Global Markets:
- Asian stock markets: Nikkei down 2.35 %, Shanghai Composite lost 3.05 %, Hang Seng fell 2.60 %, ASX declined 2.00 %
- Commodities: Gold at $1164 (+0.90 %), Silver at $15.61 (+0.60 %), WTI Oil at $40.90 (-1.00 %), Brent Oil at $46.20 (+0.25 %)
- Rates: US 10 year yield at 2.06, UK 10 year yield at 1.75, German 10 year yield at 0.58
News & Data:
- China Caixin Manufacturing PMI (Aug, F): 47.1 (exp 48.2 prev 47.8)
- Japan Nikkei Manufacturing PMI (Aug, F): 51.9 (prev 51.2)
- PBOC Fixes Yuan Reference Rate At 6.3864 (prev 6.3915)
- Hon Kong Fin Sec Chan: China Won’t Devalue Yuan Much Further — SCMP
- Stocks, oil tumble as grim China PMI sparks growth fears – RTRS
- Oil on track for longest weekly losing streak in 29 years – RTRS
- Japan August flash manufacturing PMI shows fastest expansion in seven months – RTRS
- China Stocks Sink in Worst Weekly Rout Since 2011 Amid Outflows – BBG
Markets Update:
The US Dollar extended losses overnight. Yesterday’s data releases out of the US were solid, but the dovish FOMC minutes from Wednesday started weighing on the currency. EUR/USD rallied to 1.1292 as shorts were squeezed and stops above 1.12 & 1.1250 cleared. The next major resistance level now lies at 1.1430, with intraday support at 1.1220 and 1.1180. GBP/USD has lost its upside momentum and remains stuck in a range. However, the Pound is still well bid and test of at least 1.5780 seems likely.
USD/JPY did not find any meaningful support at 123.00, broke below and eventually reached a low of 122.79. Next support seen at the June low of 121.92. Meanwhile, the commodity currencies remain largely unchanged. While the broad USD weakness is preventing any sharp declines, weak commodities prices are keeping the currencies under pressure.
Metals are having an excellent day, thanks to the weak Dollar. Gold had three consecutive up days and rallied from $1116 to $1168. The move in Silver has been a bit less impressive, but still, it managed to break above the previous monthly high at 15.60 and extended gains to 15.70.
Upcoming Events:
- 07:00 BST – German Gfk Consumer Climate
- 08:00 BST – French Manufacturing PMI
- 08:00 BST – French Services PMI
- 08:30 BST – German Manufacturing PMI
- 08:30 BST – German Services PMI
- 09:00 BST – Euro Zone Manufacturing PMI
- 09:00 BST – Euro Zone Services PMI
- 13:30 BST – Canadian Retail Sales
- 13:30 BST – Canadian CPI
- 14:45 BST – US Manufacturing PMI
