Articles

The PBOC set the USDCNY midpoint at 7.1124. That is the strongest level since June 13.

The estimate was 7.1116. The prior was at 7.1299.

This article was written by Greg Michalowski at www.forexlive.com.

Australia’s S&P/ASX200 index and Japan’s Nikkei are trading higher by about 0.36% in early trading.

Japan’s retail sales came in weaker than expected at 2.6% versus 2.8%. Duction was also weaker at 2.8% versus 3.6% forecast. The unemployment rate was also higher at 2.7% versus 2.5%.

So weaker than expected data from manufacturing and for the consumer.

On the price side, Tokyo core CPI came in higher than expected at 2.4% versus .2% estimate.

THe USDJPY has dipped to new lows in the current hour but remains in the middle of the 100-hour MA below at 144.46, and the 200 hour MA at 145.124. The current price is at 144.83 after trading as low as 144.74

For the AUDUSD, it is trading in a 8 pip trading range for the new trading day. The sideways price action is allowing the 100 hour MA (rising) to start to catch up to the price. The 100 hour MA comes in at 0.6786 the current price is at 0.6795. Yesterday and on Wednesday, the low prices found support buyers against the 100 hour MA – keeping the buyers in more control. It will take a move below to increase the bearish bias technically.

This article was written by Greg Michalowski at www.forexlive.com.

• Prior month 3.8%
• Retail sales for July 2.6% vs 2.9% estimate

The USDJPY is little changed.

This article was written by Greg Michalowski at www.forexlive.com.

• Prior month -4.2%
• Industrial production MoM 2.8% vs 3.3% estimate
• Industrial Production YoY 2.6% vs 2.9% estimate. Previously 3.7% revised from 3.8%
• IP forecast 2 month ahead (Sept) -3.3% vs Prev 0.7%
• IP Forecast 1 month ahead (Aug) 2.2% vs prev 6.5%

This article was written by Greg Michalowski at www.forexlive.com.

• Iraq cancelled a spot cargo of 1 million barrels in August to reduce exports

Iraq produced around 4.25 million barrels per day in July but there has been significant variance in the past year, though rarely as low as 3.85-3.9m bpd.

This article was written by Adam Button at www.forexlive.com.

Tokyo CPI for August 2024

• Excluding Fresh Food & Energy 1.6 % y/y vs 1.1% last month
• Excluding Fresh Food 2.4% y/y vs 2.2% est. Prior month 2.2%
• Headline CPI 2.6% vs 2.2% last month

The higher Tokyo inflation is not having a big impact on the USDJPY.

The range for the day is only about 20 pips from the high to the low. The price remains stuck between the 200 hour MA above at 145.13 and the 100 hour MA below at 144.45. The current price is trading at 145.03.

This article was written by Greg Michalowski at www.forexlive.com.

• Prior month 2.5%
• Job/Applicants ratio 1.24 versus expected 1.23. Previous 1.23

This article was written by Greg Michalowski at www.forexlive.com.

• Prio rmonth -17.0% revised from -13.8%)
• Building consents for July 26.2%

The bounce back gain is the largets since May 2020. Last months decline was the largest since February 2021.

Looking at the history, the ups-and-downs are pretty evident.

This article was written by Greg Michalowski at www.forexlive.com.

In geopolitical news:

• Ukraine is reportedly conducting drone attacks on Russia’s Belgorod, Boronezh and Kirsk provinces.

This article was written by Greg Michalowski at www.forexlive.com.

At the resumption of trading in the futures market, the e-mini S&P contract is up 0.16%. Dell reported after the closing shares are currently up 2.95%. Nvidia which notes their earnings yesterday after close is trading up 0.42% after declining -6.38% today.

• Apple shares are trading up 0.13% after rising 1.46% yesterday
• Meta is trading up 0.07% after rising you .28% yesterday.
• Microsoft is trading up 0.14% after rising by 0.61% yesterday
• Amazon is trading unchanged after rising 0.77% yesterday
• Alphabet is trading up 0.15% after falling -0.66% yesterday
• Tesla is up 0.18% after rising 0.26% yesterday

Gold is little changed and up $0.38 or 0.02% $2520.97

Bitcoin is trading down around $210 and $58,900

This article was written by Greg Michalowski at www.forexlive.com.

The economic releases today will be highlighted by Japan retail sales along with Tokyo core CPI. Australia will also release retail sales. Below is a list of the economic releases in the Asia-Pacific session.

• 06:45pm NZD (a): Building Consents m/m – Previous -13. 8%
• 7:30pm JPY (m): Tokyo Core CPI y/y – Forecast: 2.2%, Previous: 2.2%
• 7:30pm JPY (a): Unemployment Rate – Forecast: 2.5%, Previous: 2.5%
• 7:50pm JPY (a): Prelim Industrial Production m/m – Forecast: .6%. Previously -4.2%
• 7:50pm JPY (a): Retail Sales y/y – Forecast: 2.8%, Previous: 3.7%
• 9:30pm AUD (fij): Retail Sales m/m – Forecast 0.3%,Previous: 0.5%
• 9:30pm AUD (a): Private Sector Credit m/m – Forecast: 0.5%, Previous: 0.6%

This article was written by Greg Michalowski at www.forexlive.com.

• US Q2 GDP second estimate +3.0% vs +2.8% expected
• US initial jobless claims 231K vs 232K expected
• US July advance goods trade balance -102.66 billion vs -96.56 billion prior
• ECB’s Nagel: Timely return to price stabilty cannot be taken for granted
• US sells seven-year notes at 3.770% vs 3.761% WI
• Fitch affirms USA credit rating at AA+ with a stable outlook
• SNB’s Jordan: Price stability is a crucial precondition for growth and prosperity
• Fed’s Barkin: Inflaiton is down but we’re not there yet
• US July pending home sales -5.5% vs +0.4% expected
• Iraq plans to cut oil output to 3.85-3.9 million barrels per day in Sept – report
• US preliminary wholesale inventories for July 0.3% versus 0.2% estimate
• Canada Q2 current account -8.48 billion vs -5.85 billion
• September seasonals: The worst month on the calendar for the S&P 500

Markets:

• Gold up $19 to $2521
• US 10-year yields up 2.9 bps to 3.87%
• WTI crude oil up $1.54 to $76.06
• S&P 500 flat at 5589
• NZD leads, CHF lags

The US dollar got a big lift from GDP and initial jobless claims data, rising around 25 pips on most fronts but gaining a full cent against the yen. Those moves were outsized based on moderately stronger and lagging data, so they might have reflected repositioning and month end. There could also be a front-run of tomorrow’s PCE numbers given the hotter inflation revision in the GDP report, though that should factor into the June revisions, perhaps leaving a higher base for July to draw down on. Time will tell.

The seven-year sale delivered a slight tail but the market took that in stride in contrast to the larger moves on 2s and 5s earlier this week. Later in the day though, the US dollar began to give back gains and eventually gave back most of them, including 75 pips in USD/JPY from the highs.

That wasn’t the final move though as the US dollar got some late bids — particularly against the commodity currencies — on softening equity markets. Ultimately, the dollar finished near the best levels of the session against AUD, CAD and NZD, though still lower on the day.

This article was written by Adam Button at www.forexlive.com.