Market Roundup
- Japan MoF ViceFinMin Asakawa – Reiterates will act appropriately on excessive FX market moves, eyeing markets closely.
- Japan July trade surplus Y513.5 bln, Y283.7 bln eyed, exports -14.0% y/y, imports -24.7%, -14.0% and -20.6% eyed, exports to China -12.7%, Asia -13.9% and to US -11.8% y/y, exports fall at fastest pace since October ‘09.
- Japan July crude oil import volume -8.5% y/y, LNG -5.4%, thermal coal -14.4%.
- MoF flow data week-ended Aug 13 – Japanese buy net Y141.4 bln foreign stocks, Y1.2975 trln bonds, sell Y85.2 bln bills; foreign investors buy net Y94.7 bln Japanese stocks, Y474.8 bln bonds, sell Y1.7355 trln bills.
- Japan looks to simplify foreign investment procedures – Nikkei.
- China July new home prices +7.9% y/y, Beijing +20.7%, Shanghai +27.3%, June +7.3%, +20.3% and +27.7%, rise best since February ’14.
- UK to avoid recession and world economy to stabilize as Brexit shock passes.
- Australia July employment +26.2k, unemployment 5.7%, participation 64.9%, +11.0k, 5.8% and 64.9% eyed, full-time employment -45.4k.
- New Zealand August ANZ/RM consumer confidence index 117.7, July 118.2.
- New Zealand July job advertisements +1.4% m/m, +9.8% y/y, labour demand up.
Economic Data Ahead
- (0400 ET/0800 GMT) Euro Zone June current account balance; last E15.4 bln surplus nsa, E30.8 bln surplus sa.
- (0400 ET/0800 GMT) Euro Zone June net investment flows; last E46.7 bln inflow.
- (0430 ET/0830 GMT) UK July retail sales, +0.2% m/m, +4.2% y/y eyed; last -0.9%, +4.3%.
- (0430 ET/0830 GMT) UK July - ex-fuel, +0.4% m/m, +3.9% y/y eyed; last -0.9%, +3.9%.
- (0500 ET/0900 GMT) Euro Zone July inflation – final, -0.5% m/m, +0.2% y/y eyed; flash +0.2%, +0.2%.
- (0500 ET/0900 GMT) Euro Zone July – ex-food/energy, -0.7% m/m, +0.9% y/y eyed; last unchanged, +0.8%.
- (0830 ET/1230 GMT) US August Philly Fed business sentiment index, 2.0 eyed; last -2.9.
- (0830 ET/1230 GMT) US weekly initial jobless claims, 265k eyed; last 266k.
- (1000 ET/1400 GMT) US July leading indicators index, +0.3% m/m eyed; last +0.3%.
Key Events Ahead
- N/A Annual Norway political forum, various speakers (final day).
- N/A Sweden SEK700/300 mln 1.0/0.125% 2026/32 inflation-linked bond auctions.
- (0730 ET/1130 GMT) ECB July 21 meeting minutes.
- (0830 ET/1230 GMT) Canada June securities flows.
- (1000 ET/1400 GMT) NY Fed Dudley press briefing on regional economic conditions.
- (1300 ET/1700 GMT) US Treasury Federal Advisory Committee on Insurance open meeting.
- (1600 ET/2000 GMT) SF Fed Williams speaks at Anchorage luncheon.
FX Recap
USD: The dollar's index against a basket of six major currencies last stood at 94.63, hovering near Tuesday's seven-week low of 94.426 and having lost 1.1 percent so far this week.
EUR/USD: The euro traded at $1.1301, near Tuesday's seven-week high of $1.1323. The Intraday bias remains bullish till the time pair holds key support at 1.1177 levels. A sustained break above $1.1427 will drag the parity up towards key resistances at $1.1529/$1.1622/$1.1785 and $1.1833 marks. Key supports are seen at $1.1215/$1.1152.
USD/JPY: The yen firmed 0.4 percent to 99.87 yen per dollar, coming within sight of its seven-week peak of 99.55 to the dollar set on Tuesday. A break there would open the way for a test of its 2 1/2 year high of 99.00 to the dollar touched on June 24 in the wake of Britain's EU referendum results. Major support and resistance levels are seen at 98.78 and 101.92 marks respectively.
GBP/USD: The pound fetched $1.3050, after momentarily falling to as low as $1.2850 from what appeared to be a "fat finger" trading mistake. The dollar also weakened against the British pound, which was threatening earlier this week to test the three-decade low it hit last month on worries UK data this week could provide the first proof of economic damage from the Brexit vote. Data published so far, however, shows limited tangible fallout from Brexit, with jobless claims unexpectedly falling in July. UK retail sales data due at 0830 GMT is expected to show a 0.2 percent rise in July after a sharp fall in June.
AUD/USD: The Australian dollar rallied around half a U.S. cent to $0.7718, pulling closer to a three-month peak of $0.7760 touched last week. The Australian dollar received a fillip on Thursday after better-than-expected domestic jobs figures supported expectations that interest rates are likely to stay on hold for a couple of months at least. Resistance was found at a major retracement of $0.7724. Australia’s July employment increases to 26.2 k (forecast 11.0 k) vs previous 7.9 k. In addition, Australia’s July unemployment rate decreases to 5.7 % (forecast 5.8 %) vs previous 5.8%.
NZD/USD: The New Zealand dollar was dragged higher to $0.7310, from $0.7242 in early trade, after the stronger-than expected Australian jobs data. A sustained close above $0.7297 will drag the parity higher towards key resistance around $0.7338, $0.7367 and $0.7494 levels. Initial support level is seen at $0.7165.
Equities Recap
Japan’s Nikkei 225 was trading 0.19 percent lower at 16,714.42 points.
South Korea’s Kospi was trading around 0.46 percent higher at 2,053.11 points.
Shanghai composite index to open down 0.1 pct at 3,107.75 points and China's CSI300 index to open down 0.1 pct at 3,369.95 points.
Hong Kong's Hang Seng was trading 1.54 percent higher at 23,152.14 points.
Australia's S&P/ASX 200 was trading 0.55 percent lower at 5,504.10 points.
Commodities Recap
Oil prices dipped in early trading on Thursday as the prospect of record Saudi output weighed on markets and as traders cashed in on profits following an almost uninterrupted price rally this month of nearly 20 percent. International Brent crude oil futures were trading at $49.67 per barrel at 0050 GMT, down 18 cents from their last close.
Gold erases previous losses on Thursday and remains well supported above $1,350 marks. Gold steadied on Wednesday, after moving in both directions following the release of minutes from the U.S. Federal Reserve's July meeting, which showed the central bank's policymakers expected an interest rate hike soon but were still awaiting more data. Spot gold was up 0.02 percent at $1,345.96 an ounce by 3:04 pm. EDT (1904 GMT). It had fallen 0.6 percent to $1,337.22 immediately after the minutes were released and then risen 0.4 percent.
Treasuries Recap
New Zealand government bonds were mixed across the curve, down 1.5 basis points at the short end and up 2 bps at the long end.
Australian government bond futures had a firmer tone, with the three-year bond contract up 1 tick at 98.630. The 10-year contract rose 3 ticks to 97.5900, while the 20-year contract added 4 ticks to 97.5900.
U.S. 10-year treasury yield was at 1.542 pct vs U.S. close of 1.561 pct on Wednesday.
