Quick Recap
The recovery in the Kiwi dollar continued overnight as the US dollar suffered a little reversal of fortune. This also helped the Euro climb back above 1.09, and the Aussie regain the 74 cent level. Sterling is stuck waiting for BoE decision tonight.
What drove the US dollar move, and the associated rally in bonds is hard to tell with no obvious catalyst. That is unless you look at the charts where the Kiwi and Aussie recoveries have been building. On the Euro its a similar pattern but I was giving my short another night to clarify…12 hours too many it seems.
Anyway, to stocks and it was a disappointing day in the US and Europe. That’s left the ASX looking like its going to have a down day with the September SPI futures off 27. Earnings in the US weren’t as hot as some expected during the day and the after hours results have added to the negative tone.
So it will be an interesting day today for traders.
Likewise the release of Q2 CPI which the market expects will come in at a stinking 0.8% is important for how people view the RBA. Yesterday’s minutes, which were more positive on unemployment, suggest the RBA might think its work is done.
Also worth noting today is RBA governor Glenn Stevens speech at the Anika foundation. It’s become a scene setter over the years.
– Here’s the overnight scoreboard (8.03am AEST):
- Dow Jones down 1% to 17,919
- Nasdaq down 0.21% to 5,208
- S&P 500 down 0.43% to 2,119
- London (FTSE 100) down 0.29% to 6,769
- Frankfurt (DAX) down 1.12% 11,604
- Tokyo (Nikkei) up 0.9% to 20,841
- Shanghai (composite) up 0.66% to 4,018
- Hong Kong (Hang Seng) up 0.52% 25,536
- ASX Futures overnight (SPI September) -27 to 5,616
- AUDUSD: 0.7424
- EURUSD: 1.0945
- USDJPY: 123.83
- GBPUSD: 1.5551
- USDCAD: 1.2946
- Crude: $50.36
- Gold: $1,101
- Dalian Iron Ore (September): 386
On the day
CPI and Anika in Australi, BoE tonight, existing home sales in the US and then 7am tomorrow we get the RBNZ decision in monetary policy.
CHART OF THE DAY: AUDUSD
There is a recovery in here. I’m long.
We’ve talked about gold the last two days. it remains under pressure but it need to close a day and a week below $1,085 for the decline to accelerate.
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