- Trump says the Fed need to be proactive and cut interest rates and they should cut by a minimum of a full percentage point over ‘a period of time’. He’d also love to reduce capital gains tax.
- RBA’s Governor Lowe is reported to have called tensions between US and China “very worrying” during a private meeting, backing up yesterday’s minutes which placed greater concerns with global issues over domestic.
- South Korean producer prices contracted YoY for the first time since 2016. The Korean Won hit a 13-day low following the data.
- Another session of predictably small ranges for FX, with all pairs remaining well within their typical daily ranges. August is typically a quiet part of the year, but Jackson Hole is also suppressing volatility as investors appear reluctant to take risk.
- JPY and CHF are the weakest majors, AUD and CAD are the strongest by a very tight margin.
- Ahead of the European opening session, Asian stock markets have started to see profit-taking activities today after two days of consecutive gains in line with the weak performance seen overnight in the key benchmark U.S stock indices.
- Trade related news flow are backed in the limelight where U.S. President Trump has indicated that his administration is not backing down on U.S.’s “tough stance” towards China even if the on-going trade tension causes short-term harm to the U.S. economy.
- Rising European political risk is also adding to the on-going jitters where Italian Prime Minster Conte has been forced to resign due to infighting with the far-right Eurosceptic League political party.
- The worst performer as at today’s Asian mid-session is the Australia’s ASX 200 that has dropped by close to -1.00 % that wiped out yesterday’s gains. Mining stocks are the main culprit where heavy weights; BHP, Rio Tinto and Fortescue Metals have declined by -1.5% to -2.4%. In addition to the negative trade related news flow, weak iron ore and copper prices have also added to the woes.
- After a drop of -0.79% seen in the S&P 500 at the close of yesterday’s U.S. session, the S&P E-mini futures has shaped a minor bounce of 0.38% in today’s Asian session to print a current intraday high of 2906.
- The FOMC minutes are released tonight, although even they’re going to be overshadowed by the Jackson Hole symposium, given the event will provide opportunity to provide real-time information (whereas the minutes are backwards looking). Still, this puts USD crosses, gold, oil and indices into focus for potential reactions.
- Canadian CPI data could be of interest, although as outlined in their July MPR (Monetary Policy Report) they expect inflation to dip before returning to their 2% target. With YoY expected to fall to 1.7% (2% prior) it may have to be a particularly poor number / big miss to jolt markets.
Matt Simpson and Kelvin Wong both contributed to this article
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.