Asian stocks stumbled to a four-month low

Good Morning,

- The euro fell to a 22-month low versus the U.S. dollar and touched $1.2663, the strongest level since November 2012, ahead of the ECB meets on Oct. 2

- Asian stocks stumbled to a four-month low on Monday as political unrest in Hong Kong gives some worries in the market. Hong Kong shares dropped to three-month lows in the worst unrest since China took back control of the former British colony. Japan's Nikkei 0.50%, Hong Kong's Hang Seng -1.75% (07:03 GMT), Korea's Kospi -0.25%, Australia's ASX 200 -0.88% and China's Shanghai 0.49%.

- The dollar index hit a four-year peak in early Asian trade. The index rose as high as 85.779, its highest since July 2010, after having posted an 11th straight week of gains last week, extending the longest winning streak since its 1971 uncoupling from gold.

- Credit Suisse on EUR/USD: Removed our target support zone at 1.2787/55. EURUSD has broken below our core target zone at 1.2787/55 – the 61.8% retracement of the entire 2012/14 bull trend and July 2013 low. We are wary that prices are becoming exhausted near term, and resistance at 1.2785 needs to cap to keep the immediate risk lower to see a direct extension to 1.2662 next, the November 2012 low. Beneath here would aim at the 78.6% retracement of the 2012/2014 uptrend at 1.2460. Bigger picture we would see scope for 1.2215/10, and potentially as far as the 1.2042 low of 2012. Resistance shows at 1.2762/70, then 1.2785, above which can see a move back to 1.2801/16. Beyond here is needed to ease the immediate downside bias for strength back to 1.2839, then 1.2865. CS runs maintains a short EUR/USD following 1.2750 break targeting 1.2662.

- Hedge funds and other large speculators raised net bullish futures bets on the dollar versus eight major peers to 238,056 contracts on Sept. 23, the most in eight months, from 185,458 a week earlier, data from the Commodity Futures Trading Commission showed.

- The U.S. Commerce Department on Friday raised its estimate of gross domestic product growth to an annualized 4.6 percent, the fastest pace in 2-1/2 years, and accelerating from the 4.2 percent reported last month.

- Italian PM Renzi: Italian GDP may contract as much as 0.3% in 2014. Reiterates no new taxes. Italy setting aside eu1.5b for support to fired workers. His government plans to reduce number of labor laws, Italy needs simple, open, flexible labor market.

- Japan’s Abe says they need to keep a cautious watch on impact of sales tax hike. Japan’s economy remains a top priority.

- BOJ’s Kuroda speech: Japan’s economy is expected to continue its moderate recovery trend. Has been some weakness in exports and industrial production. Steady improvement in the employment and income situation has been continuing. Household sentiment has been improving. Firms have been maintaining their proactive stance for business fixed investment as corporate profits have improved.

- New Zealand’s dollar was set for its biggest three-day drop since 2011 after the Reserve Bank said its sales of the currency in August were the most in seven years. The kiwi dropped against all 31 major counterparts as Prime Minister John Key was reported as signaling that the currency needs to be weaker. New Zealand’s currency fell after Prime Minister Key said the so-called Goldilocks level for the nation’s currency is around 65 cents.