9 Aug: Stocks rally as fears of a currency war ease. RBA/ Lowe, China CPI in focus. UK GDP, US PPI later.

By | August 9, 2019

 

A news headline has just come up, suggesting that the US is going to delay a Huawei licence  in response to China stopping crop buying and has seen an instant move to safe-haven ground, with the Jpy spiking higher and the Aud$ dropping by 20 points. More to come on this I guess.

The main action was once again in the stock markets on Thursday, with global stocks ending up by around 2% after China’s PBOC fixed the Yuan slightly higher than had been expected, easing concerns that the trade fight between the two countries was about to move into an all-out currency war. The FX markets themselves were mixed, without any big moves in the major currencies although the Aud$ and the Nzd$ continue to recover from Wednesday’s sharp selloff. US Bond yields have stabilised and ended the day largely unchanged, as have the metals, while WTI rallied by around 1.4% on the back of yesterday’s upbeat Chinese trade data and the appreciation of the Yuan at the PBOC Fix.

Looking ahead, Friday will kick off with the NZ Visitor Arrivals, Japan Q2 GDP and a big session for Australia which will include the RBA Monetary Policy Statement and RBA Governor Lowe testifying to the Senate Finance Committee, as well as the China CPI/PPI for July (CPI, exp 0.2%mm, 2.7%yy; PPI, exp -0.1%yy) and the Chinese New Loans. From Europe comes the German, German Trade Balance and Current Account (exp Imports + 0.3%, Exports -0.1%), the UK Q2 GDP (exp 0.00%qq), Manufacturing/Industrial Production, NIESR GDP Estimate, Trade Balance and Goods Trade Balance, while from the US, we have inflation data in the form of the July PPI (exp 0.2%mm, 1.7%yy). Have a good weekend.

Economic data highlights will include:

Fri: NZ Visitor Arrivals, Japan Q2 GDP, RBA Monetary Policy Statement, China CPI/PPI, New Loans, German Trade Balance, UK Q2 GDP, Manufacturing/Industrial Production, NIESR GDP Estimate, Trade Balance, Goods Trade Balance, RBA Governor Lowe Speech, US PPI,

Market moves, in brief:         

FX: DXY 97.64 (+0.03%)

Bonds: US10Y; 1.72% (-0.44%), German 10Y; -0.561% (+3.85%), UK 10Y; +0.53% (+10.78%), Australian 10Y; 0.987% (+1.58%), NZ 10Y; 1.110% (-5.13 %), China 10Y; 3.060% (+0.38%)

Stock Indices: DJI; +1.43%, S+P; +1.88%, NASDAQ; +2.24%, EUStoxx50; +1.98%, FTSE100; +1.21%, Shanghai Composite; +0.93%,

Metals: Gold $1500 oz (-0.02%), Silver $16.92 oz (-1.06%), Copper $2.6075 lb (+1.42%), Iron Ore $97.37 per tonne (NYMEX) (+1.21%),

Oil: WTI $52.86 pb (+1.24%)

CURRENCIES
EURUSD: 1.1181
Res  1.1195  1.1210  1.1225
Sup  1.1170  1.1155  1.1140
USDJPY: 106.06
Res  106.25  106.45  106.70
Sup  105.85  105.60  105.25
GBPUSD: 1.2138
Res  1.2180  1.2215  1.2255
Sup  1.2110  1.2080  1.2040
USDCHF: 0.9748
Res  0.9770  0.9790  0.9805
Sup  0.9730  0.9710  0.9695
AUDUSD: 0.6780
Res  0.6820  0.6840  0.6860
Sup  0.6770  0.6750  0.6730
NZDUSD: 0.6480
Res  0.6495  0.6520  0.6545
Sup  0.6455  0.6430  0.6405
INDICES / COMMODITIES
S&P.fs: 2940.03
Res  2950.00  2960.00  2970.00
Sup  2925.00  2910.00  2895.00
DJ30.fs: 26368.00
Res  26450.00  26535.00  26655.00
Sup  26265.00  26165.00  26045.00
SPI200.fs: 6522
Res  6525  6550  6580
Sup  6495  6475  6450
XAUUSD: 1501.27
Res  1510.00  1540.00  1525.00
Sup  1490.00  1475.00  1460.00
XAGUSD: 16.93
Res  17.10  17.25  17.40
Sup  16.80  16.65  16.50
WTI.fs: 52.91
Res  53.50  54.00  54.55
Sup  52.35  51.80  51.30

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