Stock markets have given up some ground on Tuesday, following 3 days of decent gains, as traders began to square up ahead of Jackson Hole on Thursday/Friday. The US$ is a little softer against the other majors as Treasury yields retreated after yesterday’s risk-on rebound petered out amid doubts about how effective Chinese, German and other stimulus plans might be to prop up the slowing economy. Sterling was particularly volatile, initially under some downside pressure after comments from the EU’s Donald Tusk ruled out any change to the existing Brexit deal, Cable then bounced strongly as it latched onto the slimmest of hopes that an Irish backstop might be avoided due to modestly conciliatory Merkel comments. The move in Sterling helped the Euro out, which at one stage looked as though it could move lower after the Italian PM resigned, blaming the Interior Minister, Salvini, and the coalition for sinking the government. Despite the news, the FX markets have generally traded within a relatively tight range, while waiting on Jackson Hole to commence, although the DXY has given up a little ground, currently at 98.17.
In other markets, the metals regained the lost ground of the previous session, while oil was choppy but ended the day pretty much unchanged.
Wednesday will again be rather thin for meaningful market moving data, at least until the release of the FOMC Minutes which may cause a reaction although I think most will now be waiting to see what Jerome Powell has to say on Friday before committing themselves too deeply. Ahead of that there is precious little to excite traders who, by and large, are sitting on their hands while waiting for Jackson Hole to get under way, but points of note today will include the NZ Credit Card Spending and the Australian WBC Leading Index for July. That is about is until the US get going, with little to come from Europe (UK Public Sector Net Borrowing Requirements ), with the Existing Home Sales for July (exp 5.4 mio, +2.5%) and which will be followed by the Fed Minutes. Have a good day.
Economic data highlights will include:
Wed: WBC Leading Index, NZ Credit Card Spending, UK Public Sector Net Borrowing Requirements, US Existing Home Sales, EIA Crude Oil Stocks Weekly Change, FOMC Minutes,
Market moves, in brief:
FX: DXY 98.17 (-0.19%)
Bonds: US10Y; 1.553% (-3.37%), German 10Y; -0.690% (-6.49%), UK 10Y; 0.454% (-5.97%), Australian 10Y; 0.947% (+2.47%), NZ 10Y; 1.075% (+2.87 %), China 10Y; 3.058% (+0.14%)
Stock Indices: DJI; xxxx%, S+P; xx%, NASDAQ; xxxx%, EUStoxx50; xxxx%, FTSE100; xxxx%, Shanghai Composite; xxxx%,
Metals: Gold $1507 oz (+0.78%), Silver $17.16 oz (+1.73%), Copper $2.5745 lb (-1.04%), Iron Ore $94.02 per tonne (NYMEX) (-0.36%),
Oil: WTI $56.11 pb (+0.02%)
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