Wednesday 7th September: European Open Briefing

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Wednesday 7th September: European Open Briefing 1

Global Markets:

  • Asian stock markets: Nikkei down 0.65 %, Shanghai Composite gained 0.35 %, Hang Seng fell 0.30 %, ASX 200 lost 0.05 %
  • Commodities: Gold at $1356 (+0.20 %), Silver at $20.10 (-0.20 %), WTI Oil at $45.00 (+0.40 %), Brent Oil at $47.50 (+0.55 %)
  • Rates: US 10 year yield at 1.54, UK 10 year yield at 0.66, German 10 year yield at -0.11

News & Data:

  • Australia GDP (QoQ, Q2): 0.50% (est 0.60%, prev 1.10%)
  • Australia GDP (YoY, Q2): 3.30% (est 3.40%, prev 3.10%)
  • Australia Performance of Construction (Aug): 46.6 (prev 51.6)
  • New Zealand Manufacturing Activity Volume (QoQ, Q2): 2.80% (prev -1.20%)
  • New Zealand Manufacturing Activity SA (QoQ, Q2): 2.20% (prev -2.60%)
  • Fed's Williams: Makes sense to raise rates sooner rather than later
  • Asia stocks hit one-year high as soft U.S. data quells Fed hike talk – RTRS
  • Fed's Williams says U.S. economy in good shape, wants rate hike – RTRS
  • Oil edges lower amid scepticism about output freeze – RTRS

Markets Update:

The US Dollar fell across the board after much weaker than expected US services PMI numbers. The ISM non-manufacturing PMI arrived at 51.4 vs 55.0 expected. All components showed a decline: Business activity fell from 59.3 to 51.8, employment from 51.4 to 50.7 and new orders from 60.3 to 51.4.

The British Pound benefited the most from this, and GBP/USD rallied from 1.3340 to a high of 1.3440 so far. In Asia, the pair retraced some of its recent gains, to 1.3405. EUR/USD rose from 1.1160 to 1.1260 following the weak ISM number, and traded 1.1235-60 overnight. Price action in the Euro is likely to be quiet ahead of tomorrow's ECB rate decision.

USD/JPY came under sharp pressure yesterday, falling from 103.40 to 102.00. It extended losses overnight and declined to a low of 101.20. Support is now seen at 101.00 and 100.00/10.

Upcoming Events:

  • 07:00 BST – German Industrial Production
  • 07:45 BST – French Trade Balance
  • 08:30 BST – UK Halifax House Price Index
  • 09:30 BST – UK Industrial Production
  • 09:30 BST – UK Manufacturing Production
  • 10:15 BST – BoE MPC Member Cunliffe speaks
  • 14:15 BST – Bank of England Governor Carney speaks
  • 15:00 BST – UK NIESR GDP Estimate
  • 15:00 BST – US JOLTs Job Openings
  • 15:00 BST – Bank of Canada Interest Rate Decision
  • 15:00 BST – Canada Ivey PMI
  • 19:00 BST – US Beige Book
  • 23:55 BST – RBA Assistant Governor Lowe speaks

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