Forex today stuck today to thin trading ranges in Asia this Monday, marking for a dull start to a brand new week, as investors preferred to stay on the sidelines heading into a week full of central banking action. Hence, rising Chinese inflation and upbeat Japanese growth figures failed to impress the markets.
Amongst the Asia-pac currencies, the Yen traded better bid below 111.00 versus the US dollar amid moderate risk-aversion, as worries over US tariffs on Japan and China continue to loom. Meanwhile, the Kiwi tumbled following the sell-off in the Chinese equity markets and after the latest NZIER Consensus Forecasts expected a slight downward revision to the growth outlook for the next two years. The gains in the Aussie remained capped below 0.7120 level, in the wake of ongoing EM turmoil and mixed commodities prices.
Among other related news, Sweden headed for a hung parliament after Sunday’s election that saw support for the nationalist Sweden Democrats surge, as one of Europe’s most liberal nations turned right amid fears over immigration.
Main topics in Asia
EU to give Barnier mandate to close Brexit deals – Financial Times
As reported by the Financial Times, new instructions for the European Union’s chief Brexit negotiator, Michel Barnier, are expected in soon to begin extending an olive branch to the UK’s Prime Minister, Theresa May.
China’s trade surplus with US rose to new record high in August
China’s trade surplus with the US as represented by the gap between the exports and imports rose to new record highs in August, the official data released over the weekend showed.
China’s CPI accelerates to 0.7% m/m in August, beats estimates
According to the latest data published by China’s the National Bureau of Statistics (NBS), the Chinese Consumer Price Index (MoM) (August) came in at +0.7% vs +0.5% exp and +0.3% last, while Consumer Price Index (YoY) (August) 2.3% vs 2.2% exp and 2.1% last.
Japan PM Abe: Trade fights do not benefit any country
Japanese PM Shinzo Abe was on the wires last hour, via Reuters, noting that trade fights do not benefit any country.
Japan PM Abe: Want to increase consumption tax as planned
Japan’s PM Abe is back on the wires now, via Reuters, noting that he wants to increase consumption tax as planned.
China’s State Council Committee on financial stability: To fend off “black swan” events
Reuters reports key highlights from a statement issued by China’s State Council Committee on financial stability, in light of any Black Swan events.
Italy’s EcoMin Tria: Italian bond yield spread to fall as government starts to act
Speaking at a business conference on the shores of Lake Como on Sunday, the Italian Economy Minister Giovanni Tria noted that his government plans to implement new fiscal policies to spur the economic growth “¦
RBA’s Bullock sees vulnerability from high household debt
Michele Bullock, Reserve Bank of Australia’s (RBA) Assistant Governor for Financial System is out on the wires now, via Reuters, making her scheduled speech titled “The Evolution of Household Sector Risks” at an Australian Industry Group event, in Albury.
Fed’s Rosengren: No need to quicken pace of rate hikes
Reuters is out with the latest comments from Boston Federal Reserve (Fed) President Eric Rosengren, with the key headlines “¦
EUR/SEK Technical Analysis: Downside calling, Sweden faces the risk of a hung parliament
Sweden is facing a risk of political deadlock after the far-right Sweden Democrats party put on a good show in Sunday’s elections. Still, the EUR/SEK technical chart is biased toward the bears, meaning the Swedish Krona (SEK) is likely to appreciate.
Key Focus ahead
The EUR calendar for this week remains quite eventful, with Monday kicking-off with the UK data dump, with the monthly GDP figures to be closely watched among the trade and industrial production releases. The UK July GDP, due at 0830 GMT, is expected to arrive at 0.3% versus 0.1% previous while the manufacturing numbers are seen declining across the time horizon for July. For the Euroland, the August Sentix investor confidence gauge will be reported at the same time. Besides, the FOMC member Bostic’s speech is scheduled ahead of the US open at 1200 GMT.
Meanwhile, the NA session offers nothing of relevance in terms of macro news, as Brexit and trade-related developments will continue to drive the market sentiment.
EUR/USD: Risks are skewed to the downside
For EUR/USD, the path of least resistance is to the downside. The 5-day and 10-day moving averages (MAs) are trending south, indicating a bearish setup. Meanwhile, 14-day relative strength index (RSI) has adopted a bearish bias.
GBP/USD sees Brexit hopes rising as UK GDP rounds the corner
The GBP/USD is continuing to hold steady just above the 1.2900 level after the pair wound up middling near the technical handle through last week, and renewed hopes for a passable Brexit deal are about to face down Monday’s GDP reading for the UK economy.
Gold Technical Analysis: Deeper losses likely below key support of $1,189
Gold has established a lower highs pattern, as seen in the hourly chart below, and a break below $1,189 (Sep. 4 low) would establish a lower pattern and open the doors to re-test of Aug. 18 low) and $1,160 (Aug. 16 low).
Key events for the week ahead: ECB and BoE policy decision on the cards – Nomura
Analysts at Nomura offered their outlook for this week’s key scheduled events.
Week of September 10 – In EM contagion is raging – TDS
Analysts at TD Securities, (TDS), explained that the word “contagion” is increasingly being used to explain the broad-based poor performance of EM assets.
Share
