Sample Category Title

Daily Pivots: (S1) 0.9179; (P) 0.9203; (R1) 0.9226; More....

Intraday bias in USD/CHF remains neutral at this point. On the downside, break of 0.9149 will turn focus to 0.9098 support. Break there will target further decline to 0.9017 support. On the upside, break of 0.9239/41 will target 0.9273 resistance instead.

In the bigger picture, USD/CHF is still struggling around 55 week EMA (now at 0.9178) and outlook is mixed for now. Confirmed rejection by the 55 week EMA will retain medium term bearishness. That is, larger fall from 1.0342 would resume through 0.8756 low at a later stage. However, sustained trading above 55 week EMA will tilt favor to the case of bullish reversal. Focus would then be turned to 0.9471 resistance for confirmation.

Daily Pivots: (S1) 109.42; (P) 109.79; (R1) 110.05; More...

Intraday bias in USD/JPY remains neutral for the moment as range trading continues. On the upside, break of 110.79 will resume the rebound from 108.71 to retest 111.65 high. On the downside, break of 109.10 will target 108.71 support first. Firm break there will resume the decline from 111.65 and target 38.2% retracement of 102.58 to 111.65 at 108.18 next.

In the bigger picture, medium term outlook is staying neutral with 111.71 resistance intact. The pattern from 101.18 could still extend with another falling leg. Sustained trading below 55 day EMA will bring deeper fall to 107.47 support and below. Nevertheless, strong break of 111.71 resistance will confirm completion of the corrective decline from 118.65 (2016 high). Further rise should then be seen to 114.54 and then 118.65 resistance.

Daily Pivots: (S1) 0.7299; (P) 0.7336; (R1) 0.7359; More...

AUD/USD's decline from 0.7477 extends lower. But overall, another rise is still in favor as long as 0.7279 minor support holds. Whole corrective pattern from 0.8006 might have completed at 0.7105 already. On the upside, above 0.7409 minor resistance will turn bias to the upside for 0.7477 and then 0.7530 support turned resistance. However, break of 0.7279 will dampen our bullish view and turn bias back to the downside for 0.7105 low instead.

In the bigger picture, with 0.6991 cluster support (38.2% retracement of 0.5506 to 0.8006 at 0.7051) intact, we're seeing price action form 0.8006 as a correction only. That is, up trend from 0.5506 low would resume after the correction completes. In that case, main focus will be 0.8135 key resistance (2018 high). Sustained break there will carry larger bullish implications. However, sustained break of 0.6991 will argue that the whole medium term trend has indeed reversed.

Daily Pivots: (S1) 1.2630; (P) 1.2664; (R1) 1.2727; More...

Intraday bias in USD/CAD remains neutral for the moment. Rise from 1.2005 is in progress with 1.2421 support intact. On the upside, break of 1.2760 will target a test on 1.2947 high. However, break of 1.2492 will resume the fall from 1.2947 to 1.2421 key structural support.

In the bigger picture, fall from 1.4667 is seen as the third leg of the corrective pattern from 1.4689 (2016 high). It should have completed after hitting 1.2061 (2017 low) and 50% retracement of 0.9406 to 1.4689 at 1.2048. Sustained break of 38.2% retracement of 1.4667 to 1.2005 at 1.3022 will pave the way to 61.8% retracement at 1.3650 and above. Overall, medium term outlook remains neutral at worst with 1.2048/61 support zone intact.

General trend

• Equity indices pare losses after China data [monetary easing speculation?].
• Financials trade generally lower amid the decline in 10-yr government bond yields.
• Hang Seng has pared drop; Regulatory concerns weigh on HK casino cos. [Wynn Macau drops over 30%, co’s USD bonds also decline]; Macau gaming names collectively fall after govt plans to increase direct supervision.
• Shanghai Composite ended morning trading +0.3% [Property index pared drop amid gov’t comments; Industrials rise despite weaker IP data; Weaker retail sales weigh on Consumer indices].
• Nikkei has remained modestly lower [Topix Banks, Information & Communication, Electric Appliances and Iron & Steel indices decline; Marine Transportation index gains].
• S&P ASX 200 moved lower after opening flat [Energy, Resources and Financial indices lag].

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened 0.0%.
• (AU) Australia Sept Westpac Consumer Confidence: 106.2 v 104.1 prior; M/M: +2.0% v -4.4% prior.
• (AU) Reserve Bank of Australia (RBA) offers to buy A$800M in Semi Govt Bonds v A$800M prior.

Japan

• Nikkei 225 opened -0.7%.
• 9984.JP CEO Claure: Returns in LatAm have been exceptional; Values are 'where they should be'.
• (JP) Said that Japan Securities Dealers Association (JSDA) will undergo a review of setting IPO price ranges – Nikkei.
• (JP) JAPAN JULY CORE MACHINE ORDERS M/M: 0.9% V 2.5%E; Y/Y: 11.1% V 14.8%E.
• (JP) LDP official Tanigaki to support Kishida in LDP leadership race - Japanese press.

Korea

• Kospi opened -0.1%.
• (KR) South Korea Aug Unemployment Rate: 2.8% v 3.5%e (record low).
• (KR) South Korea Fin Min Hong: Aug Jobs report shows that stable recovery is continuing; Govt will explore additional measures to curb household debt, including tighter lending rules at non-banking institutions, if needed.
• 005380.KR To again suspend production at Asan factory from Sept 15-17th due to chip supply issue.
• (KR) Japan Coast Guard reports North Korea may have fired ballistic missile.

China/Hong Kong

• Hang Seng opened -0.8%; Shanghai Composite opened -0.3%.
• Evergrande [3333.HK]: China said to have told banks that company will not pay interest that is Due on Mon, Sept 20th.
• (CN) CHINA AUG INDUSTRIAL PRODUCTION Y/Y: 5.3% V 5.8%E (SLOWEST GROWTH SINCE JULY 2020).
• (CN) CHINA AUG RETAIL SALES Y/Y: 2.5% V 7.0%E (slowest in over a year).
• (CN) China National Bureau of Statistics (NBS) Official: Reiterates major macro economic indicators are in reasonable range; foundation for economic recovery needs to be consolidated.
• (CN) CHINA AUG NEW HOMES PRICES M/M: 0.2% V 0.3% PRIOR; Y/Y: 4.2% V 4.6% PRIOR.
• (CN) CHINA PBOC CONDUCTS CNY600B V CNY600B MATURING IN 1-YEAR MEDIUM-TERM LENDING FACILITY (MLF) AT 2.95% V 2.95% PRIOR.
• (CN) CHINA AUG YTD PROPERTY INVESTMENT: 10.9% V 11.3%E.
• (CN) CHINA AUG YTD FIXED URBAN ASSETS Y/Y: 8.9% V 9.0%E.
• (CN) China Aug Surveyed Jobless Rate: 5.1% v 5.1%e.
• (CN) China PBOC Open Market Operation (OMO): Injects CNY10B in 7-day reverse repos v CNY10B in 7-day reverse repos prior; Net CNY0B v Net drain CNY0B prior.
• (CN) China Tianjin Province said to have raised interest rates for some 2nd home purchases, effective Sept 22nd.
• (CN) China Vice Commerce Min: China to roll out targeted measures for small exporters, notes factors including uncertainties in overseas demand and the global economic recovery - China Securities Journal.
• (CN) China Aug electricity consumption 760.7BkWh, +3.6% y/y.
• (CN) China PBOC sets Yuan reference rate: 6.4492 v 6.4500 prior.
• China revised land sale rules may lower prices; various large Chinese cities (including Beijing, Guangzhou and Shenzhen) have updated their land sale guidelines in order to cap land plot premiums at 15% – China Securities Journal.

North America

• (CN) US President Biden: Untrue China President Xi turned down face to face meeting.
• UPS President Price: To increase rates by 2.8% in 2022; Notes supply chains are moving more intra regional to avoid shocks; Mismatch between supply and demand to continue into 2022 - press.
• YUMC Guides Aug SSS "down mid teens y/y"; and -20% from 2019 notes increased impact of Delta variant and impact on operations; Guides Q3 adj Op -60% to -50% y/y.
• MSFT Announces $60B share buyback (2.7% of market cap); Raises dividend by 11% to $0.62 from $0.56 (indicated yield 0.83%).
• PFE Said to seek FDA vaccine approval in Nov for coronavirus injections for those aged 6 months to 5-years – FT.
• PFE Two additional cities in Japan reported a white colored floating substances was found in COVID vaccine vials before administration; vials were from the same production lot FF5357 that was reported earlier by Kamakura City in Kanagawa prefecture.

Europe

• (UK) PM Johnson laid out 2 plans to deal with COVID going into winter, including booster shots or more restrictions.
• DAI.DE CFO Wilhelm: Mercedes Q4 expected to return to a more normal level, affirms FY21 profit margin target 10-12%.

Levels as of 01:15ET

• Hang Seng -1.0%; Shanghai Composite +0.3%; Kospi +0.3%; Nikkei225 -0.4%; ASX 200 -0.2%.
• Equity Futures: S&P500 +0.2%; Nasdaq100 +0.2%, Dax +0.3%; FTSE100 -0.4%.
• EUR 1.1812-1.1801; JPY 109.75-109.54; AUD 0.7329-0.7302; NZD 0.7100-0.7074.
• Commodity Futures: Gold -0.1% at $1,805/oz; Crude Oil +0.6% at $70.91/brl; Copper +0.3% at $4.33/lb.

Market movers today

• The US Empire index is the first regional survey for September. It showed a big drop in August but came from a very high level. Consensus is a broadly flat number. Industrial production for the US is also released today and expected to show a decent gain of 0.5% m/m. US import prices may also get some attention given the high focus on inflation.
• The euro area releases industrial production as well as labour costs. It will be interesting to see if wage gains also pick up in the euro area as labour shortages are also a challenge here. European Commission President von der Leyen will hold her annual State of the Union speech at 9:00 CEST, where green transition efforts will again be in focus.
• Sweden releases Prospera inflation expectations (see below).

The 60 second overview

US CPI inflation surprised on the downside yesterday with CPI core at +0.1% m/m as used cars and public airline fares declined, the latter likely driven by the Delta variant of the coronavirus. US treasury yields dropped 6 bps to the levels we saw two weeks ago and EUR/USD increased but later corrected for the entire gain. Wall Street received the news positively opening in green an hour later as the risk of Fed hikes due to high inflation subsided.

New paper on stagflation: Despite the lower US inflation figures yesterday, we do see a rising risk of a stagflationary scenario for the global economy, in which growth slows down more than expected while underlying inflation pressures from stronger wage growth moves higher. This morning we sent out the paper Research Global - Stagflation' risks on the rise, 15 September, outlining why we could be in for a longer period of labour shortages and supply chain disruptions - and what it implies for growth, inflation and central banks.

Data out of China disappointed this morning as industrial production slowed to 5.3% in August from 6.4% in July and retail sales slowed to 2.5% from 8.5% in July. Particularly the latter falling way short of expectations and adding pressure on Chinese policymakers.

Equities: Equities in a bit of a roller coaster ride yesterday. Conflicting economic signals challenges investors but at the end of the day, US equities closed near day low with all sectors lower. Growth reversed yesterday's underperformance and small cap underperformed large cap. Healthcare, tech fared best. Despite fading risk appetite the VIX index stayed close to the 19-level where it started the day. In the US, Dow -0.8%, S&P 500 -0.6%, Nasdaq -0.5% and Russell 2000 -1.4%. News from Asia this morning rather downbeat but most markets are holding up quite well. European and US futures showing small gains.

FI: Bond yields declined on the back of weaker than expected US CPI data for August. The m/m rise in US CPI-data both headline and especially core-CPI was lower than expected and bond yields declined although the y/y CPI-data is still very high. However, yesterday's CPI-data was supportive for those believing that spike in inflation is temporary.

FX: Spot dollar will remain highly driven by equity markets in the very near term. USD/JPY followed US yields lower yesterday on the back of the CPI figures with the cross dropping from 110.1 to the 109.6 level. We still see risks to the upside for EUR/SEK, even after yesterday's inflation surprise.

Credit: Credit markets performed well yesterday where iTraxx Xover tightened almost 2bp (to 225.8bp) and Main 0.3bp (to 44.4bp). HY bonds tightened 1bp and IG was unchanged.

Nordic macro

In Sweden, Prospera releases the "big" (quarterly) inflation expectations survey. Throughout the summer months, money market 1-2-year CPIF expectations have levelled off at 1.7% while 5-year expectations rose to 1.8% in August (highest since early 2019). Although yesterday's positive inflation surprise came too late for this to affect the survey outcome, it seems reasonable to expect the broader survey to show a similar development.

Daily Pivots: (S1) 0.8523; (P) 0.8537; (R1) 0.8564; More...

Intraday bias in EUR/GBP is turned neutral with current recovery. As noted before, with 0.8668 resistance intact, larger fall from 0.9499 is probably still in progress. On the downside, break of 0.8509 will resume the fall from 0.8612 to retest 0.8448 low. On the upside, though, break of 0.8612 will resume the rise from 0.8448 to 0.8668 resistance.

In the bigger picture, price actions from 0.9499 (2020 high) are still seen as developing into a corrective pattern. Deeper fall could be seen as long as 0.8668 resistance holds, towards long term support at 0.8276. However, firm break of 0.8668 resistance would argue that a medium term bottom was already formed. Stronger rise would be seen to 0.8861 support turned resistance to confirm completion of the corrective pattern.

Daily Pivots: (S1) 1.6050; (P) 1.6095; (R1) 1.6170; More...

EUR/AUD's break of 1.6116 resistance aruges that pull back from 1.6434 has completed after defending 1.5898 structural support. Larger rise from 1.5250 is still in progress. Intraday bias is back on the upside for retesting 1.6434 first. On the downside, below 1.5991 minor support will turn bias back to 1.5898 key structural support instead.

In the bigger picture, rise from 1.5250 medium term bottom is currently seen as a correction to the down trend from 1.9799 first. Stronger rise could be seen to 38.2% retracement of 1.9799 to 1.5250 at 1.6988 next. We'd tentatively expect strong resistance from there to limit upside, at least on first attempt. Meanwhile, break of 1.5898 support will indicate that the rebound has completed. Larger down trend from 1.9799 might be ready to resume through 1.5250 low.

Daily Pivots: (S1) 1.0842; (P) 1.0874; (R1) 1.0892; More....

EUR/CHF retreated quickly after edging higher to 1.0902 and intraday bias is turned neutral again. On the upside, break of 1.0902 will resume the rise from 1.0694 to 1.0985 resistance next. However, on the downside, break of 1.0833 support will turn bias back to the downside for retesting 1.0694 low instead.

In the bigger picture, rebound from 1.0505 (2020 low) should have completed at 1.1149 already. The three-wave corrective structure argues that the downtrend from 1.2004 (2018 high) is not over yet. Medium term outlook will now stay bearish as long as 55 week EMA (now at 1.0858) holds. Break of 1.0505 low would be seen at a later stage. However, sustained trading above 55 week EMA will bring retest of 1.1149 high instead.

Daily Pivots: (S1) 129.17; (P) 129.68; (R1) 130.00; More....

EUR/JPY's fall from 130.73 resumes by taking out 129.57 and intraday bias is back on the downside. Rebound from 127.91 has possibly completed. Deeper fall would be seen to retest this low. Break there will resume the whole decline form 134.11 to 127.07 key resistance turned support. On the upside, above 130.18 minor resistance will turn bias back to the upside for 130.73 instead.

In the bigger picture, rise from 114.42 is seen as a medium term rising leg inside a long term sideway pattern. As long as 127.07 resistance turned support holds, further rise is still expected to retest 137.49 (2018 high). However, firm break of 127.07 will argue that the medium term trend has reversed, deeper fall would be seen to 61.8% retracement of 114.42 to 134.11 at 121.94.