- Japan Govt official - Recent FX moves rapid, no plan for emergency MoF-BoJ-FSA meeting now but possible if needed.
- Fin Min Aso - Recent JPY moves "rough", undesirable, in close contact with US FX officials on FX moves, no talk now of coordinated market action, latest market rout different from Lehman collapse.
- Econ Min Amari - JPY being bought as safe-haven, investors view Japan as fundamentally sound, Chinese stocks were in bubble, adjustment expected.
- Goldman Sachs- Global economy not at risk of recession despite China weakness.
- China slowdown presents world with triple risk.
- Atlanta Fed Lockhart - Rate hike to begin sometime this year, normalization to be gradual, not 25 bps at each FOMC meeting, rates to remain low for some time, stronger USD-lower CNY-oil price drop complicates growth forecasts.
- Australia Tsy Hockey - Calls for market calm, confident no global crisis, Australia fundamentals still good.
- NZ PM Key - Housing investors should brace for interest rate rises.
- RBNZ - NZ average one-year inflation expectations 1.46%, two-year 1.94%.
- (0315 ET/0715 GMT) Switzerland Q2 non-farm payrolls; last 4.23 mln.
- (0330 ET/0730 GMT) Sweden July PPI; last -1.1% m/m, +0.5% y/y.
- (0400 ET/0800 GMT) Germany August IFO business climate index, 107.7 eyed; last 108.0.
- (0400 ET/0800 GMT) Germany August IFO expectations index, 102.0 eyed; last 102.4.
- (0400 ET/0800 GMT) Germany August IFO current conditions index, 113.9 eyed; last 113.9.
- (0900 ET/1300 GMT) Belgium August leading indicator, -3.5 eyed; last -4.1.
- (0900 ET/1300 GMT) US June CaseShiller 20, +0.1% m/m, +5.1% y/y sa eyed; last -0.2%, +4.9%.
- (0900 ET/1300 GMT) US June monthly home prices; last +0.4% m/m, +5.7% y/y, index 222.80.
- (0945 ET/1345 GMT) US August Markit PMI services flash, 56.0 eyed.
- (1000 ET/1400 GMT) US August consumer confidence index, 93.4 eyed; last 90.9.
- (1000 ET/1400 GMT) US July new home sales, 510k units AR, +5.8% m/m eyed; last 480k, -6.8%.
- (1000 ET/1400 GMT) US August Rich Fed mfg shipments/services/composite indices; last 16/32/13.
Key Events Ahead
- N/A Spain 3 and 9-month treasury bill auctions.
- (0300 ET/0700 GMT) Riksbank executive board meeting.
- (0530 ET/0930 GMT) ECB 7-day refinance at fixed 0.05%, E69.6 bln allotment eyed, last E69.6 bln.
- (0640 ET/1040 GMT) ECB VP Constancio speech at Mannheim EEA Congress (to Aug 27).
- N/A BoC DepGov Schembri speech at Kingston conference.
- (1000 ET/1400 GMT) US CBO '15-25 budget and economic outlook update.
FX Recap
EUR/USD is supported above 1.1500 levels and currently trading at 1.1550 levels. It has made intraday high at 1.1604 and low at 1.1525 levels. The USD bulls jumped back in to the bids in the Asian session, pushing the pair lower on the 1.15 handle, after the greenback was hammered to seven month lows versus the euro on Monday after markets went wild following China 's stocks turmoil which sparked risk-aversion across the board. The US dollar tries hard to recover from yesterday's deep wound after market changed to the safe-haven appeal in the euro amid widespread panic that China's stock market crash would tank the global economy swept across financial markets. Today German GDP as well as IFO business climate data will be in focus in the European session. Initial support is seen around at 1.1308 and resistance at 1.1714 levels.
USD/JPY is supported below 120.00 levels and posted a high of 120.10 levels. It has made intraday low at 118.25 and currently trading at 119.52 levels. The safety which is often associated with the Japanese yen was in low demand on Tuesday, prompting a partial rebound in the US dollar after the currency fell more than 2% on Monday. The US dollar rallied against the Japanese yen on Tuesday morning in Tokyo, signalling that investors have a renewed taste for risk after a sharp downturn in markets on Monday. Initial resistance is seen at 123.20 and support is seen at 118.42 levels.
GBP/USD is supported above $1.5700 levels. It made an intraday high at 1.5775 and low at 1.5747 levels. Pair is currently trading at 1.5770 levels. The UK pound rose to a two-month high versus the US dollar on Monday, as traders sold off the greenback across the board amid declining chances of a September rate hike. Sterling is sensitive to the events in China, as it impacts commodity prices and could potentially hurt the UK's mining and energy sector. Traders will be focusing on the release of preliminary (2nd) Q2 GDP in the UK as well as BoE Governor Mark Carney's speech at Jackson Hole. Initial support is seen at 1.5413 and resistance is seen around 1.5802 levels.
NZDUSD is supported around 0.6500 levels and trading at 0.6497 levels and made intraday low at 0.6440 and high at 0.6539 levels. The so-called kiwi crumbled further on Tuesday after 'black' Monday left the commodity-based currency trading at its weakest in six years, when markets panicked over the deteriorating situation in China, New Zealand's biggest export market. New Zealand's economy has been shaken by China over the last two years as weaker Chinese demand for dairy products has sent global dairy prices into free-fall, making dairy production - New Zealand's biggest commodity export earner - unprofitable for many farmers. Initial support is seen at 0.6435 and resistance at 0.6789 levels.
AUD/USD is supported below 0.7200 levels and trading at 0.7190 levels. It has made intraday high at 0.7232 levels and low at 0.7133 levels. The commodity-based Aussie rebounded from a 2009-low on Tuesday, with gains in oil prices and a return of risk sentiment helping to support the currency. Brent crude futures rose 0.68% to $42.73 per barrel on Tuesday as oil markets opened for the day, while WTI futures gained 0.60% to $38.29 per barrel. However, equity markets remained in the doldrums on Tuesday, with the benchmark Australian S&P/ASX200 sliding 0.37% to 4,982.70 points. Initial support is seen at 0.7110 and resistance at 0.7385 levels.
Equity Recap
Mainland China's benchmark Shanghai Composite tumbled 3.2% to 3,106.71 points on Tuesday morning, adding to yesterday's 8.4% slump, but Hong Kong's benchmark Hang Seng index rallied 2.08% to 21,693.38 points.
Japan's benchmark Nikkei 225 index rose 0.86% to 18,701.00 points, while Tokyo's broader Topix gauge jumped 1.86% to 1,505.05 points.
Korea's benchmark Kospi index jumped 1.38% to 1,855.12 points in Seoul and the benchmark Australian S&P/ASX 200 index climbed 2.82% to 5,147.20 points in Sydney.
New Zealand's benchmark S&P/NZX 50 index was down 0.33% at 5,588.65 points this afternoon in Wellington, paring earlier losses which had the index down more than 1%.
Australia's benchmark S&P/ASX 200 index traded 1.23% higher at 5,062.90 points in Sydney.
Australia's S&P/ASX 200 index closes up 2.39 pct at 5,121.00 points.
Tokyo's Nikkei average closes down 3.96 pct at 17,806.70.
Treasury Recap
Malaysia is going to sell 3.0 bln Ringgit Govt bond.
Thailand 30.6 bln baht, 91-day central bank bond average accepted yield 1.42325 pct. Thailand 28.8 bln baht, 182-day central bank bond average accepted yield 1.44096 pct.
New Zealand government bonds eased, nudging yields 2 basis points higher at the long end of the curve.
Australian government bond futures retreated from four-month highs, with the three-year bond contract off 5 ticks at 98.240. The 10-year contract was down 10 ticks to 97.3750, leading to a bearish steepening of the curve.
Commodity Recap
Gold hovered below a seven-week high on Tuesday as equity markets and the U.S. dollar rebounded from a brutal selloff in the prior session that was fuelled by fears over the fate of the Chinese economy. Spot gold was flat at $1,154.60 an ounce by 0240 GMT. It closed a tad lower on Monday after a five-day rally that lifted it to $1,168.40 on Friday, its loftiest since July 7.
Oil was trading higher on Tuesday, after falling steeply a session before, but still remains near its lowest levels since 2009. Traders now await the weekly inventory report. Futures for WTI added 1.23% to trade at $38.71 per barrel, while Brent futures advanced 0.77% to $43.02 per barrel.
