Global Markets:
- Asian stock markets: Nikkei up 0.15 %, Shanghai Composite fell 0.35 %, Hang Seng declined 1.05 %, ASX 200 fell 0.30 %
- Commodities: Gold at $1258 (+0.20 %), Silver at $17.61 (+0.60 %), WTI Oil at $50.90 (+0.20 %), Brent Oil at $52.60 (+0.40 %)
- Rates: US 10 year yield at 1.77, UK 10 year yield at 0.99, German 10 year yield at 0.03
News & Data:
- Japan Machinery Orders (MoM)Aug: -2.2% (est. -4.70%, prev. 4.90%)
- Japan Machinery Orders (YoY)Aug: 11.6% (est. 7.90%, prev. 5.20%)
- Australia Credit Card Purchases (AUD) Aug: 26.8B (prev. 23.6B)
- Australia Credit Card Balances (AUD) Aug: 51.3B (prev. 51.3B)
- South Korea Unemployment Rate SA Sep: 4.0% (est. 3.80%, prev. 3.80%)
- South Korea M2 Money Supply (MoM) Aug: 0.7% (prev.0.70%)
- PBOC sets USD/CNY mid-point at 6.7258 (prev. fix 6.7098, prev fix 6.7185)
- Asia shares slip as U.S. earnings disappoint, dollar gains – RTRS
- Dollar pressured by sterling's rebound from selloff – RTRS
Markets Update:
GBP/USD remains highly volatile. The pair fell from 1.23 to 1.2090 in yesterday's NY session, only to retrace the entire move in Asia and reach a high of 1.2320. There was no news that could have triggered either of the moves, so price action is still purely flow-driven. There were also large squeezes in the GBP cross pairs. EUR/GBP declined from 0.9120 to 0.8970, while GBP/JPY rallied from 124.80 to 127.60. GBP traders should get used to the high volatility in the near-term, as uncertainties around the Brexit process continue to make traders nervous.
EUR/USD flows were light and the pair traded 1.1040-70 overnight. The next major support level is 1.10, while resistance is now seen at 1.1120. USD/JPY fell overnight amid the risk-off bias in markets, from 103.70 to 103.30.
However, the commodity currencies bounced despite the risk-off sentiment, mostly due to the USD weakness that the rally in GBP caused. AUD/USD rallied from 0.7535 to 0.7590, while NZD/USD rose from 0.7050 to 0.7095.
Upcoming Events:
- 07:00 BST – German WPI
- 07:45 BST – French CPI
- 10:00 BST – Bank of England Member Cunliffe speaks
- 10:00 BST – Euro Zone Industrial Production
- 13:00 BST – FOMC Member Dudley speaks
- 14:40 BST – FOMC Member George speaks
- 15:00 BST – US JOLTs Job Openings
- 19:00 BST – FOMC Meeting Minutes
