• BoJ Gov Kuroda – JPY appreciation temporary, export weakness too, inflation
target achievable despite oil price drop, wages up, labor market tightening,
clear price increases since April, QQE having desired effects, to continue
policy, many options, ready to adjust policy either way, Fed rate hike would
signal confidence in US recovery, positive for global economy, China growth
losing momentum but 6-7% growth still possible, market too negative on China,
impact on Japan exports minimal? – Reuters.
• MoF flow data week-ended Aug 22 – Japanese buy net Y258.1 bln foreign stocks,
sell Y273.8 bln bonds, buy Y79.9 bln bills; foreign investors sell net Y461.9
bln Japanese stocks, Y5.3 bln bonds, buy Y179.4 bln bills.
• Japan July crude oil imports +9.0% y/y.
• Nippon Life in talks to buy NAB insurance unit, Y200-300 bln deal – Yomiuri.
• Japan Panasonic to stop making batteries in Beijing, cut 1300 jobs – Nikkei.
• Svenska Handelsbanken launches Y66.8 bln 3-tranche samurai via BAML, et al.
• China PBOC fixes USD/CNY mid-point at 6.4085, CNY weakest since ’11, 7-day
reverse repo rate guidance rate at 2.35%, previous setting 2.50%.
• Poor US bond sales raise concerns about foreign demand – Reuters.
• Australia Q2 new CAPEX -4.0% q/q, -2.5% eyed, 3rd est ‘15/16 CAPEX A$114.8 bln
prev est A$104.0 bln, plant/machinery -1.2%, building -5.6%.
Looking Ahead – Economic Data (GMT)
• 06:00 DE Jul import prices, -0.3% m/m eyed; last -0.5%.
• 06:00 GB Aug Nationwide HPI, +0.4% m/m eyed; last +0.4%.
• 06:45 FR Q2 industry investment; last +7.0% AR.
• 06:45 FR Aug business climate index, 101.0 eyed; last 102.0.
• 07:00 ES Q2 GDP -final, +1.0% q/q, +3.1% y/y eyed; prelim +1.0%, +3.1%.
• 07:15 CH Q2 industrial production; last -0.5% y/y.
• 07:30 SE Jul household lending growth, +7.0% y/y eyed; last +6.9%.
• 08:00 EZ Jul money supply M3, +4.9% AR eyed; last +5.0%, 3-mo mov avge +5.1%.
• 08:00 EZ Jul private loans, +0.8% eyed; last +0.6%.
• 12:30 US Q2 GDP –prelim, +3.2% SAAR eyed; 1st est +2.3%.
• 12:30 US Q2 GDP deflator –prelim, +2.0% y/y eyed; 1st est +2.0%.
• 12:30 US Q2 PCE price index –prelim, +2.2% y/y eyed; 1st est +2.2%.
• 12:30 US Q2 -core PCE –prelim, +1.8% y/y eyed; 1st est +1.8%.
• 12:30 US w/e initial jobless claims, 274k eyed; last 277k.
• 14:00 US Jul pending home sales index, 111.4, -1.0% m/m; last 110.3, -1.8%.
• 15:00 US Aug KC Fed manufacturing, composite indices; last -5, -7.
Looking Ahead – Events, Auctions (GMT)
• N/A Final day Mannheim EEA Congress, Western Balkans Summit in Vienna.
• N/A Sweden SEK500 mln each 0.125/1.0% 2019/2025 index-linked bond auctions.
• N/A Italy E6.75 bln 6-month BOT auction.
• 11:00 ECB Coeure speech at Paris conference.
• N/A Kansas City Fed annual Jackson Hole symposium beings (till August 29).
JPY
• USD/JPY, JPY crosses steadier to bid in Asia, sentiment better.
• USD/JPY 119.82-120.37, looking for equilibrium, 117/8-122/3 new range?
• Offers from ahead of 120.50, trail up, bids towards 119.50.
• Some nearby option expirations today at 120.00 –USD312 mln.
• EUR/JPY 135.88-136.41, low late New York 135.46, GBP/JPY 185.32-186.48.
• AUD/JPY 85.29-98, NZD/JPY 77.10-78.
EUR
• EUR/USD opens Asia at 1.1315, down overnight on 4% Wall Street surge.
• EUR/JPY buys early, helps EUR/USD up from 1.1310 to 1.1342.
• Drift back to 1.1321 where bids re-emerge, new leg up to to 1.1353.
• EUR key beneficiary of the recent equities rout, likely off as mkt calms.
• 1.11-1.12 target on EUR pull-back, 1.1715 test if volatility persists.
GBP
• Cable on bounce from late New York 1.5453 low, Asia 1.5459 to 1.5508.
• More buoyant GBP/JPY helps.
• EUR/GBP inside day, Asia 0.7303-27, range yesterday 0.7293-0.7364.
CHF
• USD/CHF 0.9513-46 to-fro in Asia, off modestly early before bounce.
• 0.9550 high late in New York overnight.
• EUR/CHF off then bounces, Asia 1.0782-1.0800, 1.0795 200-DMA pivot.
AUD
• AUD/USD opens Asia at 0.7124, trades 0.7110-53, steady, inside day.
• CAPEX data mixed, widens range touch from 0.7116-40 pre-release.
• Light stops tripped on move above 0.7150 but no follow through.
• China negativity still present despite Shanghai Composite rally.
• AUD/USD destined trip optionality at 0.7000, stops below near-term?
NZD
• Non-descript 0.6440-71 Asia range follows 0.6440 New York close.
• Wall Street upbeat, positive SSEC –sentiment up, NZD short-covering.
• Outperformance vs AUD post-Aussie CAPEX, range however, AUD/NZD 1.1029-65.
• Players eye fresh 0.6400-0.6500 range, previous 0.6450-0.6550.
Equities, Other Asset Markets
• Wall Street rallies large, helps sent Nikkei up from get go, 18,810 high.
• At 18,596.28, still up 219.45 points or 1.19% on day.
• Shanghai Comp in black too, +1.55%, Hang Seng up larger 2.53%.
• KOSPI +0.49%, STI +2.0%, ASX +1.41% and Sensex +1.07%.
