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In focus today

The focus in the Nordics for today will be the Q2 GDP report from Sweden due at 08.00 CET. The unofficial GDP indicator showed a 0.8% q/q drop in GDP, however, that seems a tad excessive to us and we would not be surprised if today's release indicates slightly less negative growth. We will also get retail sales and the August consumer confidence survey today.

Today, we also get August flash inflation prints for Spain and Germany, which will make us much wiser in terms of what to expect from the euro area figure tomorrow.

Overnight, we get a pile of Japanese data with July retail sales and August Tokyo inflation as the most interesting. We got the first uplifting data on private spending in a very long time with the Q2 national accounts. Whether wage growth has translated into spending growth is key for the reflation outlook in Japan.

Economic and market news

What happened overnight

The long-awaited Nvidia earnings beat expectations but not by as much as previously, and markets have been jittery overnight with Asian equities dragged down by tech stocks as investors cool expectations of AI demand.

What happened yesterday

In geopolitics, the Kremlin said it would continue its operations in Ukraine after President Zelenskiy said he was preparing to present a peace plan to the US government yesterday.

In Libya, more oil fields were reported to have halted production after the announcement two days ago by the East Libyan government that it would do so. Yet oil prices trended lower during the day as markets weighed the prospects of lower economic activity and, thus, demand.

Equities: Global equities were lower yesterday, primarily dragged down by the US and large-cap tech sectors ahead of Nvidia's results, which were posted after the cash close. With no significant catalyst and tech stocks having already had more than 25% p/e expansion this year based on 2024 earnings projections, some profit-taking should be expected. It is also important to recall that tech experienced the largest multiple expansion last year, which leaves very little room for companies in this sector to disappoint without experiencing a sharply negative share price reaction. In the US yesterday, Dow -0.4%, S&P 500 -0.6%, Nasdaq -1.1%, and Russell 2000 -0.7%. Asian markets are broadly lower this morning, with focus on US futures, particularly the tech-heavy futures in the US, which are lower as Nvidia's results failed to impress investors. European futures are mixed this morning.

FI: Yields were 2-3bp lower across jurisdictions with the outperformance in the long end of the curve, however the day was split into two segments. Yields were on a steady decline until late lunchtime from where rates sold off slightly when 5y Austria and 10y EIB syndication were priced, as well as the decision from Austria not to tap the ultra-long dated 2086-bond. After that it was more sideways trading. German Bund-asset swaps were trading close to the 28.5bp mark yesterday.

FX: Yesterday was yet another quiet day in FX markets where the most notable moves were the modest strengthening of the USD and the CEEs alongside the EUR trading heavy. Both SEK and NOK did better than the EUR but posted marginal declines vs the greenback.

Daily Pivots: (S1) 1.1087; (P) 1.1138; (R1) 1.1170; More....

Intraday bias in EUR/USD remains neutral for consolidations below 1.1200. Downside of retreat should be contained above 1.1007 resistance turned support. On the upside, break of 1.1200 will resume recent rally to 161.8% projection of 1.0665 to 1.0947 from 1.0776 at 1.1232, and then 1.1274 high.

In the bigger picture, break of 1.1138 resistance indicates that corrective pattern from 1.1274 has completed at 1.0665 already. Decisive break of 1.1274 (2023 high) will confirm whole up trend from 0.9534 (2022 low). Next target will be 61.8% projection of 0.9534 to 1.1274 from 1.0665 at 1.1740. This will now be the favored case as long as 1.0947 resistance turned support holds.

Daily Pivots: (S1) 1.3151; (P) 1.3208; (R1) 1.3249; More...

Intraday bias in GBP/USD remains neutral as consolidations continues below 1.3265. Downside of retreat should be contained well above 1.3043 resistance turned support to bring rebound. On the upside, above 1.3265 will resume larger up trend to 100% projection of 1.2298 to 1.3043 from 1.2664 at 1.3409.

In the bigger picture, up trend from 1.0351 (2022 low) is resuming. Next target is 38.2% projection of 1.0351 to 1.3141 from 1.2298 at 1.3364. For now, outlook will stay bullish as long as 1.2664 support holds, even in case of deep pullback.

Daily Pivots: (S1) 0.8401; (P) 0.8431; (R1) 0.8452; More…..

USD/CHF's fall from 0.9223 is in progress. Intraday bias stays on the downside for 61.8% projection of 0.9049 to 0.8431 from 0.8747 at 0.8365, and then 0.8332 low. On the upside, above 0.8484 minor resistance will turn intraday bias neutral. But outlook will remain bearish as long as 0.8747 resistance holds, in case of recovery.

In the bigger picture, price actions from 0.8332 (2023 low) are currently seen as a medium term corrective pattern, with fall from 0.9223 as the second leg. Strong support could be seen from 0.8332 to bring rebound. Yet, overall outlook will continue to stay bearish as long as 0.9243 resistance holds. Firm break of 0.8332, however, will resume larger down trend from 1.0146 (2022 high).

Daily Pivots: (S1) 143.84; (P) 144.44; (R1) 145.19; More...

No change in USD/JPY's outlook. Further decline is still in favor in USD/JPY with 146.47 resistance intact, to retest 141.67 low. Firm break there will resume the whole fall from 161.94 to 140.25 support next. On the upside, above 146.47 minor resistance will turn intraday bias back to the upside for 149.35 resistance instead.

In the bigger picture, fall from 161.94 medium term top is seen as correcting whole up trend from 102.58 (2021 low). Deeper decline could be seen to 38.2% retracement of 102.58 to 161.94 at 139.26, which is close to 140.25 support. In any case, risk will stay on the downside as long as 55 W EMA (now at 149.38) holds. Nevertheless, firm break of 55 W EMA will suggest that the range for medium term corrective pattern is already set.

Daily Pivots: (S1) 0.6762; (P) 0.6788; (R1) 0.6810; More...

Intraday bias in AUD/USD stays on the upside at this point, despite some loss of momentum. Current rally should target 0.6870 resistance. Firm break there will target 100% projection of 0.6269 to 0.6870 from 0.6348 at 0.6949. Near term outlook will stay bullish as long as 0.6696 support holds, in case of retreat.

In the bigger picture, overall, price actions from 0.6169 (2022 low) are seen as a medium term corrective pattern, with rise from 0.6269 as the third leg. Firm break of 0.6798/6870 resistance zone will target 0.7156 resistance. In case of another fall, strong support should be seen from 0.6169/6361 to bring rebound.

Daily Pivots: (S1) 1.3452; (P) 1.3470; (R1) 1.3499; More...

A temporary low is in place at 1.3439 with current recovery and intraday bias in USD/CAD is turned neutral first. Upside of recovery should be limited below 1.3617 resistance to bring another fall. On the downside, below 1.3439 will resume the decline from 1.3946 and target 1.3176 support next.

In the bigger picture, current development suggests that corrective pattern from 1.3976 (2022 high) is extending with another falling leg. While deeper decline could be seen, strong support should emerge above 1.2947 resistance turned support to bring rebound. Rise from 1.2005 (2021 low) is still in favor to resume at a later stage.

Daily Pivots: (S1) 190.24; (P) 190.85; (R1) 191.33; More...

GBP/JPY is still bounded in consolidation below 191.99 and intraday bias remains neutral for the moment. On the upside, above 191.99 will target 61.8% retracement of 208.09 to 180.00 at 197.35, as the second leg of the corrective pattern from 208.09. On the downside, however, firm break of 187.84 support will argue that rebound from 180.00 has completed, and turn bias back to the downside for retesting 180.00 instead.

In the bigger picture, price actions from 208.09 are seen as a correction to whole rally from 123.94 (2020 low). Current development suggests that the first leg has completed and the range of medium term consolidation should be set between 38.2% retracement of 123.94 to 208.09 at 175.94 and 208.09.

Daily Pivots: (S1) 160.36; (P) 160.87; (R1) 161.29; More....

EUR/JPY is still bounded in consolidations below 163.86 and intraday bias stays neutral. On the upside, break of 163.86 will target 61.8% retracement of 175.41 to 154.40 at 167.38, as the second leg of the corrective pattern from 175.41. On the downside, however, firm break of 159.80 support will suggest that the rebound from 154.40 has completed, and turn bias back to the downside for 154.40 instead.

In the bigger picture, price actions from 175.41 are seen as correction to rally from 114.42 (2020 low). Current development suggests that the first leg has completed. The range of consolidation should be seen between 38.2% retracement of 114.42 to 175.41 at 152.11 and 175.41 high.

Daily Pivots: (S1) 0.8413; (P) 0.8427; (R1) 0.8445; More....

Intraday bias in EUR/GBP remains on the downside as fall from 0.8624 is in progress for retesting 0.8382 low. Strong support could be seen from there to bring rebound on first attempt. Above 0.8474 minor resistance will turn intraday bias neutral first. But risk will stay on the downside as long as 55 D EMA (now at 0.8492) holds. Firm break of 0.8382 will confirm larger down trend resumption.

In the bigger picture, while the rebound from 0.8382 is strong, there is no confirmation of trend reversal yet. As long as 0.8643 resistance holds, down trend from 0.9267 could still resume through 0.8382 at a later stage towards 0.8201 (2022 low). However, firm break of 0.8643 will indicate that such down trend has completed, and turn outlook bullish for 0.8764 resistance next.