The dollar held broadly steady on Asia trading

Good morning,

- The dollar held broadly steady on Asia trading.

- Asian shares - excepts Japan - fell close to this year's lows thanks to a deepening selloff in commodities and fresh concerns over growth in China.

- $AUD was the best performing major vs $USD last week with +0.54% spot returns, $EUR was the worst performing with -0.94% returns.

- China manufacturing PMI falls to two-year low in July. July data signaled that the downturn in China’s manufacturing sector intensified at the start of the third quarter. Renewed falls in both total new work and new export orders led manufacturers to cut production at the fastest rate since November 2011. Softer client demand and reduced output requirements contributed to further job shedding and lower purchasing activity, with the latter declining at the sharpest rate since January 2012.

- The ANZ's monthly report shows the number of jobs ads fell in July, with the trend growth rate slowing continuously since its recent peak in Sept/Oct 2014. The number of jobs advertised on the internet and in newspapers have fallen, the ANZ's monthly survey has found.

- This week’s NFP and the BoE’s policy trifecta, also known as the ‘Super Thursday’, when the August Inflation report, rate decision and minutes will be released in one go, should encourage further frontloading of rate-hike expectations. This should support USD and, to a lesser degree, GBP. At the same time, more dovish rhetoric from the RBA or potential disappointments from the upcoming Australian tier-one data releases could keep the pressure on AUD.

- GDP surge should not blind us to the dangers of an interest rate rise. George Osborne has repeatedly promised to fix the roof while the sun is shining, and after official figures last week showed GDP growth picking up sharply in the second quarter, it seemed that the clouds have finally lifted. With the Bank of England’s policymakers due to meet on Thursday, the news that the slowdown in the first quarter was just a blip sent traders scrambling to price in an interest rate rise in the coming months. Official figures showed growth rebounded to 0.7% after the surprisingly weak 0.4% pace in the opening months of this year.

- EUR/USD: Corrective/Messy; USD/CAD: Next Target - Goldman Sachs.Corrective markets tend to be messy and difficult which is very much the case for EUR/USD, notes Goldman Sachs Techs. "The rally from Mar. 16th to May 15th met a 1.618 extension target at 1.1482. The decline since May 15th is approaching a 1.00 extension target at 1.0790," GS adds. "From this point onwards, would expect to see another minor ABC/5-wave movedevelop from the 1.0790 low. A possible ABC from the Jul. 20th low extends out to 1.1216. A break above that point will increase the chances of eventually reaching 1.1414-32 (1.618 from Jul. 20th and a 0.618 extension from Mar. ‘15)," GS projects. Turning to USD/CAD, GS thinks that the next likely upside target is ~1.3168-1.3171 as this includes an extension from the ‘11 low and 1.618 from May ‘15.

- New Zealand's Treasury: Data shows growth slowing faster than forecast, still see growth around trend in 2015. What's more, Fed's Powell is scheduled to speak on bond market liquidity today/ That is going to be interesting.

- Greek shares 'set to plunge 20%' as stock exchange reopens. Takis Zamanis, chief trader at Beta Securities, is among the pessimists. "The possibility of seeing even a single share rise in today's session is almost zero," he said.

- Crude oil continued to flounder after posting its biggest monthly drop since 2008 in July on China's stock market slump and signs that top Middle East producers were pumping out crude at record levels. The Reuters commodity index fell 10.8 percent in July, its biggest monthly fall since September 2011.

- Watch for today: Spain PMI, US income, US ISM.

Have a nice Week!