  • 13:30 BST – US Retail Sales
  • 13:30 BST – US Current Account
  • 13:30 BST – US Initial Jobless Claims
  • 13:30 BST – Philadelphia Fed Manufacturing Index
  • 13:30 BST – US PPI
  • 14:15 BST – US Industrial Production
  • 14:15 BST – US Manufacturing Production

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