Market Roundup
- Fitch affirms Hong Kong at 'AA+'; outlook stable
- India Aug Nikkei Markit services PMI increase to 54.7 vs previous 51.9
- Saudi Arabia Aug emirates NBD comp PMI increase to 56.6 vs previous 56.0
- G20 - Japan pm Abe told G20 session G20 as a whole needs to share sense of urgency to put global economy back on growth path - Japan senior government spokesman
- G20 - Japan pm Abe told G20 session downside risk to global economic outlook increasing - Japan senior government spokesman
- BOJ Gov Kuroda: strongly hope government continues with efforts to boost Japan's growth potential, push through structural reforms
- BOJ Gov Kuroda: conditions for wages, prices to rise are falling in place so expect underlying price trend to improve steadily ahead
- BOJ Gov Kuroda: Japan's jobless rate is near full employment but tightening job market has yet to sufficiently push up wages, prices
- BOJ Gov Kuroda: See room to deepen negative rates further, must consider costs and benefits of doing so when guiding monetary policy
- BOJ Gov Kuroda: Won't comment on what level can be the limit in terms of deepening negative rates
- BOJ Gov Kuroda: Expect china's economy to achieve fairly stable growth due in part to government stimulus steps
- BOJ Gov Kuroda: I am not too pessimistic on outlook of China's economy
- BOJ Gov Kuroda: Have no specific idea now on how comprehensive assessment will affect direction of monetary policy
Economic Data Ahead
- (0300 ET/0700 GMT) Turkey CPI MM
- (0300 ET/0700 GMT) Turkey CPI YY
- (0300 ET/0700 GMT) Turkey PPI MM
- (0300 ET/0700 GMT) Turkey PPI YY
- (0345 ET/0715 GMT) South Africa Std Bank Whole Econ PMI
- (0315 ET/0715 GMT) Spain Services PMI
- (0330 ET/0730 GMT) Sweden Ind Production MM
- (0330 ET/0730 GMT) Sweden Ind Production YY
- (0330 ET/0730 GMT) Sweden New Orders Manuf. YY
- (0345 ET/0745 GMT) Italy Markit/ADACI Svcs PMI
- (0350 ET/0750 GMT) France Markit Serv PMI
- (0350 ET/0750 GMT) France Markit Comp PMI
- (0355 ET/0755 GMT) Germany Markit Services PMI
- (0355 ET/0755 GMT) Germany Markit Comp Final PMI
- (0400 ET/0800 GMT) Eurozone Markit Serv Final PMI
- (0400 ET/0800 GMT) Eurozone Markit Comp Final PMI
- (0430 ET/0830 GMT) Eurozone Sentix Index
- (0430 ET/0830 GMT) Great Britain Markit/CIPS Serv PMI
- (0500 ET/0900 GMT) Eurozone Retail Sales MM
- 0500 ET/0900 GMT) Eurozone Retail Sales YY
- 0500 ET/0900 GMT) Norway Housing Price YY
Key Events Ahead
No Significant Events Scheduled
FX Beat
DXY: The dollar index, against a basket of currencies trades 0.3 percent lower at 95.63, having touched a low of 95.19 on Friday following downbeat U.S. non-farm payroll data.
EUR/USD: The euro edged up, after slumping below the 1.1200 handle on Friday. The major initially rose sharply, touching a 1-week high of 1.1252 following weaker-than-expected U.S employment report, however, it reversed course as investors viewed that Federal Reserve is still likely hike interest rates in coming months. Trading in the major is likely to remain subdued as U.S markets will remain closed in observance of the U.S. Labor Day holiday. The European currency trades 0.1 percent up at 1.1166, pulling away from a low of 1.1150 struck in the previous session. Investors attention will remain on Eurozone's Markit service PMI and retail sales figures, amid absence of relevant data from the U.S. Immediate resistance is located at 1.1204 (10-DMA), break above could take it near 1.1250. On the lower side, support is seen at 1.1150, break below could drag it till 1.1127/1.1100.
USD/JPY: The greenback declined as the Japanese traders sold - off the major in a negative reaction to the U.S. jobs report which came in below expectations. The dollar slumped to a low of 102.80 on Friday following poor U.S. non-farm payroll numbers, however, it did little to change investors' perception that the Federal Reserve is likely to raise interest rates in coming months. Data released earlier in the day showed Japan's labor cash earnings rose at an annualized rate of 1.4 percent in the month of July, surpassing expectations of 0.4 percent, which kept the bid tone around the yen intact. The major trades 0.2 percent lower at 103.61 yen, pulling away from a 1-month high of 104.31 struck in the previous session. The pair will be driven by broad-based market sentiment amid holiday-thinned trading. Immediate resistance is located at 104.00, break above targets 104.50/ 104.80. On the downside, support is seen at 103.40 (5-DMA), break below could take it lower 103.00.
GBP/USD: Sterling rose, extending gains above the 1.3300 handle, largely on the back of better-than-expected Britain's construction sector survey and weak U.S. jobs report. The major hit a 1-month high of 1.3352 on Friday, after upbeat UK construction PMI for August strengthened expectations that the economy is holding up well after the shock Brexit vote in June. Sterling trades 0.2 percent up at 1.3320, attempting to regain the 1.3350 level. Investors will closely watch UK's service PMI data and retails sales monitor figures for further cues on the pair. Immediate resistance is located at 1.3352 (Previous Session High), break above could take it near 1.3400. On the downside, support is seen at 1.3280, break below targets 1.3250. Against the euro, the pound trades flat at 83.78 pence, having touched a 1-month high of 83.75 pence, in the previous session.
AUD/USD: The Australian dollar rose above the 0.7600 handle after data pointed to robust company profits and wage growth. The major was also supported by strong China August service PMI release, which came in at 52.1, against estimates of 51.9. Data released earlier in the session showed Australia's TD securities inflation for August rising by 0.2 percent m/m and 1.2 percent y/y, versus previous -0.3 percent and 1.0 percent, respectively. Moreover, the economy's company gross operating profits advanced about 7 percent last quarter, against consensus of 2 percent, while wages and salaries grew 0.8 percent. The Aussie trades 0.5 percent higher at 0.7603, nearing a 1-week high of 0.7616 hit on Friday. Investors will continue to digest upbeat domestic data, ahead of Reserve Bank of Australia's interest rate decision on Tuesday. Immediate support is seen at 0.7560, break below could drag it near 0.7540. On the upside, resistance is located at 0.7618 (20-DMA), break above targets 0.7650.
NZD/USD: The New Zealand dollar extended gains above the 0.7300 handle on the back of strong domestic data. Data released by ANZ National Bank showed that commodity price index in August gained 3.2 percent, supported by improving dairy prices. The Kiwi trades 0.7 percent up at 0.7337, hovering towards a 1-week high of 0.7360 struck on Friday. The movements in the major will be driven overall market sentiment, ahead of Global Dairy Trade Price index due tomorrow. Immediate resistance is located at 0.7360 (Previous Session High), break above could take it near 0.7380 (2016 High)/ 0.7400. On the downside, support is seen at 0.7252 (20-DMA), break below target 0.7227/0.7200.
Equities Recap
Asian shares gained, following gains on Wall Street as markets trimmed expectations of Federal Reserve interest rate hike as early as this month after the release of downbeat U.S. employment report.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.5 percent higher in early trade.
Tokyo's Nikkei climbed 0.66 pct at 17,037.63, Australia's S&P/ASX 200 index rose 0.95 pct at 5,423.90 points and South Korea's KOSPI added 1.04 percent at 2,059.15 points.
Shanghai composite index gained 0.1 percent at 3,070.78 points, while CSI300 index was trading 0.12 percent up at 3,318.51 points.
Hong Kong’s Hang Seng was trading 1.6 percent higher at 23,654.02 points. Taiwan shares edged up 1.1 percent to 9,090.13 points.
Commodities Recap
Crude oil prices edged down in early Asian trade, as markets continue to wary over increasing global oil glut. International Brent crude oil was down 0.3 percent at $46.44 a barrel by 0404 GMT, after rising as high as $47.00 on Friday following a weak U.S. jobs report. U.S. West Texas Intermediate crude oil was nudged down 0.16 percent to $ 44.08 a barrel, hovering back towards a 3-week low of $43.03 touched last week.
Gold prices stood firm, after advancing as much as over 1 percent on Friday as weaker-than-expected U.S. jobs data slashed expectations of an imminent Federal Reserve rate hike. Spot gold was little changed at $1,323.95 per ounce by 0414 GMT, after hitting a 1-week high of $1,329.84 on Friday. U.S. gold futures were nearly flat at $1,327.40.
Treasuries Recap
The Australian government bonds slumped Monday ahead of the Reserve Bank of Australia’s (RBA) monetary policy decision. Market hopes that the central bank will hold its fire until it gets another read on inflation in late October. The yield on the benchmark 10-year Treasury note rose 5 basis points to 1.958 percent and the yield on short-term 2-year bounced 1-1/2 basis points to 1.505 percent.
The New Zealand government bonds closed modestly higher as investors covered previous short positions. The yield on the benchmark 10-year bond fell 1 basis point to 2.305 percent, the yield on 7-year note also ended 1/2 basis point lower at 2.010 percent and the yield on short-term 2-year note also dipped 1 basis point to 1.865 percent.
