Global Markets:
- Asian stock markets: Nikkei fell 0.49 %, Shanghai Composite down 0.07 %, Hang Seng dropped 0.40 %, ASX 200 down 0.86 %
- Commodities: Gold at $1321.94 (+0.50 %), Silver at $17.44 (+0.04 %), WTI Oil at $46.80 (+0.49 %), Brent Oil at $51.60 (+0.35 %)
- Rates: US 10-year yield at 2.12, UK 10-year yield at 1.05, German 10-year yield at 0.37
News & Data:
- AUD HIA New Home Sales m/m -3.7 % vs -6.9 % previous
- JPY BOJ Core CPI y/y 0.4 % vs 0.2 % expected
- CHF Employment Level (Q2) 4.910 M vs 4.884 M previous
- EUR M3 Money Supply y/y 4.5 % vs 4.9 % expected
- EUR Private Loans y/y 2.6 % vs 2-.7 % expected
- USD Goods Trade Balance (Jul) -65.1 B vs -64.5 B expected
- Dollar falls to four-month low vs. yen after North Korea fires missile- RTRS
- Flooding knocks out U.S. refineries, crude hit by supply disruptions- RTRS
Markets Update:
Asian stock markets were jolted after North Korea fired a ballistic missile test over Japan, fuelling worries of fresh tension between Washington and Pyongyang. The launch represented an “unprecedented, grave and serious threat” to Japan, said chief government spokesman Yoshihide Suga. Amidst the rising tension, Global Investors sought out havens, boosting assets such as the Japanese yen and Gold.
USDJPY is currently seen trading at 108.81 with a net loss of 0.4 percentage. Earlier in the day the Yen had risen 0.8 percent to 108.33 against the dollar, its highest since April, despite Japan’s proximity to North Korea. The reasoning behind this is that Japan is the world’s biggest creditor nation and there is an assumption that Japanese investors will repatriate funds should a crisis materialize; therefore, the Yen tends to benefit during times of geopolitical or financial stress.
EURUSD hit a 2 and a half year high of $1.1986 yesterday after European Central Bank chief Mario Draghi did not express concern about the currency’s recent rise in his speech at Jackson Hole. However, the EURO has not been as active earlier in Tuesday’s session falling a mere 0.1 percent against the USD with a small fall to under 1.1960 at one stage
AUDUSD is currently seen trading at 0.7930, earlier in the session ‘Risk off’ in the global markets was seen impacting AUD especially as it traded down from above 0.7960 to under 0.7910 before retracing to the current price. Similar to the Aussie, the NZD also traded down to lows around 0.7220 against the USD then back above 0.7250 and is currently back down near its session lows
Upcoming Events:
- 06:00 GMT – (EUR) GfK German Consumer Climate
- 06:00 GMT – (GBP) Nationwide HPI
- 06:45 GMT – (EUR) French GDP (QoQ)
- 12:30 GMT – (CAD) RMPI m/m
- 14:00 GMT – (USD) CB Consumer Confidence
- 22:40 GMT – (NZD) Building Consents (MoM)
