Thursday 1st September: European Open Briefing

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Global Markets:

  • Asian stock markets: Nikkei up 0.15 %, Shanghai Composite fell 0.15 %, Hang Seng rose 0.50 %, ASX 200 declined 0.10 %

  • Commodities: Gold at $1312 (+0.05 %), Silver at $18.77 (+0.30 %), WTI Oil at $45.00 (+0.60 %), Brent Oil at $47.20 (+0.60 %)

  • Rates: US 10 year yield at 1.58, UK 10 year yield at 0.64, German 10 year yield at -0.06

News & Data:

  • China Manufacturing PMI (Aug): 50.4 (est 49.9, prev 49.9)

  • China Non-Manufacturing PMI (Aug): 53.5 (prev 53.9)

  • China Caixin Manufacturing PMI (Aug): 50 (est 50.2, prev 50.6)

  • Australia AIG Manufacturing Index (Aug): 46.9 (prev 56.4)

  • Australia Capital Expenditure (Q2): -5.40% (est -4.20%, prev -5.20%)

  • Australia Building CapEx (Q2): -10.60% (prev -7.90%)

  • Australia Retail Sales (MoM, Jul): 0.00% (est 0.30%, prev 0.10%)

  • Australia Plant/Machinery CapEx (Q2): +2.80% (prev -0.50%)

  • Japan Company Profits (Q2): -10.0% (prev -9.30%)

  • Japan Company Sales (Q2): -3.50% (prev -3.30%)

  • Japan Manufacturing PMI (Aug F): 49.5 (flash 49.6, July 49.3)

  • New Zealand Terms of Trade Index (QoQ, Q2): -2.10% (est -2.0%, prev 4.40%)

  • New Zealand Imports Prices (QoQ, Q2): 0.20% (est 0.00%, prev -4.30%)

  • New Zealand Exports Prices (QoQ, Q2): -2.50% (est -2.50%, prev 0.00%)

  • South Korea CPI (MoM, Aug): -0.10% (est 0.20%, prev 0.10%)

  • South Korea CPI (YoY, Aug): 0.40% (est 0.75%, prev 0.70%)

  • South Korea Core CPI (YoY, Aug): 1.10% (est 1.60%, prev 1.60%)

  • South Korea Current Account (KRW) (Jul): 8.32bn (prev rev to 11.32bn from 11.43bn)

  • PBOC fixes yuan at 6.6784 (vs. prev 6.6908)

Markets Update:

The US Dollar weakened slightly in Asia, but volatility continues to be rather low as traders are waiting for tomorrow's NFP release (expected at 180k). Overnight, the main event was the release of Chinese manufacturing PMI data, which arrived at 50.4 vs. 49.9 expected. This helped the Australian Dollar higher, as China is Australia's most important trading partner and tends to react to Chinese economic data.

AUD/USD rose from 0.7515 in the early Asian session to a high of 0.7545. NZD/USD also gained slightly overnight and increased from 0.7235 to 0.7260. USD/JPY came under pressure ahead of the Tokyo open amid profit-taking from USD longs, but it found good support ahead of 103.00 and was able to bounce back from there. Resistance is now seen at 104.00, while support lies at 102.85 and 102.20.

EUR/USD traded 1.1152-65 overnight, while GBP/USD was caught in a 1.3130-53 range.

Looking ahead, there will be plenty of manufacturing PMI releases today and we’ll also get the latest US initial jobless claims numbers.

Upcoming Events:

  • 08:15 BST – Swiss Retail Sales

  • 08:45 BST – Italian Manufacturing PMI

  • 08:50 BST – French Manufacturing PMI

  • 08:55 BST – German Manufacturing PMI

  • 09:00 BST – Euro Zone Manufacturing PMI

  • 09:30 BST – UK Manufacturing PMI

  • 13:30 BST – US Initial Jobless Claims

  • 14:45 BST – US Markit Manufacturing PMI

  • 15:00 BST – US ISM Manufacturing PMI

  • 17:00 BST – ECB's Nowotny speaks

  • 17:25 BST – FOMC Member Mester speaks

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