New York Session Recap
Better than expected US economic data helped offset higher oil prices in the NY session and boosted the greenback higher against the majors. Oil jumped towards a close near $118.35 after opening the session about $1 below that. Hurricane Gustav has traders everywhere wearing their meteorologist hats and we expect the price action in oil to remain quite sticky above the $117 mark until fears about the storm's potential destruction dissipate.
In terms of US data, the durable goods report for July surprised to the upside. The guts of the report point to continued resilience in the US economy as the key non-defense capital goods ex aircraft number -- which is a proxy for capital spending -- jumped 2.6% in July after a 1.3% pop in June. This is a great hand-off for 3Q growth and is sure to see GDP estimates for the quarter propped up. This resilience in the US is occurring at a time when European economies are at serious risk of plunging into recession, to boot.
EUR/USD was lower in the early part of NY trading, falling towards a low near 1.4670. Stubbornly high oil prices helped the pair grind higher towards the latter half and the pair closed the session down about 35 points near the 1.4725 mark. GBP/USD was crushed more than 100 points on USD strength and closed near the 1.8350 area. USD/JPY traded about 70 points higher after an open near 108.80 as US stocks rose a healthy 0.8% on the day.
The highlight in the upcoming Asia session looks to be the Australian private capital expenditure data for 2Q. The market is looking for a 2.0% rebound after a -2.5% plunge in 1Q. We would expect a better than expected result to help AUD/USD extend gains towards the 100hr SMA near 0.8630/35, while a worse than anticipated print should see the pair down towards 0.8540 trendline support initially. Stay tuned!
Upcoming Economic Data Releases (Asia Session) Prior Estimate
- 8/28/2008 0:00 GMT AU Conference Board Leading Index JUN -0.10% --
- 8/28/2008 1:30 GMT AU Private Capital Expenditure 2Q -2.50% 2.00%
- 8/28/2008 1:30 GMT JN BOJ Board Member Suda to Speak in Kanazawa
- 8/28/2008 3:00 GMT NZ Money Supply M3 YoY JUL 7.40% --
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