Tuesday 6th September: European Open Briefing

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Global Markets:

  • Asian stock markets: Nikkei up 0.25 %, Shanghai Composite rose 0.05 %, Hang Seng gained 0.20 %, ASX 200 declined 0.30 %
  • Commodities: Gold at $1330 (+0.30 %), Silver at $19.58 (+1.10 %), WTI Oil at $45.30 (+1.90 %), Brent Oil at $47.70 (+0.15 %)
  • Rates: US 10 year yield at 1.61, UK 10 year yield at 0.71, German 10 year yield at -0.05

News & Data:

  • RBA Cash Rate Target (Sept): 1.50% (est 1.50%, prev 1.50%)
  • RBA says home prices have risen moderately over past year
  • RBA says labour market data mixed, sees continued growth in employment
  • RBA says inflation expected to remain low for some time
  • RBA says rising a$ could complicate economic rebalancing
  • RBA says global monetary policy remains remarkably accommodative
  • RBA says, after easing in august, judged steady policy consistent with sustainable growth
  • RBA says pace of china growth appears to be moderating
  • RBA says global economy growing at lower than average pace
  • RBA says Australia economy continues to grow
  • RBA says large supply of apartments come on stream in next couple of years
  • Australia ANZ Weekly Consumer Sentiment (4/Sep): 114.3 (prev 118.4)
  • Australia Current Account (Q2): -15.54bn (est -19.75bn, prev -20.8bn)
  • Australia Net Exports Contribution (Q2): -0.20% (est 0.00%, prev 1.10%)
  • New Zealand QV House Prices (YoY, Aug): 14.60% (prev +14.10%)
  • PBoC fixes yuan @ 6.6676 (prev fix 6.6873, prev close 6.6768)
  • Japan's Suga: Japan will firmly implement policy for fiscal and economic growth –BBG

Markets Update:

The Australian Dollar rallied ahead of the RBA meeting, but the reaction to the decision was rather subdued as the central bank kept its rates unchanged, as expected. The monetary policy statement did not contain any surprises either. The rally in the AUD pushed the New Zealand Dollar higher as well. NZD/USD rose form 0.73 in the early Asian session to a high of 0.7325. Meanwhile, volatility in USD/CAD has decreased again, after a sharp move in Oil prices yesterday led to a CAD rally. USD/CAD traded in a 1.2915-35 range overnight.

EUR/USD started the day around 1.1150 and was caught in a 1.1140-60 range in Asia. GBP/USD opened at 1.3295 in Sydney and rallied to a high of 1.3325 later in the session. Resistance in the 1.3360-80 area proved to be difficult yesterday, but if it can clear that area, there is not much resistance until 1.35.

Upcoming Events:

  • 06:45 BST – Swiss GDP
  • 08:15 BST – Swiss CPI
  • 10:00 BST – Euro Zone GDP
  • 14:45 BST – US Services PMI
  • 15:00 BST – US ISM Non-Manufacturing PMI
  • 17:15 BST – SNB Chairman Jordan speaks

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