Asia was a relatively eventful affair today, with a couple of second-liner macro news reported from the OZ economies. New Zealand’s Q2 retail sales jumped beyond expectations and bolstered the recent upbeat momentum in the Kiwi. However, the Aussie failed to benefit from upbeat Australian construction output data, as the Australian political jitters continued to weigh on the domestic currency.
Meanwhile, the USD/JPY pair moved higher and tested the 110.50 levels, despite a broadly subdued US dollar and negative Treasury yields, as higher oil prices and Japanese equities underpinned. Both the EUR and pound remained poised to extend their corrective upside, although the bulls lacked vigor ahead of the key FOMC minutes release due later today.
The Canadian dollar and Mexican Peso lost ground following the denial of the existence of the NAFTA deal with the US. The latest report by Bloomberg cited that the US and Mexico are said to move closer to the NAFTA framework, although some hurdles still remain.
Main topics in Asia
NZ retail sales bump defies gloomy RBNZ – TDS
Analysts at TD Securities explained that New Zealand real retail sales jumped by +1.1%/q, smashing even the most optimistic +0.8%/q forecast (mkt +0.3%/q).
Australian ForeignMin: PM Turnbull rejects Cabinet resignations as new challenge looms
Reuters cited Australian Foreign Minister Julie Bishop on Wednesday, as saying that PM Malcolm Turnbull rejected the resignations of seven Cabinet members who backed a rival for leadership.
Global trade war to hold back modest Eurozone growth – Reuters poll
According to the latest Reuters poll of economists on the Eurozone economic outlook, a majority of them sees a modest slowdown in the economic growth this year when compared to that seen in 2017, in light of a brewing US-led trade war.
Trump: We are going to put a 25% tariff on every car from the European Union
CNBC reported the key comment delivered by the US President Trump at a campaign rally in West Virginia on late-Tuesday, where he noted: “We are going to put a 25% tariff on every car from the European Union”.
US to announce ‘handshake’ NAFTA deal with Mexico on Thursday – Politico
Politico cited three sources close to the talks, as saying that the White House is scheduled to announce that the US and Mexico, which have been meeting together for the last several weeks “¦
Australian PM Turnbull: Not anticipating another leadership challenge this week
More comments flowing in from the Australian PM Turnbull, via Reuters, as he now speaks on the recent political issue.
RBA’s Debelle: Current accommodative stance of MonPol to assist inflation to sustain at the target
The Reserve Bank of Australia (RBA) Assistant Governor Debelle is on the wires now, via Reuters, making a scheduled speech titled “Low Inflation” at the Economic Society of Australia Business Luncheon, in Brisbane.
Canada and Mexico deny existence of the handshake NAFTA deal with the US
The Canadian and Mexican government officials came out on the wires last hour, denying the existence of the handshake NAFTA deal with the US.
Key Focus ahead
This week continues to remain data-scare, especially for the European session, and today remains no different. Hence, the USD dynamics and risk trends ahead of the US-China talks will continue to remain the key market drivers.
The NA session, in contrast, has a plenty of event risks, with the highlight being the FOMC monetary policy meeting minutes due at 1800 GMT. The minutes will hog the limelight, in light of the latest Trump’s Fed criticism and the US dollar sell-off.
On the data front, the Canadian retail sales report will be published at 1230 GMT, followed by the US existing home sales data due at 1400 GMT. Also, in focus will be the US crude stockpiles report that will be published by the Energy Information Administration (EIA) later today at 1430 GMT.
EUR/USD: Key trendline hurdle could remain intact on Cohen’s guilty plea and trade war fears
The four-day rally in the common currency has brought the EUR/USD close to 1.1610 – a level which marks the confluence of the 50-day moving average (MA) and trendline sloping downwards from the April 19 high and July 31 high.
GBP/USD consolidates above 1.2900, eyes Fed minutes for fresh impetus
Having hit fresh nine-day tops at 1.2925 in the US last session, the GBP/USD pair entered into a consolidative mode ahead of the 1.29 handle in Asia, as the bulls now look forward to the US housing data and FOMC minutes for the next push higher.
How to trade Canada’s Retail Sales with USD/CAD
Retail sales are critical to the Canadian economy and the publication always moves the Loonie. The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
FOMC Minutes preview: Powell vs. Trump, the ultimate battle
Minutes of the US Federal Reserve meeting that took place at the beginning of August will be out this Wednesday and may have passed unnoticed if it weren’t by a new attack from US President Trump to the Fed’s monetary policy.
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