Good Morning,
Market Headlines
Sentiment was mixed, with US equities falling (S&P500 -0.8%) but US bond yields rising. US 2yr treasury yields rose from 0.13% to 0.15%, while the 10yr yield rose from 0.64% to 0.72%. Commodities, Brent crude oil futures fell 3.2% to $42.65 (a one-month low) amid weaker demand, copper rose 3.0%, iron ore fell 1.4% to $128.90, and gold rose 0.2%.
Currencies
AUD/USD: 0.7222 – 0.7298
EUR/USD: 1.1781 – 1.1865
GBP/USD: 1.3176 – 1.3319
USD/JPY: 106.10 – 106.50
USD/CAD: 1.3043 – 1.3140
NZD/USD: 0.6668 – 0.6735
AUD/JPY: 76.73 – 77.52
AUD/NZD: 1.0826 – 1.0854
AUD Thoughts
- AUD/USD stays depressed at the week’s start, keeps late Friday's U-turn from 0.7299.
- US employment data, sluggish moves by equities and Sino-American tussle disappoint Aussie buyers off-late.
- China Trade Balance for August will be watched, US markets are off for Labor Day.
AUD/USD seesaws between 0.7280 and 0.7290 as markets in Asia kick-start the week’s trading. The aussie pair dropped the most since mid-June by the end of the last week as the US dollar bounced off a 28-month low. Also weighing on the quote could be the mixed performance by global shares and escalation in the US-China tussle. It should also be noted that mostly positive US data, versus tepid Australian numbers, had an additional say in the pair’s performance during the last week.
A 10-week-old ascending trend line around 0.7210 offers key support to the pair while 0.7300 and 0.7340 can restrict immediate upside moves. Bears are gradually entering the fields but need confirmation.
Event Risk Data Today
AU – August ANZ Job Advertisements were up 65% from the May low, but that was before the Victoria shutdown took place (prior: 16.7%).
CH - The trade surplus is expected to narrow from US$62.33bn to US$49.4bn in August. The pickup in US and global demand will continue to support exports.
GE – July Industrial Production, market expects industrial production growth to decelerate in July (prior: 8.9%, market f/c: 4.5%).
EU – September Investor Confidence has been improving throughout Q2 (prior: -13.4).
US – Markets closed Labour Day