Risk aversion continued to permeate the market in NY trading as US stocks took it on the proverbial chin. The overnight bloodbath in Chinese shares carried through to US shares in full force and the S&P slipped -2.4% to 979. The 1000 level once again becomes elusive. The drop in equities was despite a positive tone to US economic data. The NY Empire manufacturing index popped to 12.08 in August after a -0.55 read the prior month. This timely indicator suggests the pulse of the US economy is getting stronger. Furthermore, the NAHB homebuilder index came in at an expected18 in August, rising from 17 the prior month. US Treasuries traded with a bid tone, solidifying the risk adverse tone. The US 10-year slipped more than -10 beeps to 3.46%. Overall, this sentiment left the US dollar better bid.
EUR/USD remained heavy near 1.4080 after knifing down to an intraday low of 1.4045 earlier. The 50-day sma sits at 1.4088 and it looks like a close below is imminent. This opens up potential for more weakness ahead. The yen crosses also traded with a heavy feel and EUR/JPY remained below 133.00 at last look, after making a touch down at 132.51 earlier. This left USD/JPY mostly sideways and the pair was sitting near 94.45 after trading in a 60 pips range all day. The currencies of the resource-based economies managed to recover from their depths as oil staged a comeback off its lows. The commodity rebounded from the $65.23 nadir to sit by $66.70 at the close. This saw USD/CAD grind down to 1.1070/75 from a 1.1125 high while AUD/USD rebounded to 0.8215/20 from an 0.8156 low.
Upcoming Economic Data Releases (Asia Session) prior expected
- 8/18 1:30 GMT AU Reserve Bank's Board July Minutes 18-Aug
- 8/18 5:00 GMT JN Leading Index CI JUN F 79.8 79.9
- 8/18 5:00 GMT JN Coincident Index CI JUN F 87.8 87.9
- 8/18 5:30 GMT JN Tokyo Dept. Store Sales (YoY) JUL -11.40% - -
- 8/18 5:30 GMT JN Nationwide Dept. Sales (YoY) JUL -8.80% - -
