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Forex News Timeline

Thursday, August 17, 2017

Imre Speizer, Research Analyst at Westpac, points out that NZD/USD has fallen 3c over the past two weeks, mostly a result of a slightly firmer US doll

Imre Speizer, Research Analyst at Westpac, points out that NZD/USD has fallen 3c over the past two weeks, mostly a result of a slightly firmer US dollar. However the USD’s recovery looks fragile, leaving them with a neutral outlook for NZD/USD for the week ahead, he further adds.Key Quotes“Further out, apart from the potential for a USD recovery, there remain positioning and technical headwinds for the NZD. A fresher negative is the recent RBNZ intervention warning. We see little chance of that happening at this juncture, the published criteria for intervention not yet satisfied. But the RBNZ warning should at least sow some doubt among speculative longs.” “Longer term, we target 0.70 by year end.”

Market excitement about speculation that ECB President Draghi will not have a lot to say in Jackson Hole shows that ECB tapering remains the main summ

Market excitement about speculation that ECB President Draghi will not have a lot to say in Jackson Hole shows that ECB tapering remains the main summer topic, according to Carsten Brzeski, Chief Economist at ING.Key Quotes“On Wednesday morning, speculation that ECB President Mario Draghi would possibly not say anything new on the bank’s monetary policy at his speech at the Jackson Hole conference on 25 August shook up markets. The Reuters news agency reported sources saying that “expectations that this will be a big monetary policy speech are wrong”.” “Some market participants took this news report as a big disappointment. Many assumed that Draghi would not use the occasion to give further hints at reducing the ECB’s QE programme. In our view, such a reaction is a bit overdone. First of all, less than two weeks ahead of the next official ECB meeting, any announcement on significant policy changes are unlikely. Secondly, the important new set of ECB staff projections for inflation and growth will not have been finalised by 25 August. And finally, ruling out ‘a big monetary policy speech’ does not automatically exclude subtle changes in tone and message.” “Looking ahead, the path towards tapering is very obvious: the ECB only has three official meetings left at which it communicates and moderates the beginning of the end of QE. A major part of this challenge will be to find the right arguments.” “Also, the stronger euro alone could easily shave off 0.3 percentage points from the next ECB inflation projections for 2018 and 2019, presented at the September meeting. Even though parts of this exchange rate effect should be offset by stronger-than-expected growth, a slight downward revision of the ECB’s inflation forecasts looks likely. As inflationary pressure is hard to find, the ECB will have to put more emphasis on stronger growth, which consequently requires less monetary stimulus to maintain the same level of monetary accommodation, to justify tapering. In this regard, the one and only real new element of the Sintra speech could be re-introduced.” “Over the last three years, the ECB has had basically two major ways in preparing markets for upcoming policy changes: ‘task the relevant committees’ and ‘review and reexamine the current monetary policy stance’.” “The first one was applied at the start of QE and at the end of last year when the key phrase “the Governing Council has tasked ECB staff and the relevant Eurosystem committees” to do something indicated upcoming action. This action, by the way, never came in the subsequent meeting but three months later. The phrase that the Governing Council would “review and re-examine the current monetary policy stance at the next meeting” was used in late 2015 and early 2016 when the ECB beefed up QE twice. This option was always followed by immediate action at the subsequent meeting.” “All of this means that the Draghi doesn’t have to use the Jackson Hole platform to preannounce any upcoming policy changes. He can either opt for the well-known ‘committees’ option at the September meeting to prepare for a December tapering or try to cap further euro appreciation by keeping his cards to his chest in September and prepare the ‘re-examine’ option in October. While the latter could be the more dovish option, we think that Draghi and the ECB will want to go down the well-known road at the September meeting, announcing that the Governing Council has tasked the relevant committees to investigate options for a reduction of QE in 2018.”    

The greenback is now trading on a better footing vs. its Canadian counterpart, pushing USD/CAD to fresh daily tops near 1.2650. USD/CAD attention to

The greenback is now trading on a better footing vs. its Canadian counterpart, pushing USD/CAD to fresh daily tops near 1.2650.USD/CAD attention to US dataThe pair is recovering part of the ground lost after yesterday’s sharp sell off to the a1.2600 neighbourhood, coincident with the 21-day sma. USD sold off after Wednesday’s FOMC minutes showed the Committee remains split over the prospects of inflation, while some consensus emerged regarding the timing of the Fed’s balance sheet reduction, which should be relatively soon. The pair’s up tick is also reinforced by the softer tone in crude oil prices, with the barrel of West Texas Intermediate currently extending the downside to the mid-$46.00s, testing the 55-day sma at the same time. On the data front, Canadian June’s manufacturing shipments are due along with releases in the US docket, including initial claims followed by the Philly Fed manufacturing gauge, industrial production and capacity utilization. In addition, Dallas Fed R.Kaplan (voter, hawkish) and Minneapolis Fed N.Kashkari (voter, dovish) are due to speak.USD/CAD significant levelsAs of writing the pair is gaining 0.17% at 1.2640 and it faces the immediate hurdle at 1.2686 (10-day sma) seconded by 1.2738 (23.6% Fibo of the 2017 drop) and finally 1.2781 (high Aug.15). On the upside, a breach of 1.2588 (low Aug.17) would aim for 1.2412 (2017 low Jul.27) and then 1.2124 (low Jun.18 2015).

AUD/USD’s steady downtrend in the first half of August was consistent with lopsided speculative long positioning and a reversion towards fair value, a

AUD/USD’s steady downtrend in the first half of August was consistent with lopsided speculative long positioning and a reversion towards fair value, at least on Westpac’s estimates, explains Sean Callow, Research Analyst at Westpac.Key Quotes“The broad USD gains in that time were interrupted on Wednesday, with renewed doubts over the chances of another Fed rate hike this year and yet more political turmoil. As a high beta USD play, AUD outperformed, recapturing the 0.79 handle.” “Also helping AUD in recent sessions has been an easing in volatility measures, with North Korean tensions waning as the North backed off the threat to Guam.” “Spot iron ore prices slipped to 2 week lows but futures bounced midweek, as did base metals. Strong jobs data added to the fuel for the AUD/USD rebound which could extend to around 0.80 if USD struggles again.” “Yet hefty long AUD positions already imply an upbeat outlook, so it may be just as hard to sustain trade above 0.80 as it was three weeks ago.”

Having touched a two-week high level of 0.7963, the AUD/USD pair changed course and has now drifted into negative territory. Currently placed at sess

Having touched a two-week high level of 0.7963, the AUD/USD pair changed course and has now drifted into negative territory. Currently placed at session lows, around the 0.7920-15 region, the pair stalled its strong recovery move from near one-month lows touched on Tuesday and retreated around 40-pips from session tops.  The market seems to have digested Wednesday's dovish FOMC minutes, which revealed that the central bank was in no hurry to raise interest rates further amid concerns over easing inflationary pressure.    •  US: Divisions grow – INGHence, a goodish uptick in the US Treasury bond yields supported a notable US Dollar demand and has been one of the key factors weighing on higher-yielding currencies - like Aussie.  Also collaborating to the pair's weakness was today's Australian jobs data that showed an unexpected drop in the full-time jobs in July, and weaker trading sentiment around commodity space, especially copper.    •  Australia: July employment data was reasonable - BBHNext on tap would be the second-tier US economic data, which would be looked upon for some short-term impetus ahead of speeches by Dallas Fed President Robert Kaplan and Minneapolis Fed President Kashkari.Technical levels to watchA follow through retracement back below the 0.7900 handle is likely to accelerate the fall back towards mid-0.7800s before the pair eventually drops to 0.7825-20 important horizontal support.  On the upside, the 0.7960-65 region remains an immediate strong hurdle, above which the pair is likely to aim towards surpassing the key 0.80 psychological mark and test monthly highs resistance near the 0.8040-45 region.
 

Australia's July employment data was reasonable and will not change views of monetary policy, according to analysts at BBH.   Key Quotes “Australia

Australia's July employment data was reasonable and will not change views of monetary policy, according to analysts at BBH.  Key Quotes“Australia created 27.9k jobs, which was a bit more than expected, but there were all part-time positions.  There were 20.3k fewer full-time positions.  On the other hand, the June series was revised up to show a dramatic 69.3k full-time position.  The unemployment rate ticked down to 5.6% from a revised 5.7% even though the participation rate also rose (65.1% from 65.0%).”“The Australian dollar has built on yesterday's strong gains, some suggesting in part because of the continued rally in industrial metals, including copper to two-year highs.  It is testing a retracement objective near $0.7965.   There is an A$1.1 bln option expiring today struck at $0.7975.”

Manufacturing sales for June are the lone economic release from Canada and both analysts at TD and the market are calling for a correction. Key Quote

Manufacturing sales for June are the lone economic release from Canada and both analysts at TD and the market are calling for a correction.Key Quotes“TD expects manufacturing sales to decline by 1.2% m/m, slightly worse than the -1.0% consensus, on a combination of weaker auto shipments and another leg lower in gasoline prices. This and a broader decline in factory prices should result in a more modest decline in real manufacturing sales.”

In view of analysts at Danske Bank, the pair could still test the 1.20 region, although the potential up move seems to have run out of steam so far.

In view of analysts at Danske Bank, the pair could still test the 1.20 region, although the potential up move seems to have run out of steam so far.Key Quotes“The ECB’s recent flirt with stimulus exit talk has let the genie out of the bottle for EUR/USD and we no longer expect any substantial dip in the cross near term”. “While Fed eagerness to tighten more than is priced in for both rate hikes and balance-sheet reduction still has the potential to support the USD near term, we stress that it may induce the need for a tightening pause at a later stage”. “Speculators are now net long EUR/USD (IMM data), which suggests risks are on the downside for the cross near term. That said, we emphasise that any dips in the EUR/USD are likely to prove shallow and short-lived. Thus, we continue to see the cross in a range of plus/minus a few big figures around 1.13 on a 1-3M horizon”. “In our view, EUR/USD has the potential to rise towards the 1.20s as Fed-ECB divergence fades but the next move from current levels to, say, 1.20 will be more ‘demanding’ than the one from below 1.04 to 1.14 seen in H1. We still see the cross at 1.18 in 12M on valuation arguments”.

The minutes to the July FOMC meeting suggest growing splits within the Federal Reserve on the likely policy path, according to James Knightley, Chief

The minutes to the July FOMC meeting suggest growing splits within the Federal Reserve on the likely policy path, according to James Knightley, Chief International Economist at ING.Key Quotes“Some worry about low inflation and think they can be patient. Others think it will resurface and it could do so at any point. We think the latter's argument will probably win out come December.” “There appears to be growing disagreement within the Federal Reserve over how quickly monetary policy should be tightened. There is a group who suggest that with inflation continuing to undershoot the 2% target they have time on their side and there is no need for another rate hike anytime soon. For others the tight jobs market and expectations that it will continue to tighten mean that there is likely to be a more pressing need for action to prevent inflation potentially overshooting.” “There was also disagreement over the balance sheet reduction plan. While FOMC members agreed it should begin “relatively soon” and there were several who were “prepared to announce a start date”, it was clear that “most preferred to defer that decision until an upcoming meeting”. Once again, these more dovish members felt they had time on their side and could wait for stronger figures before announcing action.” “We still expect the Fed to confirm the plan in September, announcing an October start date. We also continue to expect a December Fed rate hike. GDP looks set to expand by around 3% in 3Q17, supported by consumer spending and an inventory rebuild. At the same time employment is likely to continue growing and we expect to see further evidence of an uptick in wages. With the dollar down 10% since the start of the year, which should contribute to rising import prices, we think that CPI will grind higher and be back above 2% by year end, giving the Fed the evidence it needs to justify ongoing gradual policy tightening.”

Cable’s perspective remains on the bearish side for the time being, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “While GBP edged bel

Cable’s perspective remains on the bearish side for the time being, noted FX Strategists at UOB Group.Key Quotes24-hour view: “While GBP edged below the strong 1.2845/50 support, it rebounded after touching a low of 1.2842. Downward pressure has eased and the current movement is viewed as part of a consolidation phase. In other words, GBP is expected to trade sideways from here, likely between 1.2850 and 1.2925”. Next 1-3 weeks: “Despite the lack of a ‘follow-through’ after the break of the major 1.2850 support (GBP eked out a fresh low of 1.2842), it is too early to expect a short-term low. Only a move back above 1.2970 (stop-loss level unchanged) would indicate that the bearish phase that started last Monday, 07 Aug, (spot at 1.3045) has ended. In the meanwhile, we could see a couple of days of short-term consolidation before the next leg lower even though any decline is expected to encounter solid support at 1.2775”.

In view of Sean Callow, Research Analyst at Westpac, the Aussie dollar looked tired in the first half of August, closing lower on 9 of the 11 trading

In view of Sean Callow, Research Analyst at Westpac, the Aussie dollar looked tired in the first half of August, closing lower on 9 of the 11 trading days from August 1-15.Key Quotes“This price action aligned well with the chart across, which shows an unusually large AUD net long stance among leveraged funds in the futures market. When positions are historically stretched – the longest stance since April 2013 when AUD/USD was 1.05 – the Aussie often struggles to find new buyers.” “This positioning suggested AUD/USD was vulnerable to both heightened risk aversion and any broad USD gains. Risk appetite has improved over the past week, with US equity market losing interest in commentary over North Korea, a shift arguably later validated by the somewhat surprising announcement from Pyongyang that it would not proceed with the plan to fire missiles into the waters around Guam.” “So that’s a positive for AUD, with volatility benchmarks easing back and global stocks picking up this week. But the US dollar traded strongly to start the week, trimming AUD/USD to just above 0.7800, a four week low. NY Fed president Dudley brushed aside the low July CPI reading, though as Rich notes on p3, inflation has been undershooting expectations for months. Overall US data has been tending to the firm side, which may yet support the dollar short term.” “Yet it is hard to be overly optimistic on USD in the week ahead. The FOMC minutes sounded a little more cautious and pricing for a rate hike by Dec (Westpac’s base case) seems likely to remain under 50%. The deepening divisions among Republicans reinforce concerns over September’s busy legislative session, where agreement needs to be reached on government funding and raising the debt ceiling.” “If these concerns outweigh the USD support from firm activity data then AUD/USD downside could be limited to the low-0.78 area, but any trade above 0.80 would also prove fleeting.”

Axel Rudolph, Senior Technical Analyst at Commerzbank, noted the pair could attempt a test of the 0.7980 region. Key Quotes “AUD/USD stabilized slig

Axel Rudolph, Senior Technical Analyst at Commerzbank, noted the pair could attempt a test of the 0.7980 region.Key QuotesAUD/USD stabilized slightly above the three month support line at .7806 as expected. It now targets the .7980/91 July 20 and August 4 highs around which it is likely to stall again”. “Below the .7808/06 current August low and support line lies good support at .7748/39. It is where the February and March highs meet the 55 day moving average”. “Above the .8065 level the .8162/66 May 2015 peak and 50% retracement can be seen. Above there lies the .8295 January 2015 high”.

The US dollar had steadied after softening in the North American afternoon yesterday when the dissolution of President Trump's business councils as a

The US dollar had steadied after softening in the North American afternoon yesterday when the dissolution of President Trump's business councils as a series of executives stepped down, points out the analysis team at BBH.  Key Quotes“The FOMC minutes added more fuel to the move.”“The market responded to the minutes by selling the dollar and buying US notes and bonds.  The narrative was the offered was that the market had seen in the minutes a reduced chance of another rate hike this year.”“The place to test that hypothesis, however, is not the long-end, but the short-end.  The closest proxy is the December Fed funds contract.  The implied yield rose a single basis point, and at 1.21%, it is slightly higher than it was at the end of last week (1.195%).”“In trading, a written confirmation is superior to a verbal confirmation.  When interpreting the Federal Reserve, a similar principle applies.  The minutes are an imperfect communication tool to guide expectations.  Voter and non-voter views are indistinguishable.  The passion and conviction are not easy to assess.  The record of a meeting from a few weeks ago is less significant than more recent comments by a person part of the Fed's leadership.”“Simply put, in addition to the limited movement in the Fed funds futures contracts, Dudley trumps the minutes.  Dudley expressed what we assume is the leadership's view:  balance sheet announcement next month, and a relatively low bar to a rate hike in December. Moreover, as we have been pointing out, Fed officials have buffered their argument about rates by spending more time talking about financial conditions.  This is important:  "vulnerabilities associated with asset valuation pressures edged up from notable to elevated."      

The GBP/USD pair failed to extend overnight recovery move and tumbled over 50-pips from session tops near the 1.2910 region. Currently hovering aroun

The GBP/USD pair failed to extend overnight recovery move and tumbled over 50-pips from session tops near the 1.2910 region. Currently hovering around 100-day SMA, near the 1.2860 region, the pair surrendered all of the yesterday's recovery gains and inched back closer to over one-month lows amid a strong greenback recovery. In fact, the key US Dollar Index reversed majority of perceived dovish FOMC minutes-led downfall and has been one of the key factors weighing on the major. Meanwhile, today's release of UK retail sales data, showing a monthly growth of 0.3% (vs. 0.2% expected), did little to provide any fresh boost to the British Pound and help the pair to build on previous session's recovery led by surprisingly stronger UK jobs data.   •  UK: Don’t be misled by better retail sales numbers - INGNext on tap would be the US economic docket, featuring the release of initial jobless claims, Philly Fed manufacturing index, industrial production and capacity utilization data. Later during the NY session, speeches by Dallas Fed President Robert Kaplan and Minneapolis Fed President Kashkari would also be looked upon for some impetus.   •  US: Industrial production amongst major economic releases today - TDSTechnical outlookA follow through weakness below 1.2840 level would turn the pair vulnerable to break below the 1.2800 handle and head towards testing 1.2775 support area. On the upside, momentum above the 1.2900 handle is likely to confront some fresh supply near 50-day SMA near the 1.2930 region, above which a bout of short-covering could assist the pair to move back towards reclaiming the key 1.30 psychological mark. 
 

In the US session, industrial production for July will serve as the data highlight amid a number of mid and lower-tier releases, explains the analysis

In the US session, industrial production for July will serve as the data highlight amid a number of mid and lower-tier releases, explains the analysis team at TDS.Key Quotes“TD looks for an on-consensus print, with IP rising by 0.3% m/m though manufacturing production should underperform slightly with a 0.2% advance. The Philadelphia Fed Index for August will be released at 8:30 ET alongside initial jobless claims. Market expectations are for the Philadelphia Fed index to edge lower to 18.0 from 19.5 while claims are forecast to fall to 240k from 244k. Also on the schedule is a 13:00 ET speech by Dallas Fed President Kaplan which will be followed by an audience Q&A and press conference.”

Analysts at HSBC offer their insights on what to expect from the upcoming US industrial production data, which is expected to have a major impact on t

Analysts at HSBC offer their insights on what to expect from the upcoming US industrial production data, which is expected to have a major impact on the USD price-action.Key Quotes:“Seasonal adjustment for industrial production is quirky in July, as this is the month when many automakers schedule their annual factory shutdowns.In past years, seasonal adjustment has often led to upside surprises for industrial production. However, we are uncertain about the likely impact this year, particularly given that auto sales have been weakening. We forecast that both industrial production and manufacturing production rose 0.3% in July.“    

The selling pressure behind the EUR/USD pair extends into the mid-European session, with the bears now eyeing a break below 1.17 handle. EUR/USD: Foc

The selling pressure behind the EUR/USD pair extends into the mid-European session, with the bears now eyeing a break below 1.17 handle.EUR/USD: Focus shifts to ECB minutes, US data dumpThe latest declines in the main currency pair are partly on the back of large option expiries casting a more-than a shadow on the Euro.  Meanwhile, the corrective rally seen picking-up pace in the US dollar against its main peers also drags the EUR/USD pair. Furthermore, the common currency also shrugged-off the Eurozone final CPI report, which showed a slight uptick in the bloc’s core CPI figures. Eurozone flash Core CPI y/y ticks higher in JulyThe major also remains under pressure ahead of the ECB minutes, as markets are expecting the ECB to provide fresh insights on the ECB Governing Council’s discussion on the recent Euro appreciation and its impact on the growth and inflation outlook. Besides, a fresh batch of economic releases from the US docket will remain in focus for fresh impetus on the greenback.EUR/USD Technical Set-up   According to Valeria Bednarik, Chief Analyst at FXStreet, “the pair has a major support around 1.1680/90, where it bottomed multiple times over the last two weeks. Below it, the next relevant support comes at 1.1590, a daily ascendant trend line coming from April's low. In the way, some support may be seen at 1.1640. The daily high on the other hand is the immediate resistance, yet the pair needs to advance beyond the 1.1820 to shrug off the negative tone and extend its advance towards 1.1860, quite unlikely at the time being.”

Justin Smirk, Research Analyst at Westpac, points out that May, June & July provided solid updates from the Labour Force survey and this recovery in e

Justin Smirk, Research Analyst at Westpac, points out that May, June & July provided solid updates from the Labour Force survey and this recovery in employment was something that Westpac Jobs Index has been pointing to for some time and our employment forecasts for the next few months incorporated this on-going strength which we expect to continue at least into Q4. Key Quotes“The Jobs Index is composite of business surveys employment indicators and is currently pointing to jobs growth of around 2%yr before accelerating to 2½%yr by around November this year.”  “In July, total employment rose 27.9k for a 87.5k total gain over the last three months or an average of 29.2k per month. The annual pace of employment growth has lifted from 0.9%yr in February to 2.0%yr in May and it held that pace through June and July. But it is worth noting that six month annualised pace was 3.3%yr in July, a solid bump up from 2.8%yr in June and the fastest pace since January 2011.” “The Australian labour market went through a soft patch in 2016 that was particularly pronounced through August to November when the average gain in employment per month was just 2.2k. We have clearly bounced out of this soft patch with the labour market now holding a firmer trend with an average monthly growth of 33k for the last six months.”“A solid update on the labour marketAll up this was positive update on the labour market following the robust trend sent by the leading indicators. We still expect the monthly numbers to be quite volatile month to month but our Jobs is pointing to total employment growth potentially hitting 2½%yr by year’s end. This estimate is now looking far more plausible. We are, however, looking for employment growth to slow as we move into 2017 on the back of a correction to dwelling construction activity, on-going soft household consumption and an underwhelming lift in private investment.”

Oil futures on NYMEX is on a declining trend so far this week and meanders near three-week troughs near mid-46s, as concerns over rising US production

Oil futures on NYMEX is on a declining trend so far this week and meanders near three-week troughs near mid-46s, as concerns over rising US production levels return to the markets and dampen investors’ sentiment. Moreover, a corrective rally seen in the US dollar versus its main competitors, following yesterday’s sharp sell-off triggered by dovish FOMC minutes, also collaborates to the latest leg down in the USD-sensitive oil. A stronger US dollar makes USD-denominated commodity more expensive for the holders in foreign currencies. However, the losses appear capped amid a huge drawdown in the US crude stockpiles, as reflected by the EIA weekly inventory report. Focus now shifts towards the US industrial production and Philly Fed manufacturing index for fresh direction on the US dollar, eventually impacting oil prices. At the time of writing, WTI trades -0.20% lower at $ 48.72 while Brent drops -0.30% to $ 51.90.WTI technical levels  The resistances are aligned at $ 46.95 (daily top), $ 47.49 (5-DMA), and $ 48.30 (10-DMA) while supports are located at $ 46.50 (psychological levels), $ 45.40 (Jul 24 low), $ 45.00 (round number).  

The USD/JPY pair has managed to recover majority of the early losses and rebounded around 40-pips from session lows near the 109.65 region.  With inv

The USD/JPY pair has managed to recover majority of the early losses and rebounded around 40-pips from session lows near the 109.65 region.  With investors looking past Wednesday's dovish FOMC meeting minutes, a goodish US Dollar recovery helped the pair to move back above the key 110.00 psychological mark. A modest uptick in the US Treasury bond yields, which tend to underpin the greenback demand, extended some immediate support to the major.  The recovery move, however, lacked any strong follow through traction and the pair continued holding in negative territory for the second consecutive session amid prevalent cautious environment, which tends to benefit the Japanese Yen's safe-haven appeal.  Today's second-tier US economic data - weekly jobless claims, Philly Fed Manufacturing Index and industrial production, would now be looked upon for some trading impetus ahead of a scheduled speech by Dallas Fed President Robert Kaplan, later during the NY session. Technical levels to watchImmediate resistance on the upside is pegged near 110.25 level, above which a bout of short-covering could lift the pair towards 110.65-70 strong horizontal resistance en-route the 111.00 handle.  On the downside, the 109.65-60 region remains an immediate support to defend, which if broken could accelerate the fall back towards 109.15 horizontal support en-route near 4-month lows support near the 108.75-70 region.
 

Consumer spending rose in the UK for the second consecutive month, but dig a little deeper and the picture looks less encouraging, according to analys

Consumer spending rose in the UK for the second consecutive month, but dig a little deeper and the picture looks less encouraging, according to analysts at ING.Key Quotes“Consumers still cutting back as income squeeze bitesAfter the second-warmest June on record, UK retail sales beat expectations and grew for the second month running; this hasn't happened for quite a while. Digging a little deeper, much of the strength came from food. Internet and clothing sales - both arguably better bellwethers of consumer's appetite to spend - declined. This latter point tends to support data from Visa and the British Retail Sales consortium, both of which have recently suggested that spending on non-essentials has fallen. A survey by Neilson also suggested that 30% of UK shoppers are switching to cheaper food brands, which could imply that the picture is actually worse in value terms than the latest, more resilient retail sales' volumes currently indicate. As always though, it's worth taking the latest data with a pinch of salt. The official retail sales data has been extremely choppy for some time now, partly as statisticians grapple with ever-changing consumer spending patterns. It's also worth noting how far the annual rate of growth has fallen since last year - the latest 1.5% YoY figure is well below the near 8% growth seen last November.”“No Bank of England hikes any time soonWith wage growth likely to float around 2% for the rest of the year and inflation set to inch closer to 3%, disposable incomes will continue to fall. The 10% YoY rise in consumer credit has also kept spending going up until now - that doesn't look particularly sustainable and is another potential risk to growth in the medium-term.  We don't expect a Bank of England hike this year.”

Greg Gibbs, Analyst at Amplifying Global FX Capital points out that in the final discussion on monetary policy, the RBA board did say that “faster gro

Greg Gibbs, Analyst at Amplifying Global FX Capital points out that in the final discussion on monetary policy, the RBA board did say that “faster growth in business investment was expected”, somewhat at odds with other areas of commentary, but it also said the overall growth outlook was little changed.Key Quotes“It appears that the outlook for growth and inflation was little changed, in part because the stronger exchange rate since May had offset the improvement in business conditions and the labour market.” “But the RBA was discouraging further strength in the currency, implying that it was on the cusp of dampening forecasts.  It said that, “a further appreciation of the exchange rate would be expected to result in a slower pick-up in inflation and economic activity than currently forecast.”  Repeating the wording used in the policy statement and SoMP.” “Housing and household debt remain key areas of policy concern, given higher attention and weight in all RBA statements, more so since RBA Governor Lowe took the helm about a year ago.” “Like China, this is colouring the RBA’s forecast for growth more darkly than the current trends in the economic data.  It remains a factor that is both restraining the RBA from raising and cutting rates.  The RBA is pleased that macroprudential measures have been added since last year and continues to monitor their impacts.” “At this stage, overall credit growth is relatively stable and there is some evidence of moderation in the big city housing markets. The RBA is arguably sitting calmly trying not to rock the household debt boat.”

The single currency has reverted the initial optimism and is now forcing EUR/USD to test the lower bound of the range near 1.1730. EUR/USD muted on d

The single currency has reverted the initial optimism and is now forcing EUR/USD to test the lower bound of the range near 1.1730.EUR/USD muted on dataSpot posted no reaction after final CPI prints in the euro area showed inflation figures matching their preliminary readings. In fact, headline consumer prices rose at a final 1.3% and contracted 0.5% on a monthly basis. The CPI excluding food and energy costs rose 1.2% over the last twelve months, a tad higher than June’s 1.1% advance. The pair has faded yesterday’s advance after the FOMC minutes came in on the dovish side, showing members remain pretty divided regarding the prospects of inflation, while there appears to be general consensus that the Fed should start reducing its balance sheet any time ‘soon’. Later in the NA session, the usual report on the labour market is next on tap seconded by the Philly Fed manufacturing gauge, industrial production and capacity utilization. In addition, Dallas Fed R.Kaplan (voter, hawkish) and Minneapolis Fed N.Kashkari (voter, dovish) are due to speak.EUR/USD levels to watchAt the moment, the pair is retreating 0.26% at 1.1735 facing the immediate support at 1.1688 (low Aug.15) seconded by 1.1611 (low Jul.26) and finally 1.1577 (4-month up trend). On the other hand, a breakout of 1.1790 (high Aug.17) would target 1.1846 (high Aug.11) en route to 1.1894 (high Aug.3).

The EUR/JPY cross extended previous session's pull-back and dropped to the lower end of the weekly trading range around the 129.00 handle post-EZ infl

The EUR/JPY cross extended previous session's pull-back and dropped to the lower end of the weekly trading range around the 129.00 handle post-EZ inflation figure. The cross held weaker near session lows after the final Euro-zone CPI print matched original estimates of slowing inflationary pressure and came-in to a show m-o-m drop of 0.5% in consumer prices, with yearly rate holding at six months low level of 1.3%. Meanwhile, the core CPI (excluding food, energy, alcohol, and tobacco) fell more than originally estimates on a monthly basis but seems to have been largely negated from a slight uptick in yearly number.   •  Eurozone flash Core CPI y/y ticks higher in JulyOther data released on Thursday showed Euro-zone trade surplus during the month of July rose to €22.3 billion, up from previous month's €19.7 billion and better than €20.4 billion surplus expected.  Today's mixed EZ economic data did little to provide any immediate boost to the shared currency as investors' focus remains glued to the ECB minutes. Against the backdrop of Wednesday's news headlines, that the ECB President Mario Draghi would not discuss monetary policy outlook at next week's Jackson Hole Symposium, investors would look for clues over a possible tapering in September in order to determine the next leg of directional move for the shared currency.   •  Cautious ECB means EUR/$ to still move lower before moving higher - INGTechnical levels to watchOn a sustained weakness below 129.00-128.90 area, the cross is likely to accelerate the fall towards 128.55 level before eventually targeting towards the 128.00 handle. On the upside, 129.35 level now seems to act as an immediate hurdle, above which the cross is likely to make a fresh attempt to conquer the key 130.00 psychological mark and head towards testing its next resistance near the 130.45-50 region.
 

Currently, AUD/USD is trading at 0.7821, up 0.01% on the day, having posted a daily high at 0.7826 and low at 0.7817. AUD/USD has stablised at the bo

Currently, AUD/USD is trading at 0.7821, up 0.01% on the day, having posted a daily high at 0.7826 and low at 0.7817. AUD/USD has stablised at the bottom of the overnight range which was all one way in favour of the greenback. Commodities were part of the act following a fall in iron ore by 1.4% overnight and a negative day for the Aussie was underpinned by positive data for the US economy, echoing the beliefs of Fed's Dudley yesterday in respect to the economy being on track and deserving of a further rate hike this year.   However, FOMC member Kaplan repeated last Friday’s comments about being patient on rate hikes. Analysts at Westpac have noted that the AUD has retraced 50% of the June/July rally, and suggested that it should extend below 0.7800 if the US dollar extends its gains.AUD/USD 1-3 month: Further out, the analysts at Westpac explained that if the RBA remains firmly on hold, as we expect, and the US dollar rises on tighter Fed policy, then AUD/USD could fall to 0.76 by year end. (9 Aug)FOMC minutes preview - NomuraAUD/USD levelsValeria Bednarik, chief analyst at FXStreet explained that most of the pair's decline can be attributed to dollar's strength. "Further slides are likely according to technical readings in the 4 hours chart, as the price moved further below its 20 SMA and broke below its 200 EMA for the first time in two months, while technical indicators maintain their bearish slopes near oversold readings," she explained, adding, "July 18th low at 0.7786 comes as a strong support for this Wednesday, with a break below it opening doors for a steeper decline towards the 0.7650 region during the following sessions." Only above the 0.8065 level the 0.8162/66 May 2015 peak and 50% retracement can be seen, according to analysts at Commerzbank. "Above there lies the 0.8295 January 2015 high. The longer term outlook is positive. The market has broken higher from a large triangle formation that targets eventually 0.8715 (one year + target)," argued the analysts. 

According to Eurostat’s final reading of Eurozone CPI report, the annual reading came in unchanged 1.3% in July, matching the flash reading. While,

According to Eurostat’s final reading of Eurozone CPI report, the annual reading came in unchanged 1.3% in July, matching the flash reading. While, the core figures ticked higher, coming in at 1.3% in July versus 1.2% expected and 1.2% booked in June. Separately, the Eurozone July trade surplus expanded to EUR 22.3 billion versus EUR 20.4 billion expected and EUR 19.7 billion previous.

European Monetary Union Consumer Price Index - Core (YoY) came in at 1.3%, above expectations (1.2%) in July

European Monetary Union Trade Balance s.a. above expectations (€20.4B) in July: Actual (€22.3B)

European Monetary Union Consumer Price Index (YoY) meets forecasts (1.3%) in July

European Monetary Union Consumer Price Index (MoM) in line with forecasts (-0.5%) in July

European Monetary Union Consumer Price Index - Core (MoM) below forecasts (-0.5%) in July: Actual (-0.6%)

European Monetary Union Trade Balance n.s.a. registered at €26.6B above expectations (€22.9B) in July

The EUR/GBP cross witnessed a corrective slide from yearly tops and held weaker near the 0.9100 handle following the release of UK macro data. The sp

The EUR/GBP cross witnessed a corrective slide from yearly tops and held weaker near the 0.9100 handle following the release of UK macro data. The spot had a muted reaction to the UK data that showed monthly retail sales posted the second consecutive month of growth of 0.3% in July. The disappointment, however, came from yearly rate, coming-in at 1.3% as compared to 1.4% growth expected and previous month's strong 2.8% growth (revised a bit lower from 2.9% reported earlier).    •  UK July retail sales arrive at 0.3% m/m vs 0.2% expectedMeanwhile, core retail sales (excluding fuel) bettered expectations and recorded a growth of 0.5% and 1.5%, on a monthly and yearly basis, respectively. With markets looking past yesterday's stellar UK employment details, today's mixed results did little to attract any strong GBP buying interest and helped the cross to defend the 0.9100 handle, at least for the time being. Next on tap would be the release of final Euro-zone CPI print for July, trade balance data and ECB Monetary Policy Meeting Accounts. The key focus would remain on the ECB minutes, where clues over a possible tapering in September would trigger some volatility across the EUR pairs.    •  Eurozone: Focus on ECB minutes – TDSTechnical levels to watchOn a sustained weakness below the 0.9100-0.9090 region, the cross is likely to extend the corrective slide towards mid-0.9000s before eventually dropping to test the 0.90 psychological mark. On the upside, 0.9125 level now seems to have emerged as immediate strong resistance, above which the cross is likely to make an attempt towards conquering the 0.9200 handle, with some intermediate resistance near 0.9175-80 area.
 

The sterling is clinging to its daily gains vs. the greenback on Thursday, with GBP/USD trading within a tight range around the 1.2900 handle. GBP/US

The sterling is clinging to its daily gains vs. the greenback on Thursday, with GBP/USD trading within a tight range around the 1.2900 handle.GBP/USD apathetic on UK dataCable stayed within the daily range around 1.2900 the figure despite the auspicious results from UK’s retail sales. In fact, headline sales rose at a monthly 0.3% (vs. 0.2% exp.) and 0.5% MoM stripping the Fuel sector (vs. 0.2% exp.) In the meantime, spot is looking to extend the rebound for the second session in a row on Thursday, backed by some positive headlines regarding the Brexit negotiation and some weakness around the buck in the wake of the FOMC minutes. In the data space, the pair should be wary of the ECB minutes (via EUR/GBP) and the US calendar, which includes initial claims, the Philly Fed manufacturing gauge, industrial production and capacity utilization. In addition, Dallas Fed R.Kaplan (voter, hawkish) and Minneapolis Fed N.Kashkari (voter, dovish) are due to speak.GBP/USD levels to considerAs of writing the pair is gaining 0.05% at 1.2898 facing the next hurdle at 1.2931 (55-day sma) followed by 1.2968 (10-day sma) and finally 1.3007 (38.2% Fibo of 1.2587-1.3266). On the flip side, a break below 1.2843 (low Aug.16) would open the door to 1.2808 (low Jul.12) and finally 1.2747 (76.4% Fibo of 1.2587-1.3266).

The office for National Statistics (ONS) published the UK’s retail trade report, which showed that the UK consumer spending stalled its rebound and ti

The office for National Statistics (ONS) published the UK’s retail trade report, which showed that the UK consumer spending stalled its rebound and ticked lower in July, although eased less-than expected on monthly basis. The UK’s retail volumes came in at 0.3% in July m/m, while the annualized retail spending dropped sharply to 1.3%. Markets had estimated a 0.2% reading on a monthly basis; while a 1.4% print was expected on yearly basis. Retail sales excluding volatile items such as fuel bettered market expectations, arriving at 0.5% m/m and 1.5% y/y.

United Kingdom Retail Sales ex-Fuel (YoY) above expectations (1.3%) in July: Actual (1.5%)

Hong Kong SAR Unemployment rate remains at 3.1% in July

United Kingdom Retail Sales (MoM) came in at 0.3%, above expectations (0.2%) in July

United Kingdom Retail Sales (YoY) below forecasts (1.4%) in July: Actual (1.3%)

United Kingdom Retail Sales ex-Fuel (MoM) registered at 0.5% above expectations (0.2%) in July

In light of Wednesday’s preliminary figures for GBP futures markets provided by CME Group, open interest decreased by almost 1.1K contracts from Tuesd

In light of Wednesday’s preliminary figures for GBP futures markets provided by CME Group, open interest decreased by almost 1.1K contracts from Tuesday’s final prints at 213,496 contracts. In addition, volume dropped by nearly 6K contracts.GBP/USD still bearishCable’s positive session on Tuesday was accompanied by declining open interest (bearish sign, points to short covering), which removed sustainability from the up move, leaving it expose to the prevailing bearish sentiment surrounding the Sterling.

The USD/CAD pair extended overnight slump and slipped below the 1.26 handle, to its lowest level in nearly 2-weeks during the early European session. 

The USD/CAD pair extended overnight slump and slipped below the 1.26 handle, to its lowest level in nearly 2-weeks during the early European session.  On Wednesday, the pair started correcting following the release of EIA report on US crude oil inventories. The pair accelerated the slide after the minutes from the Federal Reserve's monetary policy meeting on July 25th & 26th faded optimism over one more possible rate hike action in 2017, on concerns over the slowdown in inflationary pressure.  The pair continues to be weighed down by a modest uptick in crude oil prices, which tends to benefit the commodity-linked currency - Loonie, with the pair reversing nearly 200-pips from over one-month highs but still trying to defend the 1.2600 handle.  Meanwhile, the post-FOMC minutes US Dollar selling pressure seems to receded and the bulls trying to hold its neck above the 1.2600 handle ahead of the second-tier economic data, due for release later during the NA session. Today's economic docket features the release of Canadian manufacturing sales along with the US data - weekly jobless claims, Philly Fed Manufacturing Index, industrial production.Technical levels to watchOn a sustained weakness below 1.2580-70 zone, the pair is likely to accelerate the fall back towards the key 1.25 psychological mark en-route its next important support near the 1.2435-30 region. Meanwhile, on the upside, any up-move might now confront immediate resistance near 1.2660 level, above which a bout of short-covering could lift the pair beyond the 1.2700 handle, back towards multi-week highs resistance near 1.2755-60 area.
 

The UK’s Brexit ministry is out with a statement, responding to yesterday’s headlines, via Sky news, citing that the next phase of Brexit talks betwee

The UK’s Brexit ministry is out with a statement, responding to yesterday’s headlines, via Sky news, citing that the next phase of Brexit talks between UK and EU will likely be delayed to December. The Brexit department noted: Britain is confident that it will make sufficient progress in Brexit talks with the EU by October to move to next phase.

According to CME Group’s flash data for EUR futures markets, traders increased their open interest positions by just 645 contracts on Wednesday vs. Tu

According to CME Group’s flash data for EUR futures markets, traders increased their open interest positions by just 645 contracts on Wednesday vs. Tuesday’s final figures at 463,729 contracts. Volume rose by nearly 37K contracts, the second consecutive advance. Open interest is running a tad higher than the monthly average for the time being.EUR/USD up ticks appear limitedYesterday’s up move in EUR/USD was mainly fuelled by the negative reaction from the greenback to both the FOMC minutes and US politics. Despite the close was near session highs, the lack of support from open interest still leaves the door open for further consolidation, while further pullbacks to the initial support area at 1.1680 are not ruled out.

It does appear that while the RBA has acknowledged stronger growth in China and commodity prices this year, the risk of weaker growth driven by financ

It does appear that while the RBA has acknowledged stronger growth in China and commodity prices this year, the risk of weaker growth driven by financial sector stress has moved from a tail risk for the RBA to almost its central case, according to Greg Gibbs, Analyst at Amplifying Global FX Capital.Key Quotes“The minutes and the RBA SoMP released on 3 August spent considerable attention on the subject and, without spelling it out, the RBA appears to have incorporated a significant risk of an economic downturn and financial upheaval in China coming within its current 2 to three year forecast period; even next year, say no long after the 5-yearly leadership reshuffle later this year.” “The RBA is more concerned by China risks than most investors in the street; although certainly, it is a fairly mainstream concern.” “This does make it hard to get comfortably long AUD.  But on the other hand, the China cloud is causing the market and the RBA to pay little attention to more current evidence of a pick up in economic growth momentum in Australia, and abroad.” “There is a risk that the AUD rises suddenly because of a switch in focus from China clouds to domestic economic strength.” “The RBA minutes said, “Growth in China was expected to ease in 2018 and 2019 because of structural factors such as a declining working-age population, as well as policies to address financial risks. Members noted that the outlook for the Chinese economy remained a significant source of uncertainty. In particular, it was unclear how the authorities would negotiate the difficult trade-off between growth and the build-up of leverage in the Chinese economy. To address risks in the shadow banking sector, the authorities had recently sought to improve coordination among financial regulators and had announced tighter regulatory measures. Members noted that such measures could be difficult to calibrate and that, as a result, financial conditions might tighten by more than expected.”

Gold extended overnight strong rally and has now climbed back closer to over two-month highs touched last Friday, around $1290 level.  On Wednesday,

Gold extended overnight strong rally and has now climbed back closer to over two-month highs touched last Friday, around $1290 level.  On Wednesday, the precious metal rose sharply after minutes from the Federal Reserve's July meeting hinted towards a possible delay in further rate hikes. This coupled with the latest news that two White House business advisory groups have disbanded continued exerting pressure on the US Dollar and benefitted dollar-denominated commodities - like gold.    •  USD: Choppy consolidation - SocGenWith investors now looking past yesterday's dovish FOMC minutes, a modest greenback recovery, always backed by a pickup in the US Treasury bond yields, collaborated towards keeping a lid on further up-move for the non-yielding yellow metal, at least for the time being. Later during the NA session, the second-tier US economic data, followed by scheduled speech by Dallas Fed President Robert Kaplan would now be looked upon for some fresh impetus.  From a technical perspective, the commodity has managed to rebound from $1268-67 important horizontal support. Hence, resumption of the prior bullish trajectory, even beyond the key $1300 handle, now seems a distinct possibility. Technical levels to watchMomentum above $1290 level is likely to confront resistance near $1294-96 region, above which the metal seems all set to surpass the $1300 mark and aim towards testing its next hurdle near $1306-07 zone.  On the flip side, $1282 level now becomes an immediate support to defend, which if broken might turn the metal vulnerable to head back towards retesting $1271-70 support area.

Dutch national broadcaster NOS reported on Thursday, there is a 'hostage situation' at Dutch radio station, as the police surround the building with k

Dutch national broadcaster NOS reported on Thursday, there is a 'hostage situation' at Dutch radio station, as the police surround the building with knife and bag found outside.Key Details via Reuters:Dutch police confirm hostage-taking at the radio station Dutch police have cordoned off the building in the city of Hilversum The station's broadcasting is continuing at the moment with no sign of disruption

The UK’s British Chambers of Commerce (BCC) noted on Thursday, its 'trade confidence index', a measure based on export documentation provided by reg

The UK’s British Chambers of Commerce (BCC) noted on Thursday, its 'trade confidence index', a measure based on export documentation provided by regional chambers of commerce during the three months to June, was 2.5% lower than a year earlier, as cited by Reuters. The drop in the exporters’ confidence was mainly due to concerns about currency fluctuations and a shortage of skilled workers. Ian Wilson, chief executive of the British operations of delivery company DHL Express, which sponsored the report, noted: "Whilst UK businesses continue to deliver a strong export performance, they are increasingly concerned about what lies on the economic horizon."

Reports that President Draghi will not be making any new policy announcements during his Jackson Hole speech next week may have come as a disappointme

Reports that President Draghi will not be making any new policy announcements during his Jackson Hole speech next week may have come as a disappointment to EUR bulls hoping for a regime-shifting policy signal from the ECB chief, according to Viraj Patel, Research Analyst at ING.Key Quotes“Since the July ECB meeting, we have been arguing that markets might have got ahead of themselves when it comes to pricing in the ECB's next steps; less aggressive expectations over the timing and pace of QE tapering chimes with our message that EUR/$ will first move lower before moving higher from these levels. Without reading too much into yesterday's rumours, the absence of any policy discussion by Draghi does highlight the market-sensitive nature of monetary policymaking; gone are the days where central bank officials no longer worry about the market implications of their words (think Bernanke and the Fed’s “taper tantrum”).” “This will be the focus of the July ECB minutes today (1130 GMT) – with investors watching for whether the Governing Council raise concerns over a premature tightening of financial conditions. While the EUR has so far shown the resilience of a boxer refusing to go down despite taking a few big hits, we believe that signs of a more cautious ECB over the coming weeks may see some of this resistance fade. We continue to see scope for a EUR/USD retrace towards 1.15 post-Jackson Hole.”

In view of Kit Juckes, Research Analyst at Societe Generale, the main FX story is the choppy dollar consolidation. Key Quotes “The Minutes do nothin

In view of Kit Juckes, Research Analyst at Societe Generale, the main FX story is the choppy dollar consolidation.Key Quotes“The Minutes do nothing to move the debate. If there's an underlying story it's that where the dollar goes from here, it's less about the US and Fed policy than about what other central bankers do. US steady growth and slow-motion tightening are set to continue. So eyes move to the ECB because along with relief at the rebuttal of European populism, and better growth, the euro's bounce was triggered by expectations of further ECB tapering and more prosaically, higher Bund yields. The current EUR/USD range is only a stepping stone for a move to 1.20 and beyond if 1) the range-trading allows positions to become more balanced and 2) the ECB demonstrates that it is still on a journey to policy normalization, however slow.”

The daily chart of the Ethereum Classic or ETC/USD pair shows the bulls are working hard to avoid a big downside break of the descending triangle patt

The daily chart of the Ethereum Classic or ETC/USD pair shows the bulls are working hard to avoid a big downside break of the descending triangle pattern. Fake breakdownETC did breach the triangle pattern to the downside on Tuesday and fell to $13.01, but the sell-off was short lived as prices recovered to $14.50 yesterday. However, the follow through has been weak. Prices are struggling to take out the triangle resistance/descending trend line level of $14.12.  As per coinmarketcap.com, Ethereum Classic gained 4.8% over the last 24 hours. Its market cap currently stands at $1.3 billion.  ETC’s rival ETH [Ethereum] currently trades at $305.50; up 6% in the last 24 hours. 

Analysts at Danske Bank now expect the cross to grind lower and test the key 9.00 handle within a year’s time frame. Key Quotes “As we expected, Nor

Analysts at Danske Bank now expect the cross to grind lower and test the key 9.00 handle within a year’s time frame.Key Quotes“As we expected, Norges Bank removed the rate cut probability embedded into the rate path at the June meeting and at the same time signalled that no imminent rate hike is forthcoming (also our call)”. “The March-June weakening of the NOK should support growth and the inflationary outlook and, as such, the cooling housing market is the biggest domestic downside risk factor. However, we do not expect the current correction to have major real effects on the economy and, as such, domestics remain supportive for the NOK”. “In addition, we have turned slightly more upbeat on the global outlook, which diminishes the external headwinds. We roll our 1M forecast to 9.30 but leave the rest of the profile unchanged at 9.30in 3M,9.10 in 6M and 9.00in 12M”.

Analysts at TDS suggest that with the only significant data release today being the final release of Eurozone July HICP, the focus will be on the minu

Analysts at TDS suggest that with the only significant data release today being the final release of Eurozone July HICP, the focus will be on the minutes from the ECB’s 20 July meeting.Key Quotes“With little new information from the ECB at that meeting, one thing will be watching for is any conversation around tighter financial conditions, and how the ECB views the move higher in European rates and especially the EUR. So far the ECB hasn’t shown any obvious sign of discomfort with the EUR’s run higher, but markets will want to know where the ECB’s line in the sand lies.”

In view of FX Strategists at UOB Group, the outlook on the pair stays neutral as long as 1.1680 is not cleared on a daily close. Key Quotes 24-hour

In view of FX Strategists at UOB Group, the outlook on the pair stays neutral as long as 1.1680 is not cleared on a daily close.Key Quotes24-hour view: “EUR edged below the strong support highlighted at 1.1685/90 yesterday (low of 1.1680) before staging a robust and rapid rebound. The recovery appears to be running ahead of itself and while a move above the overnight high of 1.1778 would not be surprising, the next resistance at 1.1810 is unlikely to yield so easily. Support is at 1.1740 followed by 1.1710. The 1.1680 low is unlikely to come into the picture for now”. Next 1-3 weeks: ” While EUR touched a low of 1.1680 yesterday, it rebounded strongly and quickly to end the day well above this level. As highlighted, only a NY closing below 1.0680 would indicate that EUR has moved into a bearish phase. This scenario is not ruled out just yet even though the odds for such a move have diminished considerably. Only a move back above 1.1810 would suggest that the risk of a deeper down-move has eased”.

The AUD/USD pair was seen building on previous session's strong up-move and is currently placed at fresh two-week tops, around mid-0.7900s. The pair'

The AUD/USD pair was seen building on previous session's strong up-move and is currently placed at fresh two-week tops, around mid-0.7900s. The pair's recovery move from one-month lows got an additional boost during NY trading session on Tuesday after minutes from the Federal Reserve's latest monetary policy meeting reinforced market expectations that further rate hike in 2017 was unlikely.  The pair continued gaining traction through early European session on Thursday amid persistent US Dollar selling bias. The bullish momentum had a little impact from today's Australian jobs data that showed an unexpected drop in the full-time jobs in July.  According to the data released during Asian session on Thursday, Australian economy added 27.9K jobs (20K expected) during July, while the unemployment rate held steady at 5.6%. Meanwhile, the figure for June was revised higher to show an addition of 20K jobs, as compared to 14K reported earlier but was largely negated by an upward revision of unemployment rate.    •  Australia’s July employment report: Mixed reading, full time jobs drop sharplyLater during the NA session, the US economic data - weekly jobless claims, Philly Fed Manufacturing Index, industrial production and capacity utilization data, would now be looked upon for some fresh impetus.Technical levels to watchA follow through buying interest beyond 0.7965-70 area might now assist the pair to aim back towards reclaiming the key 0.80 psychological mark before darting towards monthly highs resistance near the 0.8040-45 region. On the downside, any pullback below 0.7925 level now seems to find some fresh buying interest near the 0.7900 handle, below which the pair is likely to drift back towards mid-0.7800s en-route 0.7825-20 strong horizontal support.
 

Cable should stay under downside pressure while below the 1.3031/49 band, suggested Axel Rudolph, Senior Technical Analyst at Commerzbank. Key Quotes

Cable should stay under downside pressure while below the 1.3031/49 band, suggested Axel Rudolph, Senior Technical Analyst at Commerzbank.Key QuotesGBP/USD recovers from the six month support line at 1.2866 with the 55 day moving average and July 20 low at 1.2931/33 being eyed. Having said that, we continue to suspect that the 1.3267 current August high was the end of the up move. While trading below the next higher 1.3031/49 May and August 11 highs immediate downside pressure will be maintained. Further resistance sits at the 1.3126 July 18 high”. “Once the current August low at 1.2842 has given way the 1.2775/59 area will be in focus. It contains the December 2016 high and the April 21 low”.

Viraj Patel, Research Analyst at ING, suggests that this is arguably the most divided FOMC that they’ve seen since the central bank began normalising

Viraj Patel, Research Analyst at ING, suggests that this is arguably the most divided FOMC that they’ve seen since the central bank began normalising policy, with the number one debate being whether the current weakness of US inflation is transitory or transitional.Key Quotes“There are clearly two camps within the committee: those that prefer a wait-and-see policy approach given the uncertain inflation outlook and those that are happy to rely on traditional macro relationships like diminishing spare capacity (or above-trend growth) generating higher future inflation. We think that the US data in 2H17 will give us evidence of being somewhere in the middle, which supports our Fed outlook of announcing balance sheet plans in Sep, and then cautiously hiking again in Dec. Markets will want confirmation from the incoming US data before fully pricing in a Dec hike.” “Still, we don’t think it’s profitable chasing broad $ strength on a Fed story; while there will be short-term tactical opportunities (like long USD/JPY), the Fed is just one of three factors weighing on the $. The other two are (a) signs that the US economic cycle is beginning to top out in the absence of any pro-growth fiscal stimulus and (b) what we see as a political risk premium or political uncertainty having an outright negative effect on the dollar. Both are how we rationalise the decoupling between USD crosses and short-term interest rate differentials – and why the Fed may just be a subplot for the dollar right now. The bottom line is that while the post-minutes $ weakness may be a slight overreaction to Fed noise, it is understandable noise given a split FOMC and uncertain US political backdrop. Look for DXY to remain supported by the 92.50/55 low.”

In the euro area, the ECB minutes from the July meeting are set to be released while UK retail sales figures for July are out as well which are going

In the euro area, the ECB minutes from the July meeting are set to be released while UK retail sales figures for July are out as well which are going to be amongst the main market movers for today’s session.Key Quotes“Focus will remain on discussions related to extension of the QE programme. At the meeting, the Governing Council was unanimous in setting no precise date for when to discuss changes to the QE programme and additionally, Draghi said the ECB had not tasked its staff to look into QE options after December. In light of this, it will be interesting to see how the discussion within the Governing Council has evolved around extending QE.” “The UK retail sales figures for July are out today, which markets tend to pay attention to, although they can be misleading with regard to the overall condition of private consumption. However, due to declining consumer confidence and negative real wage growth, we believe that the figures will reflect only modest growth in private consumption.” “In the US, today s data releases include the initial jobless claimsand industrial production numbers for July as well as the Philly Fed business conditions index . Additionally, Dallas Fed President Kaplan (voter, dovish) speaks this evening.”

Austria HICP (YoY): 2% (July)

Austria HICP (MoM) down to -0.6% in July from previous -0.1%

UK retail sales Overview The UK retail sales data is expected to ease to 0.2% m/m in July, while on annualized basis, retail sales are also seen tick

UK retail sales OverviewThe UK retail sales data is expected to ease to 0.2% m/m in July, while on annualized basis, retail sales are also seen ticking lower to 1.4%. In June, retail sales were seen at 0.6% over the month. Meanwhile, core retail sales data, excluding fuel, are expected to come in at 0.2% m/m and 1.3% y/y. The report will be published later this session at 0830GMT.Deviation impact on GBP/USD Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 70 pips in deviations up to 3.5 to -1.5, although in some cases, if notable enough, a deviation can fuel movements of upto 100 pips.How could affect GBP/USD?A positive surprise in the retail sales report could offer fresh impetus to the GBP bulls, taking the rate back towards 1.2950 levels. While a bigger-than expected drop in the retail volumes would knock-off the pair back to 1.2850/45 – key support area. In terms of technicals, “From current levels, the recovery move could get extended towards an important confluence support break-point now turned strong resistance near the 1.2930 region, comprising of 50-day SMA and 50% Fibonacci retracement level. A convincing break through the mentioned hurdle could trigger a short-covering rally towards the key 1.30 psychological mark, also coinciding with 38.2% Fibonacci retracement level.” “On the flip side, the 1.2865 region, closely followed by 1.2840 level, remains immediate support levels to defend. A decisive break below the mentioned supports would turn the pair vulnerable to break below the 1.2800 handle and head towards testing 1.2775 support area,” Haresh Menghani, Analyst at FXStreet explained.Key notesUK retail sales volumes to fall in July - HSBC UK: Retail sales likely to post second consecutive 0.6% m/m gain - TDSAbout UK retail salesThe retail Sales released by the National Statistics measures the total receipts of retail stores. Monthly percent changes reflect the rate of changes of such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. Generally speaking, a high reading is seen as positive, or bullish for the GBP, while a low reading is seen as negative or bearish.  

Analysts at TDS are looking for UK retail sales to hold up reasonably well in July with the second consecutive 0.6% m/m gain (mkt 0.2%). Key Quotes

Analysts at TDS are looking for UK retail sales to hold up reasonably well in July with the second consecutive 0.6% m/m gain (mkt 0.2%).Key Quotes“This would be the first back-to-back gains in sales volumes since July-August last year. It seems that we’re near the peak of exchange rate pass-through into consumer prices, which should help to lessen the drag on real incomes later this year, and put consumer spending growth on a stronger footing going forward.”

The USD/JPY pair extended previous session's sharp retracement from the vicinity of 111.00 level and remained under some selling pressure for the seco

The USD/JPY pair extended previous session's sharp retracement from the vicinity of 111.00 level and remained under some selling pressure for the second consecutive day on Thursday. The pair slipped further below the key 110.00 psychological mark and reversed majority of Tuesday's strong gains led by upbeat US monthly retail sales data. Persistent greenback selling bias, with the US Dollar Index extending overnight sharp drop from 3-week highs, has been one of the key factors weighing on the major.  The latest political drama in the White House, following by perceived dovish FOMC meeting minutes continued attracted some fresh selling pressure around the buck and failed to assist the pair to build on its recent recovery move from near 4-month lows touched last Friday.   •  FOMC minutes showed divided opinions – UOBMeanwhile, a modest pullback in global equity markets, pointing to a slight deterioration in investors' risk appetite, was also seen supporting the Japanese Yen's safe-haven appeal and further collaborated to the pair's fall to the 109.65 region. Today's US economic docket, featuring the release of weekly jobless claims, Philly Fed Manufacturing Index and industrial production data, would now be looked upon for some immediate respite for the USD bulls. Technical outlookOmkar Godbole, Analyst and Editor at FXStreet writes: "A break above the Asian session high of 110.21 would add credence to the bull trap argument made by the resilient yield spread and the risk reversal and shall open doors for the inverse head and shoulders neckline hurdle of 110.92. An end of the day close above 110.92 would mean the sell-off from the high of 114.49 has ended at 108.73 [Aug 11 low]." "The spot could then proceed to test supplies around 103.11 [inverse head and shoulders target as per the measured height method]. On the downside, a daily close below 109.50 [trend line support] would revive the bearish view" he added.

The greenback, in terms of the US Dollar Index (DXY) stays within the negative ground so far today, although it has managed to bounce off lows near 93

The greenback, in terms of the US Dollar Index (DXY) stays within the negative ground so far today, although it has managed to bounce off lows near 93.20.US Dollar offered post FOMCThe index quickly faded the bull run to the area of tops around the 94.00 handle in response to a dovish message from the FOMC minutes on Wednesday. In fact, the Committee showed members remain divided regarding the prospects of inflation, while the majority agreed that the Fed should start to reduce its balance sheet ‘relatively soon’. Despite no precise dates were mentioned, markets expect some announcement in this regard at the September meeting. Furthermore, the US political arena was back on the headlines yesterday following news that Trump’s CEO Business Council threatened to break up, adding extra downside pressure to the buck. US money markets also took a hit following Wednesday’s events, with yields of the 10-year reference giving up gains and retreating towards the 2.22% handle, where it seems to have found some contention. In the US data space today, the usual report on the labour market is due seconded by the Philly Fed manufacturing gauge, industrial production and capacity utilization. In addition, Dallas Fed R.Kaplan (voter, hawkish) and Minneapolis Fed N.Kashkari (voter, dovish) are due to speak.US Dollar relevant levelsThe index is losing 0.09% at 93.33 and a break below 93.22 (low Aug.17) would aim for 92.83 (low Aug.11) and finally 92.39 (2017 low Aug.2). On the other hand, the initial up barrier aligns at 94.05 (high Aug.16) seconded by 94.11 (high Jul.26) and finally 95.10 (23.6% Fibo of the 2017 drop).

Livesquawk reporting latest headlines on the Brexit issue, citing that the UK government is considering plans to introduce visa-free travel for the Eu

Livesquawk reporting latest headlines on the Brexit issue, citing that the UK government is considering plans to introduce visa-free travel for the Europeans after Brexit.

Chief Analyst Allan von Mehren at Danske Bank sees the European cross keeping the 0.90 handle and above for the time being. Key Quotes “EUR/GBP edge

Chief Analyst Allan von Mehren at Danske Bank sees the European cross keeping the 0.90 handle and above for the time being.Key QuotesEUR/GBP edged lower yesterday after UK labour market figures showed the unemployment rate falling further to 4.4% in June and as average weekly earnings accelerated”. “The fall in unemployment indicates that excess capacity has fallen in the UK and if this translates into rising wage growth it could put pressure on the BoE to tighten policy. However, real wage growth is still negative and we think the underlying inflation pressure will stay muted, as we see limited room for significantly higher wage growth when GDP growth is slowing”. “We still expect the BoE to remain on hold until 2019 and not raise interest rates as Brexit uncertainty remains unusually high which should keep EUR/GBP above 0.90 near term”.

Analyst Alvin Liew at UOB Group assessed yesterday’s release of the FOMC minutes. Key Quotes “The 2 key takeaways from the July FOMC minutes were 1)

Analyst Alvin Liew at UOB Group assessed yesterday’s release of the FOMC minutes.Key Quotes“The 2 key takeaways from the July FOMC minutes were 1) There is broad agreement to begin the Fed Reserve’s balance sheet reduction (BSR) “relatively soon” but 2) there is a divide between Fed policy makers over when to hike interest rates due to differing views on US inflation developments”. “The FOMC minutes gave more confidence that the BSR announcement will be in the upcoming September FOMC although a caveat for the projection is that the US debt ceiling limit issue is a non-event which remains our base case scenario”. “We retain our next rate hike forecast to be at December 2017 FOMC while still being mindful about US inflation developments”. “The next key event for the Fed Reserve could be the annual monetary policy symposium organized by the Federal Reserve of Kansas City (Jackson Hole Symposium) on 24-27 August but FOMC Chair Yellen has yet to confirm her attendance”.

Senior Technical Analyst at Commerzbank Axel Rudolph noted the pair could move higher as long as it trades above 1.1681. Key Quotes “EUR/USD remains

Senior Technical Analyst at Commerzbank Axel Rudolph noted the pair could move higher as long as it trades above 1.1681.Key QuotesEUR/USD remains side-lined above its recent low at 1.1681. While remaining above here, there is scope for further gains with the recent high at 1.1848 being in focus. If bettered, the current August peak at 1.1910 will be back in the picture, a rise above which will put the 1.2042 2012 low on the map. Still further up sits the 50% retracement from the move down from the 2014 high at 1.2168”. “Were a a drop below the 1.1681 level to be seen, though, the 1.1621/1.1576 area would be targeted. It is where the late July low meets the five month support line”. “Failure at the five month uptrend line will trigger losses to the mid-June high at 1.1296 and the more important 1.1110 end of May low”.

FX option expiries for today Aug 17 NY cut 1000ET (Source DTCC)  EURUSD: 1.1650 (EUR 1.15bln) 1.1700 (1.08bln) 1.1795 (1.4bln) 1.1800 (1.2bln) 1.1850

FX option expiries for today Aug 17 NY cut 1000ET (Source DTCC)  - EURUSD: 1.1650 (EUR 1.15bln) 1.1700 (1.08bln) 1.1795 (1.4bln) 1.1800 (1.2bln) 1.1850-55  (1.35bln) 1.1875 (1.38bln) - USDJPY: 109.95-00 (USD 1.86bln) 110.75-80 (1.3bln) 111.60-70 (1.15bln) - AUDUSD: 0.7875 (AUD 915m) 0.7975 (1.1bln)

Reuters out with the outcome of a survey published on Thursday by the market research firm Nielsen on the UK’s consumer confidence after the Brexit vo

Reuters out with the outcome of a survey published on Thursday by the market research firm Nielsen on the UK’s consumer confidence after the Brexit vote.Key Findings:53% of Britons scrimped between April and June - the highest proportion since 56 percent did so during the same period of 2015 This marked a swing back towards household cost-cutting over the course of the past year, which had been at its lowest level on record - 40 percent - in the two months after the Brexit vote in June 2016 Britain declined from second in Europe's consumer confidence rankings just before the Brexit vote to the ninth now Shoppers have changed their behaviour in a way that is reminiscent of the aftermath of the financial crisis in 2008/9, said Steve Smith, managing director of Nielsen UK and Ireland Thirty percent of respondents cited switching to cheaper grocery brands as their money-saving tactic, with another 27 percent working to save on gas and electricity A quarter of respondents spent less on new clothes and take-away meals, while fewer were willing to cut down on out-of-home entertainment, holidays and alcohol.

Reuters reporting comments from San Francisco Federal Reserve (Fed) President John Williams told CNN television, in an interview with the news netwo

Reuters reporting comments from San Francisco Federal Reserve (Fed) President John Williams told CNN television, in an interview with the news network recorded on Tuesday and aired Wednesday. Williams is not a voting member on the Fed's policy-setting committee this year.Key Quotes:When asked how far along the Fed was on its rate-hike path: "We're about half way there."

The EUR/USD pair keeps its latest bullish streak intact amid persistent broad based US dollar weakness, fuelled by yesterday’s FOMC minutes release

The EUR/USD pair keeps its latest bullish streak intact amid persistent broad based US dollar weakness, fuelled by yesterday’s FOMC minutes release and renewed US political jitters.EUR/USD capped below daily pivot of 1.1740The bulls are seen gathering pace for further upside, allowing the EUR/USD pair to consolidate yesterday's sharp recovery gains, in the wake of a non-favorable FOMC minutes induced massive USD sell-off. The US 10-year Treasury yields posted the biggest daily drop since July-end, dragging the greenback broadly lower. The FOMC members expressed their concerns weak inflation, staying on the defensive with regard to the Fed rate hike prospects this year. However, the Fed indicated its readiness to begin reducing its $4.2 trillion balance sheet from next month. Moreover, better-than expected Eurozone second quarter annualized growth figures also keeps the sentiment underpinned around the Euro. Eurozone Q2 flash GDP growth bettered expectations on yearly basisLooking ahead, the major could regain 1.18 handle, should the European traders react negatively to the FOMC minutes release, which could trigger a fresh selling wave in the buck. Meanwhile, the pair could also get influenced by the Eurozone CPI report, ECB minutes and US dataflow due for release later today.EUR/USD Technical Set-up   According to Mohammed Isah FXTechstrategy, “resistance comes in at 1.1800 level with a cut through here opening the door for more upside towards the 1.1900 level. Further up, resistance lies at the 1.1950 level where a break will expose the 1.2000 level. Conversely, support lies at the 1.1700 level where a violation will aim at the 1.1650 level. A break of here will aim at the 1.1600 level. All in all, EURUSD faces further upside pressure.”  

The Sterling seems to have recovered the smile in the second half of the week, with GBP/USD now gravitating around 1.2900 the figure ahead of the open

The Sterling seems to have recovered the smile in the second half of the week, with GBP/USD now gravitating around 1.2900 the figure ahead of the opening bell in Euroland.GBP/USD focus on UK dataCable is posting its second consecutive session with gains so far today mainly helped by the renewed weakness surrounding the greenback. In fact, the US Dollar Index stays on the defensive in response to the dovish tone from the FOMC minutes on Wednesday, while effervescence appears to have resurfaced in the US political scenario. Ahead in the day, UK’s retail sales for the month of July are due, while the Philly Fed manufacturing gauge, industrial production and capacity utilization are all expected across the ocean. In addition, Dallas Fed R.Kaplan (voter, hawkish) and Minneapolis Fed N.Kashkari (voter, dovish) are due to speak. Cable should also stay wary of the publication of the ECB minutes and the potential effects on EUR/GBP.GBP/USD levels to considerAs of writing the pair is gaining 0.05% at 1.2898 facing the next hurdle at 1.2931 (55-day sma) followed by 1.2968 (10-day sma) and finally 1.3007 (38.2% Fibo of 1.2587-1.3266). On the flip side, a break below 1.2843 (low Aug.16) would open the door to 1.2808 (low Jul.12) and finally 1.2747 (76.4% Fibo of 1.2587-1.3266).

France ILO Unemployment dipped from previous 9.6% to 9.5% in 2Q

France ILO Unemployment increased to 95% in 2Q from previous 9.6%

France ILO Unemployment: 9.5% (2Q) vs previous 9.6%

Netherlands, The Unemployment Rate s.a (3M) dipped from previous 4.9% to 4.8% in July

Felicity Emmett, Senior Economist at ANZ explains that it was another strong labour market report for Australia in July, showing employment up 28k and

Felicity Emmett, Senior Economist at ANZ explains that it was another strong labour market report for Australia in July, showing employment up 28k and unemployment at 5.6%.Key Quotes“Some of the detail was a bit softer than the headline: full-time jobs fell, hours worked were down and the jobs gains were narrowly based.  But we wouldn’t overplay these details. The labour market is clearly improving and additional job gains look likely in the near term. Further out, we continue to think that ongoing inroads into the unemployment rate will be more difficult to achieve, in part because the strong pace of public sector employment gains is unlikely to be sustainable. Employment rose 27.9k in July, building on the strength of the past few months. The unemployment rate printed at 5.6%, down a tick from an upwardly revised 5.7% in June.  The strength was narrowly based geographically, with Queensland (+27k) accounting for nearly all the jobs growth. NSW employment rose very modestly (+0.5k) while employment in Victoria (-2.2k), Western Australia (-1.3k) and Tasmania (-2.2k) fell. After extraordinary strength over the past few months, full-time employment fell 20.3k, while part-time jobs rose 48.2k. We would not read too much into this, given that annual growth in full-time employment remains very strong at 2.4%. The weakness in full-time employment was reflected in hours worked, which fell 0.8% m/m. Underemployment looks to be unchanged in the month. Our rough seasonal adjustment of the ABS monthly series suggests that underemployment remained at 8.4% in July, in line with June but well down from its peak of 8.9% in February.    While the recent improvement in the labour market is an encouraging sign for the RBA, and business surveys suggest some near term downside risk to the unemployment rate, further material inroads into the unemployment rate look likely to be more difficult to achieve over the next year or so, particularly if housing construction slows as we expect and the pace of public sector jobs growth slows.”

The three most interesting aspects of the minutes from the July FOMC meeting centered on the balance sheet, inflation and financial conditions, points

The three most interesting aspects of the minutes from the July FOMC meeting centered on the balance sheet, inflation and financial conditions, points out the analysis team at Nomura.Key Quotes“Overall, markets perceived the minutes as mildly dovish. We maintain our forecast that the next hike will take place in December meeting. However, we think the minutes marginally lowered the likelihood of a December rate hike.” “The greatest consensus appeared to be on the balance sheet. While some members were ready to announce the balance sheet adjustment at the July meeting, “most preferred to defer that decision until an upcoming meeting”, i.e., September. This supports expectations of an announcement of the balance sheet adjustment at the upcoming meeting next month on 19-20 September.” “Regarding signs of the Committee’s thinking behind future rate hikes, the minutes conveyed a robust debate on the interpretation of the recent soft readings of inflation, and hence on the inflation outlook. Recall that at the July FOMC meeting, the participants had not seen the most recent inflation print (for July) which showed that a single item, lodging away from home, accounted for nearly all of the downside surprise for core CPI inflation.”

Forex today in Asia was dominated by broad USD weakness, as the US dollar continued to face double whammy amid renewed US political woes and less opti

Forex today in Asia was dominated by broad USD weakness, as the US dollar continued to face double whammy amid renewed US political woes and less optimistic Fed’s outlook on inflation. Amongst the Asia-pac currencies, the Yen was the strongest, in response to better-than expected Japanese trade data, while the Aussie stalled its recovery mode on the back of mixed Australian jobs report. The NZD/USD pair sits near Tuesday’s high of 0.7333, as the bulls cheer upbeat NZ PPI data.Main topics in AsiaNZD/USD headed to 0.7350 as NZ PPI underpins The NZD/USD pair is seen extending their recovery from five-week lows in Asia this Thursday, now looking to take-out key resistances located near 0.7330 levels en route 0.7350 levels. WH Chief Strategist Bannon: “We’re at economic war with China” Remarks from the White House Chief Strategist Steve Bannon crossed the wires earlier today, via Reuters, as he expressed his views on China, Korea, and his enemies in the Trump administration in an interview with the American Prospect. Australia proposes stronger money laundering rules, includes bitcoin - RTRS The Australian Minister of Justice Michael Keenan said in a press release on Thursday, Australia announced a bill today to strengthen its money laundering laws, Reuters reports. Australia’s July employment report: Mixed reading, full time jobs drop sharply Australian July employment report came mixed, with the employment change at 27.9k vs 20k exp and 14k prior, with full time job creation at -20.3k vs 69.3k (revised higher) last, while part time jobs came at 48.2k vs -48k last.Key Focus aheadIn the session ahead, the RBA Assistant Governor Ellis speech will remain in focus ahead of the key UK retail sales report.  Meanwhile, from the Euroland, the final CPI, trade balance and ECB monetary policy meeting minutes will be closely eyed for fresh impetus on the Euro. In the North American session, the Canadian manufacturing sales will be released alongside a spate of US economic releases, including the jobless claims, Philly Fed manufacturing index and industrial production data. Besides, speech by the FOMC member Kaplan is also on the cards in the American morning. GBP/USD re-takes 1.2900 in Asia, UK retail sales in focus The GBP/USD pair caught a fresh bid-wave in Asia and extended its overnight steady rise to reclaim 1.29 handle. However, the bears continue to lurk above the last amid mixed market sentiment and increased nervousness ahead of the key UK retail sales data. EUR/USD - Will ECB minutes re-establish the uptrend, Descending triangle noted? EUR/USD found takers at the 20-day low of 1.1681 and ran into rising trend line hurdle after the Fed minutes released in the NY session showed growing concerns among policymakers about weak inflation. UK retail sales volumes to fall in July - HSBC HSBC analysts offer a sneak peek on what to expect from the UK retail sales report, which will be reported at 0830GMT later today. ECB monetary policy meeting minutes preview – HSBC In the view of analysts at HSBC, the ECB minutes is likely to provide fresh insights on the ECB Governing Council’s discussion on the recent euro appreciation and its impact on the growth and inflation outlook.  

In Australia, it was another headline jobs data that beat the consensus, although tempered by a correction in full-time employment, explains the resea

In Australia, it was another headline jobs data that beat the consensus, although tempered by a correction in full-time employment, explains the research team at TDS.Key Quotes“Strong upward trends in full-time employment and hours worked underpin the RBA’s cautious optimism on the labour market, and in turn, are expected to spark wages growth from current record low levels.” “Headline employment rose by +27.9k in July, after an upwardly revised +20k in June. The unemployment rate remained at 5.6% as expected, although June was lifted to 5.7%. The participation rate edged a little higher to 65.1% (mkt 65%). Annual employment growth has remained steady at 2%/yr for the past three months, consistent with the leading employment indicators, and we expect a similar pace to persist in the coming months.” “Waiting for more wage (and CPI) reports adds to our case for RBA patience. We see the first rate hike not occurring until May 2018.”  

RBA minutes commentary on private and public business investment sounded quite upbeat and appears to allude to upside risks to the RBA forecasts that

RBA minutes commentary on private and public business investment sounded quite upbeat and appears to allude to upside risks to the RBA forecasts that are for a “pick up later in the forecast period”, but to remain subdued for now, notes Greg Gibbs, Analyst at Amplifying Global FX Capital.Key Quotes“They cite evidence pointing to a faster pickup sooner: strong business confidence, commercial vehicle sales up, non-res building approvals up, public infrastructure flowing to private order books.” “The RBA minutes noted that business investment had picked up internationally, they said, “In particular, growth in business investment had picked up in several advanced and emerging economies, including the United States, Canada, Japan and a number of economies in east Asia.” “It is interesting that the RBA is using the international experience to support their forecast of subdued wage growth, but do not appear to be applying the same thought process to business investment.  If business investment is happening more globally, and conditions and indicators are pointing to the same in Australia, its further reason to expect a stronger recovery in Australia, sooner.” “Low bar for labour market improvementThe minutes also talk about the strong labour market this year.  But forecast little further improvement in the unemployment rate. This is a point of risk for AUD bears.  The RBA has set a very low bar for the labour market to improve faster than its forecasts.  At the end of their forecast period (2+years) they see unemployment only a bit below 5.5%.  Unemployment (5.6%) could improve a lot faster if the recent pace of job growth keeps up.  Especially if business investment rises faster than forecast.”

US housing starts fell 4.8% m-o-m in July to an annual pace of 1155k, below expectations (Nomura: -3.0% to 1178k, Consensus: +0.4% to 1220k) while Jun

US housing starts fell 4.8% m-o-m in July to an annual pace of 1155k, below expectations (Nomura: -3.0% to 1178k, Consensus: +0.4% to 1220k) while June housing starts were lowered to 1213k (previously reported as 1215k), notes the analysis team at Nomura.Key Quotes“We think the underlying pace of single-family housing starts remains intact, while multifamily housing starts continued to slow. Housing construction permits were also weaker than expected in July, falling 4.1% m-om to an annual pace of 1223k (Nomura and Consensus: -2.0% to 1250k). The decline in permits was led by an 11.2% m-o-m drop in multifamily housing permits, reverting from the 19.3% increase in June. Single-family housing permits were unchanged. The sharp pullback in multifamily housing permits suggests that the multifamily sector may continue to weigh down overall housing starts in the near term.” “GDP tracking update: Today’s single-family housing starts and permits data were slightly stronger than we had expected, suggesting that residential investment in Q3 may be greater than we have previously anticipated. While multifamily housing starts came in weaker than expected, considering the difference in construction expenditure per unit between single-family and multifamily homes, and a weak relationship between multifamily starts and actual construction spending which is estimated on an accrual basis, we think that the positive impact from strong single-family starts outweighs the decline in multifamily starts. Thus, we raised our Q3 GDP tracking estimate by 0.1pp to 3.0% q-o-q saar.”  

The latest Fed minutes showed that although the debate about inflation remains alive and well (as it does most everywhere), a majority of FOMC partici

The latest Fed minutes showed that although the debate about inflation remains alive and well (as it does most everywhere), a majority of FOMC participants continue to expect inflation to gradually rise to the 2% target over the medium term, explains the analysis team at ANZ.Key Quotes“The main market interest was in comments around the timetable for shrinking the Fed’s QE-bloated balance sheet. With the Fed staff raising their assessment of financial stability risks to “elevated” (from “notable”), it’s a key question. In the end, the door was kept open for a September announcement of a timetable. Settling on one will be quite a challenge, given evidence of robust internal debate on most every topic relevant to the decision. One expects the timetable will be highly conditional with a multitude of escape clauses as the Fed monitors the market response closely.”

Khoon Goh, Head of Asia Research at ANZ, suggests that despite recent improvement in Singapore’s economic growth, they continue to favour staying shor

Khoon Goh, Head of Asia Research at ANZ, suggests that despite recent improvement in Singapore’s economic growth, they continue to favour staying short SGD as they expect MAS to remain neutral for a prolonged period and see scope for the S$NEER to retrace lower.Key Quotes“Our view towards SGD has not changed, even with the S$NEER backing off recent highs. Though Singapore’s Q2 GDP growth was revised up and the Ministry of Trade and Industry narrowed their 2017 full year growth forecast to 2-3% from 1-3% previously, we do not see recent improvements altering the current MAS neutral monetary policy stance.” “There are no upside pressures on inflation in Singapore, apart from administrative price rises such as the increase in water prices from July, which will push headline CPI higher. The labour market remains weak, despite the headline unemployment rate easing to 2.2% in Q2 from 2.3% in Q1. The headline unemployment rate masks a deterioration in the labour market. Employment contracted for the second consecutive quarter by 7.8k (following a 6.8k contraction in Q1). If we exclude foreign domestic workers, the decline in employment was even larger at 8.4k. The weak state of the labour market mean core inflation pressures will remain subdued, and MAS policy is set to stay neutral for some time. We do not see an exit from the neutral policy stance until there is a substantial improvement in the labour market.” “GO SHORT SGD VS IDRTo express our SGD view and to partially remove the dollar risk, we recommend going short 3m SGD/IDR forward at 9916 (spot reference 9801), targeting 9700 with stop-loss at 10000. IDR is one of our preferred currencies in the region and offers attractive carry.”

South Korea's president Moon crossed the wires last hour, via Reuters, addressing a news conference marking his first 100 days in office. Key Quotes:

South Korea's president Moon crossed the wires last hour, via Reuters, addressing a news conference marking his first 100 days in office.Key Quotes:"I would consider that North Korea is crossing a red line if it launches an intercontinental ballistic missile again and weaponises it by putting a nuclear warhead on top of the missile." Moon added that Trump has promised to seek negotiations and approval from South Korea before taking any options regarding North Korea.

 James Marple, Director & Senior Economist at TD Economics, explains that the Federal Open Market Committee (FOMC) members noted little change to the

 James Marple, Director & Senior Economist at TD Economics, explains that the Federal Open Market Committee (FOMC) members noted little change to the economic or labor market outlook, but spent a considerable time pondering the "the softness in inflation" and how to react to it. Key Quotes“While most members saw inflation returning to two percent over the medium term, "many...saw some likelihood that inflation might remain below two percent for longer than they currently expected, and several indicated that the risks to the inflation outlook could be tilted to the downside."  “Balancing some of the concern around soft inflation was an opposing perspective that financial conditions had eased despite gradual policy tightening.” “FOMC members largely agreed to the timing of balance sheet normalization. The minutes noted that: "participants generally agreed that, in light of their current assessment of economic conditions and the outlook, it was appropriate to signal that implementation of the program likely would begin relatively soon, absent significant adverse developments in the economy or in financial markets." “Key ImplicationsNo major surprises here. Just like everyone else, FOMC members are trying to understand why inflation is decelerating even as the economy continues to tighten. There is not one simple answer, but the Fed meeting minutes showed members discussing some of the potential factors, namely a weakened relationship between resource slack and inflation, a lower natural rate of unemployment, greater lags in the relationship between tightening and inflation, and restraints on pricing power from technology and globalization.  Despite the debate, the orthodoxy appears to be holding and most members continue to believe that a hot economy will eventually push price growth higher. Nonetheless, there appears to be enough doubt in the minds of members to take a wait and see approach. This would appear to bar the door on any immediate increase in policy rates (in September) and suggests that a December hike will require at least some evidence that inflation is moving higher. At the same time, there appears little disagreement on the need to begin normalizing the size of the balance sheet or the general belief that this should have little effect on the broad conduct of monetary policy, which the FOMC hopes to achieve mainly through adjusting the federal funds rate target.”  

The NZD/USD pair is seen extending their recovery from five-week lows in Asia this Thursday, now looking to take-out key resistances located near 0.73

The NZD/USD pair is seen extending their recovery from five-week lows in Asia this Thursday, now looking to take-out key resistances located near 0.7330 levels en route 0.7350 levels.NZD/USD trades above 10-DMA at 0.7311The Kiwi remains on the front foot this session, benefiting from broad based US dollar weakness and better-than expected NZ PPI data, which came in at 1.4% in the reported month versus 0.9% expected and 0.8% previous. The greenback slumped across the board in the US last session, after the FOMC minutes showed that the FOMC members remained divided over the inflation outlook, raising doubts over future rate hike prospects. Meanwhile, the renewed uptick seen in oil prices after the latest declines, also offered fresh impetus to the resource-linked NZD. Looking ahead, it remains to be seen if the upcoming US macro releases offer some respite to the USD bulls.NZD/USD Levels to consider                                                                               NZD/USD holds above 10-DMA at 0.7311, with 0.7287 (daily pivot) still guarding 0.7250 (psychological levels) and a break back below 0.7189 (100-DMA) are key near-term downside areas. To the topside, a test of 0.7348 (50-DMA) due on the cards, which could open doors towards 0.7382 (classic R2/ Fib R3).

Greg Gibbs, Analyst at Amplifying Global FX Capital, points out that the RBA discussed inflation and commented specifically on market services CPI and

Greg Gibbs, Analyst at Amplifying Global FX Capital, points out that the RBA discussed inflation and commented specifically on market services CPI and the influence of low labour costs. Key Quotes“The market services ex-vol items is the lowest underlying measure at the moment at 0.8%y/y in Q2, up from 0.7%y/y in Q1.” “They mentioned a number of factors that tended to downplay the recent rise in inflation, pointing to tobacco excise and utility price rises that could be considered temporary.  And low rent trends in major cities.” “They forced the exchange rate into the discussion on their inflation forecasts saying that “the forecasts were conditioned on the assumption of no change in the Australian dollar exchange rate during the forecast period, which extends to the end of 2019, and that this assumption was one source of uncertainty.” “This is just obvious and does not need to be said, but by saying it, raises the exchange rate as a significant policy issue.  They planted it there to continue to discourage the market from pushing up the AUD.” “The sub-target outlook for inflation suggests no rush to raise rates even if the RBA is surprised by strength in the economy.” “The RBA is trying quite hard by its standards to discourage further gains in the exchange rate, but there is no sign they would consider intervention any time soon, and it is still quite a ways from considering a rate cut to offset further currency gains.  At best it seems a higher exchange rate might delay hikes, but these are considered unlikely over the year ahead anyway.” “Their flat outlook for rates probably prevents a big rise in the AUD/USD.” “The RBA currency statements are little different than the RBNZ and should have limited bearing on the AUD/NZD cross.”  

Justin Smirk, Research Analyst at Westpac, notes that the Australia’s July Labour Force Survey provided the fifth consecutive solid update on the pace

Justin Smirk, Research Analyst at Westpac, notes that the Australia’s July Labour Force Survey provided the fifth consecutive solid update on the pace of employment growth as the 27.9k gain was above market expectations (20k) but less than Westpac’s forecast for 35k.Key Quotes“In July the annual pace of employment growth was flat at 2.0% which is currently consistent with the Westpac’s Jobs Index. We should note, however, that the Jobs Index is pointing to employment growth accelerating to around 2½%yr pace. As such, we are not looking for a slowdown in employment growth until early 2018.” “In July, total employment rose 27.9k for a 87.5k total gain over the last three months or an average of 29.2k per month. The annual pace of employment growth has lifted from 0.9%yr in February to 2.0%yr in May and it held that pace through June and July. The Australian labour market went through a soft patch in 2016 that was particularly pronounced through August to November when the average gain in employment per month was just 2.2k. We have clearly bounced out of this soft patch with the labour market now holding a firmer trend with an average monthly growth of 33k for the last six months.” “There was the usual volatility in full-time/part-time employment but over the past few months the results are more indicative of a robust labour market. Full-time employment fell 20.3k following on from a solid 69.3k gain in June. In the year full-time employment gained 197.7k for a 2.4%yr pace which is now exceeding that for the pace of growth in the working age population. Part-time employment rose 48.2k following a –49.3k in June. In the year to July, part-time employment has lifted 41.6k or a 1.1%yr pace.” “A further sign of consolidation as the 0.8% fall in hours worked following the 0.7%mth bump June which followed a 1.5% surge in May. The annual pace for total hours worked has eased back to 1.9%yr from to 3.3%yr in June which was the fastest pace seen since December 2015.” “The reported gain in employment was also associated with a 0.1ppt bump up in participation to 65.0 leading to a 29.0k gain in the labour force so it was somewhat surprising to see a fall in the unemployment to 5.6% from 5.7%. However, it would be best to report it as flat as at three decimal places the unemployment rate was 5.650% from 5.654% in June. We believe we have seen the low point for unemployment in this cycle and expect it to hold around 5.6% until it starts to drift higher from end 2017.” “A consolidation picture comes through in the state date, with soft gains in NSW (+0.5k) and SA (0.8k), falling employment in Vic (–2.2k) and WA (–1.3k) all being offset by a surge in Qld (+27.0k). This mixed employment print was matched in unemployment which rose in NSW (now 5.0% from 4.9%) and Vic (6.1% from 5.9%) while the unemployment rate fell in Qld (6.2% from 6.5%) and WA (5.4% from 5.6%).” “So while this was a month for consolidation it is still a sound update on the labour market. While we expect the monthly numbers to be quite volatile, the Jobs Index is pointing to total employment growth hitting 2½%yr by year’s end. From a 2.0%yr starting point this estimate is now looking far more plausible.”  

In view of analysts at ANZ, NZD is still hostage to USD direction with the Fed minutes, sharp fall in US 10 year bond yields and cessation of Trump’s

In view of analysts at ANZ, NZD is still hostage to USD direction with the Fed minutes, sharp fall in US 10 year bond yields and cessation of Trump’s Manufacturing Council (of 28 CEO’s, 12 had resigned) undermining the greenback.Key Quotes“We continue to favour fading strength, backing firmer data signals to ultimately provide support to the USD. “Support 0.7260 Resistance 0.7360”

EUR/USD found takers at the 20-day low of 1.1681 and ran into rising trend line hurdle after the Fed minutes released in the NY session showed growing

EUR/USD found takers at the 20-day low of 1.1681 and ran into rising trend line hurdle after the Fed minutes released in the NY session showed growing concerns among policymakers about weak inflation.Data heavy day, focus on the ECB minutesThe currency pair closed at 1.1766 and extended gains 1.1790 in the Asian session. The key data due for release are - Eurozone July final CPI at 9:00 GMT, Eurozone trade balance at 10:00 GMT, ECB minutes at 11:30 GMT. Across the pond, weekly jobless claims will be released at 12:30 GMT, followed by industrial production at 13:15 GMT and Fed’s Kaplan speech at 16:30 GMT. Sounds like a data heavy data, although the main event for the day is the ECB minutes release. ECB minutes - watch out for comments on the exchange rateThe minutes due today are expected to shed more light on the discussion that took place within the governing council on inflation outlook, potential QE taper and the impact of the recent Euro appreciation on growth and inflation.  On the inflation front, the minutes are likely to reiterate Draghi’s view that there are no convincing signs of a pickup in price pressure and that inflation currently stands well below the central bank’s target.  Coming to exchange rate, the minutes are more likely to say that a strong Euro could cap inflation, but is also a sign of growing confidence in the Eurozone economy. Finally, more clues regarding a potential QE taper in September/October could move the EUR pairs as well.  The bulls may regain control of the EUR/USD if the minutes hint at the September QE taper and sound upbeat on inflation and economy. On the other hand, bears may come-in strong if the minutes highlight concerns regarding weak inflation and EUR strength. Moreover, it would mean the ECB could delay the QE taper. EUR/USD Technical LevelsThe daily chart shows a descending triangle formation, which are typically continuation patterns. However, at times the descending triangles have worked as bearish reversal patterns as well.  A break above 1.1812 [triangle hurdle] would open up upside towards 1.1848 [Aug 11 high], above which a major hurdle is seen at 1.1910 [recent high]. On the downside, breach of support at 1.1765 [Asian session low] could yield 1.1687 [triangle support]. An end of the day close below the same signal trend reversal and open doors for 1.15 levels. 

In the view of analysts at HSBC, the ECB minutes is likely to provide fresh insights on the ECB Governing Council’s discussion on the recent euro appr

In the view of analysts at HSBC, the ECB minutes is likely to provide fresh insights on the ECB Governing Council’s discussion on the recent euro appreciation and its impact on the growth and inflation outlook.Key Quotes:“As we had expected, the ECB did not make any change to rates, QE and forward guidance in the July meeting. No indication was given on when a decision will be made on the future of QE after December, other than it will be in the autumn ...” “With regards to inflation, Mr Draghi reaffirmed that there is "no convincing sign of a pick-up in underlying inflation" in the eurozone and that "inflation is not where we want it to be", backtracking slightly from the statement he made at the end of June in Sintra - which caused some market concerns about a possible early tapering of QE - in which he mentioned that "deflationary forces had been replaced by reflationary ones". “The minutes should give us more of a flavour of the discussion that took place within the Governing Council, including whether some members were concerned about the implications of the recent euro appreciation for growth, inflation, and the monetary policy outlook.”

The Australian Minister of Justice Michael Keenan said in a press release on Thursday, Australia announced a bill today to strengthen its money launde

The Australian Minister of Justice Michael Keenan said in a press release on Thursday, Australia announced a bill today to strengthen its money laundering laws, Reuters reports. The bill also brings the bitcoin providers under the remit of AUSTRAC, the government's financial intelligence unit.Key Quotes:"The threat of serious financial crime is constantly evolving, as new technologies emerge and criminals seek to nefariously exploit them. These measures ensure there is nowhere for criminals to hide." "Stopping the movement of money to criminals and terrorists is a vital part of our national security defences and we expect regulated businesses in Australia to comply with our comprehensive regime."  

The GBP/USD pair caught a fresh bid-wave in Asia and extended its overnight steady rise to reclaim 1.29 handle. However, the bears continue to lurk

The GBP/USD pair caught a fresh bid-wave in Asia and extended its overnight steady rise to reclaim 1.29 handle. However, the bears continue to lurk above the last amid mixed market sentiment and increased nervousness ahead of the key UK retail sales data.GBP/USD: All eyes on UK retail salesIn the US last session, the spot found support once again near 1.2845 region and staged a solid comeback from there, after a non-favourable FOMC minutes release weighed heavily on the US dollar and Treasury yields.Meanwhile, a positive surprise seen in the UK jobs report combined with a slack in the US housing sector also collaborated to Cable’s bounce. So far this session, the GBP/USD pair struggles to take on the recovery above 1.29 handle, as expectations of a drop in the UK retail sales volumes for July continue to undermine the sentiment around the pound. Also, a recovery in the US yields across the curve dampens the sterling’s attractiveness as an alternative higher-yielding asset. Data-wise, the main risk event for the major today remains the UK retail sales, while the US dataflow, including the industrial production data will also have a major impact on the prices.GBP/USD levels to consider              Valeria Bednarik, Chief Analyst at FXStreet noted: “The 4 hours chart shows quite a limited upward potential, given that technical indicators are barely reconverting from oversold levels but still well below their mid-lines, whilst the 20 SMA maintains a sharp bearish slope well above the current level, capping the upside now around 1.2930. Support levels: 1.2830 1.2795 1.2760 Resistance levels: 1.2910 1.2950 1.2990.”  

Gold extended post-Fed rally in Asia as the US 10-*year treasury yield fell by the most in three weeks. Prices clocked a high of $1289.43 earlier toda

Gold extended post-Fed rally in Asia as the US 10-*year treasury yield fell by the most in three weeks. Prices clocked a high of $1289.43 earlier today before trimming gains to trade around $1287 levels.  The bullish move gathered steam from the low of $1267.81 after the Fed minutes showed the policymakers are getting increasingly nervous about the weak inflation. This cemented expectations that the Fed would be forced to slow down the pace of the policy tightening. Consequently, the 10-year Treasury yield fell 4 basis points, leading to broad based USD weakness and gold rally.  However, the sentiment in the options market has not improved. The chart below shows the one month 25-delta risk reversal remains largely unchanged around 0.90 and well below the recent high of 1.525. One-month 25-delta risk reversalThe positive reading does indicate the calls are more in demand as compared to puts. However, the lack of improvement in the metric, despite the rally in the underlying could be a hint of a bull trap. Gold Technical LevelsThe metal is fast approaching the key resistance zone of $1290-1300. Since April, the metal has failed three times near $1295 levels. Thus, an end of the day close above $1300 would signal a failure of the triple top formation and shall open doors for $1337 [Nov 2016 high].  On the downside, breach of support at $1282 [5-DMA] could yield a pullback to $1278 [10-DMA] and $1274 [Aug 1 high].   

HSBC analysts offer a sneak peek on what to expect from the UK retail sales report, which will be reported at 0830GMT later today. Key Quotes: “UK r

HSBC analysts offer a sneak peek on what to expect from the UK retail sales report, which will be reported at 0830GMT later today.Key Quotes:“UK retail sales held up reasonably well in June, aided perhaps by better weather and lower petrol prices. For July, early indicators have been somewhat poor: the VISA consumer spending index was down in y-o-y terms for the third consecutive month, while the BRC index was held up only by food sales: discretionary spending was down 0.7% 3m/3m. So, we expect sales volumes to fall in July. And with some strong base effects for July 2016, this could take the y-o-y rate to a new four-year low.”

According to the latest JODI oil data, Saudi Arabia’s crude exports fell by 0.035m bpd (m/m) to 6.889m bpd in June, while the Kingdom’s crude output r

According to the latest JODI oil data, Saudi Arabia’s crude exports fell by 0.035m bpd (m/m) to 6.889m bpd in June, while the Kingdom’s crude output rose by 190k bpd (m/m) to 10.070m bpd in the reported month.

The bullish move in the AUD/USD pair has stalled around 0.7940 levels this Thursday morning in Asia after the data released in Australia showed the fu

The bullish move in the AUD/USD pair has stalled around 0.7940 levels this Thursday morning in Asia after the data released in Australia showed the full time jobs unexpectedly declined in July. Daily chartWednesday’s sharp gains mark a rebound from near rising trend line support. This is encouraging sign for the AUD bulls, although the options market isn’t convinced. Risk Reversal and VolsThe one-month 25-delta risk reversal improved only slightly from -1 to -0.95. Moreover, the negative reading shows the Put options are in demand. Furthermore, the one-month ATM volatility fell to 7.845 today, the lowest level since July 17.   

A survey of chief financial officers (CFO) across Britain and Europe conducted by Thomson Reuters revealed the following: 69 percent of businesses ha

A survey of chief financial officers (CFO) across Britain and Europe conducted by Thomson Reuters revealed the following: 69 percent of businesses had not seen an impact from the vote for Brexit on their strategic planning "The results suggest a relatively muted response from business so far - not the knee-jerk reaction that some expected," said Laurence Kiddle, managing director for the EMEA Tax & Accounting business of Thomson Reuters 12 percent of CFOs had investigated moving operations out of Britain 34 percent said that they anticipated the number of employees in the UK decreasing 19 percent said that they planned to relocate staff as a result of Brexit 21 percent of all CFOs saying they had have held off from expanding in the UK as a result of the vote UK FinMin Hammond is more trusted than UK PM May by UK and EU businesses UK and EU businesses have most confidence in Bank of England (BOE) Governor Carney in generating a positive deal for their industry

The AUD/JPY’s retreat from six-day tops of 87.47 gained further traction, following the release of the Australian employment report, which failed to i

The AUD/JPY’s retreat from six-day tops of 87.47 gained further traction, following the release of the Australian employment report, which failed to impress the AUD markets.AUD/JPY finds buyers near 50-DMA at 87.01The selling pressure behind AUD/JPY intensified, after the mixed Aus jobs data pushed the AUD/USD pair closer towards daily lows. Australia’s July employment report: Mixed reading, full time jobs drop sharplyMoreover, persisting cautious tone seen in Asia combined with solid Japanese trade data continue to keep the demand intact for the Japanese currency, exerting further downward pressure on AUD/JPY. Japan Merchandise Trade Balance Total above expectations (¥392B) in July: Actual (¥418.8B)However, the losses appear capped as the spot continues to hold above the key 50-DMA support, having found support from a drop in the US dollar and Treasury yields on less optimistic Fed, while higher commodities’ prices also underpin the sentiment. Focus now shifts towards a fresh batch of US economic releases for fresh impetus on both the AUD and JPY.Technical LevelsHigher side: 87.45 (20-DMA), 87.74 (Fib R2), 88 (round number) Lower side: 86.73/67 (10 & 5-DMA), 85.94 (classic S2), 85.31 (200-DMA)

AUD/USD remains bid, but is struggling to extend gains beyond 0.7950 levels as the data released in Australia showed an unexpected drop of 20.3K in th

AUD/USD remains bid, but is struggling to extend gains beyond 0.7950 levels as the data released in Australia showed an unexpected drop of 20.3K in the full time jobs in July.  The economy added 27.9K jobs, beating the estimated figure of 20K. The June figure was revised higher to 20K from 14K. Meanwhile, the jobless rate came-in at 5.6% as expected. The part time jobs registered a growth of 48.2K in July compared to the prior month’s drop of 48.0K. Bond yield spread remains unchangedThe upbeat headline figure is good news; however, the dismal full time jobs number is playing spoil sport.  This is evident from the fact that the spread or the difference between the Aussie 10-year bond yield and the US 10-year Treasury yield remains unchanged at the pre-data level of 42 basis points. Thus, the spot too remains largely unchanged around the pre-data figure of 0.7935. AUD/USD Technical LevelsA break above 0.80 [psychological hurdle] would open doors for 0.8043 [Aug 1 high] and 0.8066 [July 27 high]. On the downside, breach of support at 0.7886 [5-DMA] could yield a pullback to 0.7839 [Aug 11 low] and 0.7808 [Aug 15 low].   

Australian July employment report came mixed, with the employment change at 27.9k vs 20k exp and 14k prior, with full time job creation at -20.3k vs 6

Australian July employment report came mixed, with the employment change at 27.9k vs 20k exp and 14k prior, with full time job creation at -20.3k vs 69.3k (revised higher) last, while part time jobs came at 48.2k vs -48k last. The participation rate ticked higher to 65.1%, while the unemployment rate was 5.6%vs 5.6% exp and 5.7% (revised from 5.6%) lastJULY KEY POINTSTREND ESTIMATES (MONTHLY CHANGE) Employment increased 26,000 to 12,196,900. Unemployment decreased 1,800 to 726,000. Unemployment rate remained steady at 5.6%. Participation rate increased by less than 0.1 pts, but remained at 65.0% in rounded terms. Monthly hours worked in all jobs increased 5.2 million hours (0.3%) to 1,696.4 million hours.SEASONALLY ADJUSTED ESTIMATES (MONTHLY CHANGE) Employment increased 27,900 to 12,201,400. Full-time employment decreased 20,300 to 8,342,300 and part-time employment increased 48,200 to 3,859,100. Unemployment increased 1,100 to 730,600. The number of unemployed persons looking for full-time work decreased 3,800 to 496,400 and the number of unemployed persons only looking for part-time work increased 4,900 to 234,200. Unemployment rate decreased by less than 0.1 pts to 5.6% Participation rate increased by 0.1 pts to 65.1%. Monthly hours worked in all jobs decreased 14.4 million hours (0.8%) to 1,690.4 million hours.  

Australia Participation Rate above forecasts (65%) in July: Actual (65.1%)

Australia Part-time employment increased to 48.2K in July from previous -48K

Australia Fulltime employment declined to -20.3K in July from previous 62K

Australia Unemployment Rate s.a. meets expectations (5.6%) in July

Australia Employment Change s.a. registered at 27.9K above expectations (20K) in July

Remarks from the White House Chief Strategist Steve Bannon crossed the wires earlier today, via Reuters, as he expressed his views on China, Korea, an

Remarks from the White House Chief Strategist Steve Bannon crossed the wires earlier today, via Reuters, as he expressed his views on China, Korea, and his enemies in the Trump administration in an interview with the American Prospect.Key Quotes:                              "We're at economic war with China." "It's in all their literature. They're not shy about saying what they're doing. One of us is going to be a hegemon in 25 or 30 years and it's gonna be them if we go down this path. On Korea, they're just tapping us along. It's just a sideshow." “To me, the economic war with China is everything. And we have to be maniacally focused on that. If we continue to lose it, we're five years away, I think, ten years at the most, of hitting an inflection point from which we'll never be able to recover.”

The People's Bank of China [PBOC] set the Yuan reference rate at 6.6709 vs. Wednesday's fix of 6.6779.

The People's Bank of China [PBOC] set the Yuan reference rate at 6.6709 vs. Wednesday's fix of 6.6779.

The US 10-year yield fell on Wednesday as the dovish Fed minutes, Trump's decision to disband key business advisory councils and a weak housing starts

The US 10-year yield fell on Wednesday as the dovish Fed minutes, Trump's decision to disband key business advisory councils and a weak housing starts number boosted demand for the Treasuries.  The benchmark yield fell by 4 basis points to 2.22%; its biggest one-day decline since July 26. The decline marked a failure to hold above the 100-DMA and 50-DMA levels. The daily chart also shows the falling top formation, which indicates further losses could be on the cards.  Treasury prices rallied [yields dropped] after the Fed minutes showed the policymakers are increasingly wary about recent weak inflation and some called for halting interest rate hikes until inflation shows signs of life.  The speculation that the Fed may be forced to slow down the pace of the monetary policy tightening pushed up the Treasury prices.  The curve between the 10-yr yield and the 2-yr yield fell to 89 basis points from 92 basis points. The flattening of the yield curve is dollar bearish. 

Currently, USD/JPY is trading at 110.08, down -0.12% on the day, having posted a daily high at 110.24 and low at 109.89. Summertime market's mood sou

Currently, USD/JPY is trading at 110.08, down -0.12% on the day, having posted a daily high at 110.24 and low at 109.89.Summertime market's mood soured by Trump - ANZUSD/JPY fell from 110.95 to 110.03 overnight after not only the FOMC minutes, but earlier in the session the move commenced after Trump disbanded two business advisory councils following CEO defections, and again after the FOMC minutes. Subsequently, US 10yr treasury yields fell from 2.28% to 2.22%, 2yr yields from 1.36% to 1.32% while Fed fund futures yields slipped, pricing the chance of a December rate hike at around 43% (from 47%), as noted by analysts at Westpac.FOMC minutes reviewed by Westpac analysts:"In the FOMC minutes of the July meeting, "most" officials see inflation picking back up to 2% over the next couple years and "many" see recent low inflation as a function of idiosyncratic factors, signalling that the central mass at the Fed continues to favour another hike before the year is out. That said, Fed cohesion on this front seems weaker than previously, the more cautionary group now amounting to "some". They argue the Fed can "afford to be patient", while "several" indicate that the risks to inflation could be tilted to the downside and "many" see some likelihood that inflation could remain below 2% for longer. With this group apparently larger and more vocal than past meetings, markets are reading the minutes with a dovish bias. On the balance sheet, "several" are agitating for a July start but "most" prefer to defer a decision until the next meeting (i.e. Sep 20)," USD/JPY levelsFrom a technical point of view, Valeria Bednarik, chief analyst at FXStreet explained that the pair reverted most of its Tuesday's gains, and seems poised to fall further, particularly on a break below the psychological 110.00 threshold.  "In the 4 hours chart, the price broke below its 100 SMA with a strong volume candle, while technical indicators pulled back from overbought levels and approach their mid-lines almost vertically, supporting the case of a downward extension for the upcoming hours."

The developers behind Segwit2x have scheduled another hard fork or split in November, which may end up creating the third version of Bitcoin. As per

The developers behind Segwit2x have scheduled another hard fork or split in November, which may end up creating the third version of Bitcoin. As per CoinDesk report, “the Segwit2x team plans to enable Bitcoin's miners to elect to run new software at block 494,784 on the blockchain, a block they expect will occur sometime in November of this year.”

AUD/JPY ran into resistance at 87.44 [50% Fib retracement of the drop from 89.42 to 85.45] yesterday before retreating slightly to 87.18 levels in Asi

AUD/JPY ran into resistance at 87.44 [50% Fib retracement of the drop from 89.42 to 85.45] yesterday before retreating slightly to 87.18 levels in Asia.  The Aussie data due at 01:30 GMT is expected to show the jobless rate held unchanged at 5.6%. The economy is expected to have added 20K jobs. Traders would also keep an eye on the part time and full time employment numbers.  Australia employment growth has been far stronger this year than in 2015 and 2016. The leading labor market indicators have continued to strengthen. Thus, the bar of expectations has been set high. The demand for the Aussie dollar would spike if the data shows a big jump in the full time jobs number.  On the other hand, an unexpected decline in the jobs number may not be well received by the markets. The AUD / JPY cross was last seen trading around 87.26 levels. AUD/JPY Technical LevelsA break above 87.44 [50% Fib R] would open doors for 88.02 [Aug 7 high] and 88.23 [Aug 3 high]. On the downside, breach of support at 86.88 [10-DMA] could yield a pullback to 86.67 [5-DMA] and 86.48 [50-DMA].   

 Analysts at Nomura offered their projection for today's USD/CNY fix. Key Quotes: "Our model1 projects the fix to be 16 pips lower than the previous

 Analysts at Nomura offered their projection for today's USD/CNY fix.Key Quotes:"Our model1 projects the fix to be 16 pips lower than the previous fix (6.6763 from 6.6779) and 192 pips lower than the previous official spot USD/CNY close of 6.6955. The basket implied change is 253 pips lower than the previous official spot USD/CNY close (6.6702 from 6.6955)."

Australian jobs report (July) Australia's monthly jobs report is back on the cards for Asian markets today. The report will be released at 0130 GMT. 

Australian jobs report (July)Australia's monthly jobs report is back on the cards for Asian markets today. The report will be released at 0130 GMT.  The employment change is expected to be positive by 20K and the unemployment rate to remain unchanged at 5.6%. "Will this report be as strong as previous?" is the question markets are asking. "While the labour market numbers have been particularly strong over recent months, ongoing solid growth in job ads and elevated business conditions suggest that the strength is likely to continue in the near term," argued analysts at ANZ. Meanwhile, analysts at Westpac suggest that the marlet has seen the low in unemployment and they expect it to hold around 5.6% until it starts to drift higher as we move into 2018. "Robust employment growth is drawing workers back into the labour force (and/or holding more in the labour force), lifting participation and preventing any near term dip in unemployment," explained the analysts, adding, " . . . for July, strong employment should again be associated with higher participation. At 65.1% participation should lift the labour force enough to hold unemployment at 5.6%."How could the data affect AUD/USD?Anything either side of what is expected throughout the report is likely to have an effect on the price of the Aussie, but it would be expected to rally on an inline report also while based above 0.7820 support. However, anything significantly disappointing could really bring about some damage to the Aussie crosses especially given how weak the dollar is from overnight supply post-Trump politics news and the FOMC minutes that show how divided the policy makers are over the inflationary outlook in the US economy.   While supports come as 0.7920, 0.7880, 0.7832, 0.7818, 0.7807 and 0.7760, only above the 0.8065 level the 0.8162/66 May 2015 peak and 50% retracement can be seen, according to analysts at Commerzbank. "Above there lies the 0.8295 January 2015 high. The longer term outlook is positive. The market has broken higher from a large triangle formation that targets eventually 0.8715 (one year + target)," argued the analysts. Key notesFOMC meeting minutes: a robust debate on inflation - NomuraAbout the Employment ChangeThe Employment Change released by the Australian Bureau of Statistics is a measure of the change in the number of employed people in Australia. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. Therefore, a high reading is seen as positive (or bullish) for the AUD, while a low reading is seen as negative (or bearish).
 

Japan Adjusted Merchandise Trade Balance above forecasts (¥195.3B) in July: Actual (¥337.4B)

Japan Foreign bond investment dipped from previous ¥1624.2B to ¥-145.5B in August 7

Japan Merchandise Trade Balance Total above expectations (¥392B) in July: Actual (¥418.8B)

Japan Foreign investment in Japan stocks declined to ¥-302.5B in August 7 from previous ¥-37.7B

Japan Imports (YoY) below forecasts (17%) in July: Actual (16.3%)

Japan Exports (YoY) registered at 13.4%, below expectations (13.6%) in July

Analysts at ANZ explained that markets initially traded with a positive tone overnight, though trading was thin, as is typical of this time of year.

Analysts at ANZ explained that markets initially traded with a positive tone overnight, though trading was thin, as is typical of this time of year.Key Quotes:"However, the mood was soured somewhat by Trump’s move to dissolve two business councils (before they could disband, seemingly), as it was seen as indicating the hurdles for Trump’s business agenda continue to grow. The reaction to the Fed minutes was also mixed. Equity markets in Europe continued their move higher with the DAX and CAC 40 up 0.7% and the FTSE up 0.7%, but US equities lost steam in response to Trump’s decision and then the FOMC minutes, with the S&P 500 up just 0.1% at the time of writing. Bond markets rallied into the FOMC minutes and then held their highs (see below for Fed commentary). The benchmark US 10-year Treasury yield is currently down 5bps. Oil was lower (WTI spot -1.5% at USD46.90/bbl at the time of writing) despite EIA reported crude oil inventories being down 8.94m barrels. Gold was up 0.8% to $1282/oz."

Analysts at Westpac offered their outlook for AUD/NZD and rates. Key Quotes: "AUD/NZD 1 day: The two-week old rally remains intact, targeting the 1.

Analysts at Westpac offered their outlook for AUD/NZD and rates.Key Quotes:"AUD/NZD 1 day: The two-week old rally remains intact, targeting the 1.0900 area next, but today’s AU jobs data poses two-way risks. AUD/NZD 1-3 month: A retest of the 1.0900 area seen in May is possible if iron ore’s rally since mid-June continues and global risk sentiment remains elevated. (8 Aug) AU swap yields 1 day: The 3yr should open around 2.04%, the 10yr around 2.82%. AU swap yields 1-3 month: Our RBA outlook (on hold for some time) is anchoring short-maturity interest rates and should keep 3yr swap rates in a 1.8% to 2.3% range, as long as core inflation remains below 2%. Longer maturity rates will largely follow US rates. (8 Aug) NZ swap yields 1 day: NZ 2yr swap rates should open down 1bp at 2.17%, the 10yr down 2bp at 3.15%, in response to US interest rates movement overnight. NZ swap yields 1-3 month: Our RBNZ outlook (on hold throughout 2018) is anchoring is anchoring short-maturity interest rates and should keep 2yr swap rates in a 2.1% to 2.6% range, as long as inflation remains below 2%. Longer maturity rates will largely follow US rates."

New Zealand Producer Price Index - Output (QoQ) above forecasts (0.7%) in 2Q: Actual (1.3%)

New Zealand Producer Price Index - Input (QoQ) registered at 1.4% above expectations (0.9%) in 2Q

Currently, NZD/USD is trading at 0.7309, down -0.07% on the day, having posted a daily high at 0.7317 and low at 0.7309. NZD/USD has been consolidati

Currently, NZD/USD is trading at 0.7309, down -0.07% on the day, having posted a daily high at 0.7317 and low at 0.7309. NZD/USD has been consolidating the sharp reversal to 0.7318 overnight and targets 0.7350 for the day if the US dollar remains under pressure according to analysts at Westpac. FOMC Minutes: Policymakers agreed a fall in longer-term inflation expectations would be undesirableThe FOMC minutes gave rise to a weaker dollar and lower yields in addition to Trump who disbanded two business advisory councils following CEO defections. While there are no significant domestic risks ahead, other than PPI, the Aussie jobs report will be in focus today and this event could give rise to some volatility in the antipodeans. That data comes ahead of the July industrial production in the US that is expected to increase 0.3% following a 0.4% gain in the previous month. NZD/USD 1-3 month:  Further out, the analysts at Westpac argued that if the RBNZ remains firmly on hold, as we expect, and the US dollar rises on tighter Fed policy, then NZD/USD could fall as far as 0.69 by year end. NZD/USD levelsTo the upside, 0.7330 and 0.7370 (9th Aug high) are the first resistance areas on a break of current consolidation below 0.7320. To the downside, 0.7205, the 06 June 22/21 lows and 0.7186 June 15 low along with the 50% of the move up from the 2017 low (May low) at 0.7187 are key areas of support ahead of 0.7150 June 5 high; 0.7127 June 6 low and 0.7100.

Analysts at Nomura explained that the minutes from the July FOMC meeting showed two things about the Committee’s thinking in July.  Key Quotes: "Fir

Analysts at Nomura explained that the minutes from the July FOMC meeting showed two things about the Committee’s thinking in July. Key Quotes:"First, while some members were ready to announce the balance sheet adjustment at that meeting, “most preferred to defer that decision until an upcoming meeting”, i.e. September. This supports expectations of an announcement at the upcoming meeting next month on 19-20 September. Second, the minutes contained a robust debate on how to interpret the recent soft readings of inflation and the inflation outlook.  We think this second development is of higher importance as its resolution will likely determine the future path of the policy rate. Although, the minutes stated that “Most [participants] continued to anticipate that inflation would stabilize around the Committee’s 2 percent objective over the medium term,” concerns over the near-term inflation outlook are becoming high. According to the minutes, "some" participants wanted to see inflation pick up before hiking while "some others" were worried about potential negative outcomes arising from a delay in the pace of raising rates, such as higher inflation. It looks like the Committee was relatively split over the stance toward future rate hikes. The rates-related decision depends on data developments, including inflation data and financial variables such as long-term treasury yields. We maintain our call for a December rate hike but it has become slightly more uncertain, depending on inflation developments and financial conditions."

Analysts at Westpac offered a market wrap. Key Quotes: "Global market sentiment: The US dollar and bond yields fell after Trump disbanded two busine

Analysts at Westpac offered a market wrap.Key Quotes:"Global market sentiment: The US dollar and bond yields fell after Trump disbanded two business advisory councils following CEO defections, and again after the FOMC minutes. Interest rates: US 10yr treasury yields fell from 2.28% to 2.22%, 2yr yields from 1.36% to 1.32%. Fed fund futures yields slipped, pricing the chance of a December rate hike at around 43% (from 47%). Currencies: The US dollar index is down 0.3% on the day, EUR bounced off 1.1682 to 1.1779. USD/JPY fell from 110.95 to 110.03. Outperformer AUD rose from 0.7840 to 0.7927. NZD rose from 0.7235 to 0.7315. AUD/NZD probed higher from 1.0820 to 1.0868 – a four-month high.Economic WrapIn the FOMC minutes of the July meeting, "most" officials see inflation picking back up to 2% over the next couple years and "many" see recent low inflation as a function of idiosyncratic factors, signalling that the central mass at the Fed continues to favour another hike before the year is out. That said, Fed cohesion on this front seems weaker than previously, the more cautionary group now amounting to "some". They argue the Fed can "afford to be patient", while "several" indicate that the risks to inflation could be tilted to the downside and "many" see some likelihood that inflation could remain below 2% for longer. With this group apparently larger and more vocal than past meetings, markets are reading the minutes with a dovish bias. On the balance sheet, "several" are agitating for a July start but "most" prefer to defer a decision until the next meeting (i.e. Sep 20). US housing starts fell 4.8% in July (vs +0.4% expected). The weakness is mostly a multi/high rise story, that sector down 15.3%. Single family housing starts fell 0.8% after an 8.2% gain in the prior month. Building permits fell 4.1% (vs -2.0% expected)."