- Australia August overall job ads +1.0% m/m, newspapers +0.8%, internet +1.0%.
- Australia August AIG/HIA PCI +6.7 points to 53.8, construction back in expansion.
- NZ Q2 wholesale sales -0.1% q/q, Q1 rev +0.7%.
- CFTC IMM CTA data – Specs cut USD longs to smallest in more than a year.
- G20 promise to avoid currency wars is feeble.
- G20 mostly non-event, griping about Fed, China.
- G20 warns against overemphasis on monetary policy, more needs to be done to hit 2% G20 growth target, no need for nervousness on China, China emphasizes stability; to up fiscal spending, US Tsy sees need to double down against devaluation.
- IMF Lagarde – Fed should not rush to hike.
- China NDRC – Economy showing signs of stabilizing.
- China ’14 GDP revised down to +7.3%, CNY63.6 bln, previous est +7.4%.
- Investors buckle up for expected drop in China FX reserves.
- Moody’s – Chinese bank will face operating pressure next 1-2 years.
- New rules press banks to sell CMBS.
- Japan end-August foreign reserves $1.24415 trln, end-July $1.242316 trln.
- Barclays markets 3/5-year samurais, pricing Thursday.
- Sweden plans mandatory mortgage repayment to cool housing market.
- (0400 ET/0800 GMT) Norway July manufacturing output, -0.9% m/m eyed; last +0.1%.
- (0430 ET/0830 GMT) Euro zone September Sentix index, 16.1 eyed; last 18.4.
Key Events Ahead
- US Labor Day holiday, markets closed.
- N/A France E3.6-4/1.2-1.6/0.9-1.2 bln 3/6/12-month BTF t-note auctions.
- N/A Netherlands E1-2 bln each 3/5-month DTC auctions.
- (1230 ET/1630 GMT) Buba VP Buch speech at Muenster conference.
FX Recap
EUR/USD is supported above 1.1100 levels and currently trading at 1.1145 levels. It has made intraday high at 1.1174 and low at 1.1141 levels. Traders in Europe will look past the upcoming week’s relatively insignificant macro and get ready for much greater gigs later in the month. The mood in global markets will be increasingly shaped by the nearing FOMC meeting. Traders mostly ignored US and EU data during the last week and focused mostly on Thursday’s statement from ECB and on Friday’s payrolls, which reinforced the case for September’s rate hike, although the figures were not stellar, but rather slightly positive. Monday was a quiet and calm session and did not bring any important figures and therefore the pair was moving only in a narrow trading range. Initial support is seen around at 1.1015 and resistance at 1.1363 levels.USD/JPY is supported above 119.00 levels and posted a high of 119.58 levels. It has made intraday low at 118.79 and currently trading at 119.33 levels. The Japanese yen traded down against its US counterpart on Monday, with safe-haven bids ditched for the more risky dollar after Chinese equity markets opened the day in positive territory. Recent market volatility in China has made Chinese markets the pace setter for global equities in recent weeks, with ongoing concerns about the health of the world’s second-biggest economy creating instability elsewhere. Initial resistance is seen at 123.20 and support is seen at 118.42 levels.
GBP/USD is supported below $1.5200 levels. It made an intraday high at 1.5202 and low at 1.5173 levels. Pair is currently trading at 1.5186 levels. The pair hovers around 1.5200; working hard to hit the positive territory amid the absence of fresh fundamental cues out of Europe. Sterling dropped against the dollar on Friday after the US NFP numbers. Today US and Canadian markets remain closed today on account of Labour Day, low volumes amid thin trading are likely to be witnessed on Monday. Initial support is seen at 1.5185 and resistance is seen around 1.5436 levels.NZDUSD is supported below 0.6300 levels and trading at 0.6274 levels and made intraday low at 0.6260 and high at 0.6300 levels. The Kiwi extends its downward spiral from Friday after the NZD/USD pair was badly hit on the back of US jobs data release. Although payrolls disappointed markets, the rest of the data were digested as favourable for the odds of an earlier rate hike by the Fed. The Kiwi fell further into losses this session, as markets continue to digest the recent economic news on both sides of the Atlantic while awaiting the crucial China trade data and the CPI report which may lead another bumpy week ahead. Moreover, Thursday’s, RBNZ cash rate statement may also be closely watched as markets widely anticipate a rate cut in order to counter the effects of the recent China fears. Initial support is seen at 0.6195 and resistance at 0.6511 levels.AUD/USD is supported below 0.7000 levels and trading at 0.6926 levels. It has made intraday high at 0.6948 levels and low at 0.6911 levels. The Australian dollar was off to a solid start on Monday, with help from signs that Australian’s construction sector expanded at the fastest pace in almost a year last month. The AiG Construction Index indicated on Monday that Australia’s construction sector expanded for the first time since March in August, with the index rising from 47.1 in July to 53.8 last month, the highest reading since September 2014. Initial support is seen at 0.6908 and resistance at 0.7122 levels.
Equity Recap
Chinese equities set the tone for other Asian markets on Monday, with most bourses in the region pushing higher in morning trade once China opened for the first time in four days.China’s extended break appeared to do the region some good, with the Shanghai Composite opening with strong gains on Monday, helping to revive its adjoining markets.Chinese markets have been the tone setters for other global markets in recent weeks due to extreme volatility as fears over the state of China’s economy deepened.Hong Kong’s benchmark Hang Seng index advanced 0.25% to 20,891.92 points within the first hour of trade, and mainland China’s benchmark Shanghai Composite rallied 1.57% to 3,209.71 points at the same time.
South Korea’s KOSPI Composite Index reached 0.45% higher to1, 894.64 points.Japan’s benchmark Nikkei225 index rallied 0.96% to 17,963.38 points, and the broader TOPIX gauge rose 0.22% to 1,447.64 points before midday in Tokyo, after each Japanese bourse started the morning more than 1% lower.Australia’s markets remained in the red but consolidated losses by midday in Sydney, with the benchmark S&P/ASX200 index trading 0.46% lower at 5,017.30 points, compared with a 1.1% loss in morning trade.Australia’s S&P/ASX 200 index closes down 0.41 pct at 5,020.00 points.
Tokyo’s Nikkei average closes up 0.38 pct at 17,860.47.
Treasury Recap
BOJ offers to lend Y400 bln of JGBs on spot basis through 9/8 as a secondary source of JGBs.South Korea sells 5-year treasury bonds at average yield of 1.875 pct.New Zealand government bonds edged up, nudging yields on most bonds 1 basis point lower.
Australian government bond futures fell, with the three-year bond contract off 3 ticks at 98.230. The 10-year contract was down 1.5 ticks to 97.3300.
Commodity Recap
Oil was traded lower on Monday amid projections that prices will remain low while supply is expected to remain strong next year. Futures for WTI dropped 1.11% to trade at $45.54 per barrel, while Brent futures were traded 0.10% higher at $49.23 per barrel.Gold struggled near a 2-1/2-week low on Monday, retaining losses from the prior three sessions, after U.S. payrolls data failed to provide clarity on the timing of a Federal Reserve rate hike. Spot gold was little changed at $1,122.75 an ounce by 0357 GMT. The metal had fallen to $1,116.75 on Friday, the lowest since Aug. 19, posting its second straight weekly loss.
The material has been provided by InstaForex Company – www.instaforex.com