News and views
Risk markets generally remained elevated during a quiet European session, trading thinned by the US Labour Day holiday. The Eurostoxx50 equity index closed 0.3% higher, and S&P500 futures ranged sideways at the month high until Europe closed. Commodities recorded modest moves, oil down 0.7% as the summer motoring season ends, copper up 0.5% on an inventory decrease, and other industrial metals also faring well. UK and German 10yr government bonds closed 1-2bp lower in yield.
The US dollar index was quiet after nudging to a fresh month low at the Sydney close. That was when EUR made its intraday high of 1.2920, after which it slid to 1.2867 for a relatively narrow daily trading range. Underperformer GBP saw the most action among the majors, falling from 1.5490 to 1.5345 before recovering to 1.5400. There was talk of a large order to buy EUR/GBP. Apart from a brief dip to 84.04, USD/JPY ranged around 84.00. AUD was confined to a 40 pip range, just eking out a fresh month high at 0.9181 at the European close.
NZD peaked at the same time as the AUD, at 0.7259, before slipping back to 0.7225. AUD/NZD initially declined a half cent to 1.2650 before settling around 1.2690.
No US data to report – Labor Day holiday
European Sentix investor confidence slipped from 8.5 to 7.6 in September. That is still the second highest reading since early 2008. There was modest slippage in both the current situation index and expectations.
Outlook
AUD/USD and NZD/USD outlook next 24 hours: AUD/USD and NZD/USD outlook next 24 hours: AUD major resistance remains 0.9220, the August high. NZD has broken major resistance at 0.7225, and now risks a move to 0.7350.
