- Divided Fed puts Yellen on hot seat, rate call down to wire.
- Minny Fed Kocherlakota - Upping inflation target could give Fed space to combat shocks, mitigate financial risks, cost-benefit analysis needed.
- Japan August Reuters Tankan manufacturing index +17, one-year high, non-mfg +27, July +14 and +24, manufacturing index eyed at +19 in Nov, non-mfg +27, recovery post-Q2 slump.
- MoF flow data week-ended August 15 - Japanese buy net Y189.2 bln foreign stocks, Y600.3 bln bonds, Y82.3 bln bills; foreign investors sell net Y501.1 bln Japanese stocks, buy trln bonds, sell trln bills.
- Japan Post firms to seek Y1.5 trln in first-round offerings in November.
- PBOC conducts largest net weekly liquidity injection since Feb 9 week, CNY120 bln reverse repos, CNY150 bln for week, lends CNY110 bln to 14 financials, sets CNY mid-point at 6.3915, last close 6.3955.
- Australia Tsy Hockey sets new foreign investment rules.
- Australia ASIC - Banks to tighten lending criteria on home loans.
- NZ August ANZ/RM consumer confidence index 109.8, three-year low, July 113.9, economic outlook deteriorating.
- NZ July ANZ job ads +0.1% m/m, first rise in five months, +1.7% y/y, employment growth to stagnate however.
- (0330 ET/0730 GMT) Sweden July unemployment, 6.9% nsa, 7.6% sa eyed; last 8.5%, 7.4%.
- (0400 ET/0800 GMT) Norway Q2 GDP all/mainland, -0.1/+0.2% q/q eyed; last +0.2/+0.5%.
- (0430 ET/0830 GMT) UK July retail sales, +0.4% m/m, +4.4% y/y eyed; last -0.2%, +4.0%.
- (0430 ET/0830 GMT) UK July ex-fuel, 0.4% m/m, +4.3% y/y eyed; last -0.2%, +4.2%.
- (0600 ET/1000 GMT) UK August CBI industrial trends survey, orders -10 eyed; last -10.
- (0830 ET/1230 GMT) US weekly initial jobless claims, 272k eyed; last 274k.
- (0900 ET/1300 GMT) Belgium August consumer confidence index; last -6.0.
- (1000 ET/1400 GMT) US August Philly Fed business sentiment index, 7.0 eyed; last 5.7.
- (1000 ET/1400 GMT) US July leading indicators index, +0.2% m/m eyed; last +0.6%.
- (1000 ET/1400 GMT) US July exist home sales, 5.44 mln AR/-0.6% m/m eyed; last 5.49 mln/+3.2%.
Key Events Ahead
- (0245 ET/0645 GMT) SF Fed Williams text of speech at BI/BIS conference in Jakarta.
- (0430 ET/0830 GMT) Spain E2.5-3.5 bln 0.25/4.8/2.15% 2018/24/25 Bono auctions.
- (0530 ET/0930 GMT) UK DMO GBP1.5 bln 4.25% 2036 Gilt auction.
- (0700 ET/1100 GMT) Riksbank executive board meeting.
- (0730 ET/1130 GMT) ECB/Austria CB Nowotny in Vienna panel discussion.
FX Recap
EUR/USD is supported above 1.1100 levels and currently trading at 1.1135levels. It has made intraday high at 1.1148 and low at 1.1115 levels. Minutes from the Federal Reserve's (Fed) July 28-29 meeting were slightly more dovish than markets expected, with members of the monetary-policy setting committee concerned about weak inflation, raising the risk that the first interest rate hike will come later than September, the timing broadly anticipated by markets. In Europe, the outstanding note came with the final approve to Greek's bailout, as the EU countries have mandated to the ESM to make to a maximum of €86bn available to finance Greece. Initial support is seen around at 1.0789 and resistance at 1.1195 levels.
USD/JPY is supported below 124.00 levels and posted a high of 123.98 levels. It has made intraday low at 123.81 and currently trading at 123.93 levels. Pair posed a minor recovery in the mid-Asian trades, as the USD bulls jumped back into the bids mainly driven by a short-covering rally after the major dropped sharply to fresh three-week lows on Wednesday following the release of FOMC minutes which surprised the markets to the downside. US CPI for July ticked lower from 0.3% to 0.1% month-on-month, while the yearly change printed 0.2% and improved from 0.1% previously. The core gauge dropped to 0.1% from June's 0.2% m/m. Markets now await a host of US macro data due for release later tonight for further momentum on the pair. Initial resistance is seen at 125.68 and support is seen at 120.63 levels.
GBP/USD is supported just below $1.5700 levels. It made an intraday high at 1.5702 and low at 1.5676 levels. Pair is currently trading at 1.5678 levels. Broad based US dollar weakness persists in Asia, lifting most G10 currencies across the FX board. There is nothing much of relevance to be published in terms of economic news in the European session ahead with only the UK retail sales data to remain the major highlight. Rising real earnings, increased consumer confidence, and an improving labour market in the UK are expected to have helped retail sales bounce back in July. Looking ahead, we have a busy session with US weekly jobless claims, existing home sales and Philly Fed manufacturing index on the cards. Initial support is seen at 1.5413 and resistance is seen around 1.5734 levels.
NZDUSD is supported above 0.6600 levels and trading at 0.6615 levels and made intraday low at 0.6591 and high at 0.6620 levels. A weak consumer confidence index reading for August and a soft rise in job ads last month did little to weigh down the so-called kiwi on Thursday. Earlier on Thursday ANZ's Consumer Confidence index for August showed a reading of 109.8, down four points from July, and hitting a three-year low. Initial support is seen at 0.6465 and resistance at 0.6789 levels.
AUD/USD is supported above 0.7300 levels and trading at 0.7345 levels. It has made intraday high at 0.7372 levels and low at 0.7341 levels. The pair snapped the upside bias and now trades muted after Chinese stock markets opened in the red today and extends weakness fuelling concerns over lowdown in Australia's top trading partner, China. However, rising gold prices coupled with broad based USD weakness helps the Aussie to restrict the losses. Meanwhile, pair will be influenced by a slew of US economic data, including the weekly jobless claims, existing home sales and Philly Fed manufacturing index, to be released later in the US session. Initial support is seen at 0.7225 and resistance at 0.7647 levels.
Equity Recap
Japan's benchmark Nikkei 225 index fell 0.48% to 20,125.15 points within the first hour of trade, while Tokyo's broader Topix gauge moved down 0.52% to 1,639.83 points.
Hong Kong's benchmark Hang Seng index dived 1.08% to 22,923.30 points shortly after the Chinese markets opened, and mainland China's benchmark Shanghai Composite slid 0.88% to 3,760.81 points at the same time.
Korea's benchmark Kospi index fell 0.80% to 1,923.91 points on Thursday morning in Seoul.
The benchmark Australian S&P/ASX 200 index tumbled 1.21% to 5,315.10 points in Sydney, as resource and financial stocks were weighed down by a lack of risk sentiment on Thursday.
New Zealand's benchmark S&P/NZX 50 index crept 0.08% higher to 5,754.68 points this afternoon in Wellington.
Australia's S&P/ASX 200 index closes down 1.70 pct at 5,288.70 points.
Tokyo's Nikkei unofficially closes down 0.94 pct at 20,033.52.
Treasury Recap
BOJ offers to lend Y823.1 bln of JGBs on spot basis through 8/21 as a secondary source of JGBs (Offer in the morning).
Thailand 30 bln baht, 2-year central bank bond average accepted yield 1.4561 pct.
10-year US treasury yield at 2.116 percent vs US close of 2.129 percent on Wednesday.
New Zealand government bond yields were as much as 4.5 basis points lower at the long end of the curve.
A bounce in U.S. Treasury bonds underpinned Australian government bond futures. The three-year bond contract rose 6 ticks to 98.120, while the 10-year contract added 7 ticks to 97.3000.
Commodity Recap
Prices of the US crude benchmark continued to trade with losses on Thursday, after slumping to just above the $41 level on Wednesday on the back of an unexpected build in US stockpiles. October futures for WTI were traded 0.78% lower at $40.95 per barrel, while Brent futures lost 0.57% to $46.89 per barrel.
Bullion surged to its highest level in one month on Thursday as investors sold off equities and US dollars, seeking safety in the commodity after the Federal Reserve (Fed) minutes released on Wednesday signalled that the expected interest rate rise in September will probably not go ahead, moving the date further down the road. Gold futures for delivery in December were up 1.09%, trading at $1,139.40 per troy ounce in early morning trading, marking the highest level since July 17.
