Equity markets rebounded overnight, as bargain hunters bought cheapened tech stocks, the S&P500 currently up 2.0%. US 2yr treasury yields rose from 0.14% to 0.15%, while the 10yr yield rose from 0.66% to 0.71%. Following the weak 3yr auction yesterday, the 10yr also had a low bid-cover ratio, with record supply an ongoing theme. Commodities, Brent crude oil futures rose 2.3% to $40.70, copper rose 1.1%, iron ore fell 1.6% to $127.00, and gold rose 0.9%.
AUD/USD: 0.7212 – 0.7287
EUR/USD: 1.1753 – 1.1834
GBP/USD: 1.2885 – 1.3022
USD/JPY: 105.83 – 106.27
USD/CAD: 1.3150 – 1.3255
NZD/USD: 0.6621 – 0.6686
AUD/JPY: 76.28 – 77.41
AUD/NZD: 1.0882 – 1.0912
- AUD/USD stays well beyond two weeks’ low, flashed the previous day, to negate the weekly loss.
- US dollar weakness joins chatters concerning TikTok and ECB to amplify the early Wednesday’s bounce.
- Welcome prints of second-tier Aussie data, China’s inflation figures managed to counter news relating Brexit, pandemic and vaccine.
- Australia’s Consumer Inflation expectations for September will be an immediate catalyst.
Australia’s September month Consumer Inflation Expectations, prior 3.3%, can offer immediate direction while risk catalysts can keep the driver’s seat during the Asian session. Moving on, the market players will be cautious ahead of the ECB meeting and the same will be decisive for the day and this week.
10-day Simple Moving Average (SMA) near 0.7305 guards the pair’s further recovery moves towards 0.7340 and the 0.7400 round-figures. Alternatively, a 50-day SMA level of 0.7150 will add support to the quote’s downside past-0.7200 mark comprising an ascending trend line from August 03.
Event Risk Data Today
AU – September update for MI inflation expectations will be published (prior: 3.3%).
CH – The supportive credit environment, boosted by the PBOC’s accommodative policy stance, should be reflected in August’s money supply (prior and market f/c: 10.7%/yr) and new loans (prior: CNY992.7bn, market f/c: CNY1265bn) figures. Foreign investment has continued to rebound since its February/ March lows (prior: 15.8%).
EU – ECB is expected to remain on hold at its September meeting. Forecast revisions and the Council’s assessment of the balance of risks will be the focus.
NZ – August electronic retail spending will reflect the drag on spending from the mid-August lockdown, with the market is anticipating an 8.0% decrease following July’s 1.2% gain.
US – Initial jobless claims are expected to continue to trend lower in coming weeks, though a change in the seasonal adjustment methodology could create volatility. July wholesale inventories also to be released