Market themes of the Day: The Bank of England parliamentary testimony and US activity gauge headline

Mario Blascak, PhD Independent Analyst

What you need to know before markets open

Main themes:

Emerging market crisis spreads from Turkey to Argentina with Argentina unveiling emergency austerity measures, including grain export taxes.
The Bank of England Governor Mark Carney, Chief Economist Andy Haldane and MPC members Silvana Tenreyro and Michael Saunders will testify before parliament's Treasury Committee. Watch out for any comments on whether to expect further hikes in the short term while British media speculate on UK government seeking the way how to prolong the term for Mark Carney in the office.

Australia

The Australian Dollar fell to a 20-month low at 0.7165 after the retail sales report missed the expectations.
The RBA left the Cash rate unchanged at 1.50% in line with the market expectations mentioning depreciation of the Australian Dollar, especially against US Dollar.

Europe

German manufacturing PMI decreased to 55.9 in August amid a slowdown in new order growth.
The Eurozone PMI remained flat at 54.6 in August.

The UK manufacturing PMI fell o 25-month low of 52.8 in August as job creation slows to near-stagnation.
The UK construction PMI is expected to fall to 54.9 in August, down from 55.8 in July.
The UK parliament's Treasury Committee holds Inflation report hearing at 12:15 GMT. The Bank of England Governor Mark Carney and several Monetary Policy Committee members testify on inflation and the economic outlook before for several hours.

US & Canada

The US and Canada were off on Monday celebrating Labor Day holiday.
The manufacturing PMI from the US ISM is expected to slow down in August. For details read my Preview here.

Author

Mario Blascak, PhD

Independent Analyst

Dr. Mário Blaščák worked in professional finance and banking for 15 years before moving to journalism. While working for Austrian and German banks, he specialized in covering markets and macroeconomics.

AUD/USD consolidates above 0.7200 after hot Chinese CPI data

AUD/USD is extending its consolidative price action above 0.7200 during the Asian session on Wednesday, uninspired by hot Chinese CPI and PPI data. Meanwhile, rising RBA rate-hike bets act as a tailwind for the Aussie amid Yen-inspired US Dollar weakness. Traders await the release of US inflation figures later in the week for fresh impetus.

USD/JPY stays in red near 153.50 amid aggressive BoJ hike bets

USD/JPY keeps the bearish tone intact at around 153.50 during European trading hours on Wednesday. A strong Reuters Tankan business survey adds to the case for continued BoJ policy normalisation and supports the Japanese Yen. This, along with a broadly weaker US Dollar, keeps the pair close to a nearly seven-month low set on Tuesday.

Gold recovers further from one-week low, retakes $4.400 amid sustained USD selling

Gold builds on its intraday recovery from a one-week low and reclaims the $4,400 mark heading into the European session on Wednesday. The commodity, for now, seems to have snapped a three-day losing streak amid a weaker US Dollar, which remains depressed near its lowest level in over two weeks amid the Bank of Japan-inspired rally in the Japanese Yen.

Pi Network's rebound holds as momentum improves

Pi Network (PI) extends its recovery on Wednesday, trading above $0.098 after finding support around the 50-day Exponential Moving Average earlier this week. The rebound comes as the Pi Core Team highlights the importance of strengthening its developer ecosystem to expand application-level utility across the network.

Oil, Apple and JPY in focus

Oil prices are rising on Wednesday as tit-for-tat strikes between Iran and the US threaten oil supplies as the two sides battle for control of the Strait of Hormuz. Stock futures have switched their attention from a strong earnings season to the challenges ahead, including a 10-year Treasury yield that is hovering close to the 4.8% level.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.