Forex today was subdued ahead of tonight's Jackson Hole speeches, although US bond yields and the DXY managed a slight bid finishing higher for the session.
Low volumes ahead of the speeches tomorrow were to be expected and the DXY only managed to close 0.1% higher on the day while US 10yr treasury yields rose from 2.17% to 2.19%. Again, the Fed's fund futures yields priced the chance of a December rate hike at around 38%.
Markets remained concerned about the prospects of a government shutdown in September and that has held up the advance in the greenback today. The euro was able to drift higher to score a fresh high vs the US dollar despite the potential that Draghi might not deliver in tomorrow's speeches. The yen rose from 109.05 to 109.46 and Sterling dropped below the 1.28 handle to a low of 1.2790 from 1.2836. The Aussie and Kiwi were contained, despite a prevalent performance in copper that spiked to a 3-year high. WTI dropped a $1.00 on concerns over next month's potential inventory data building while awaiting Hurricane Harvey to hit Mexico/Southern Texas as a threat to onshore refineries.
Key events in Asia:
Japan: Jul CPI is expected to rise 0.4%yr – a steady read since Mar. Annual core inflation has also been flat since Apr but is seen to tick up to 0.1%yr. Inflation pressures remain benign though Q2 GDP figures indicate a lift in domestic demand.
Key notes from US shift
US Existing Home Sales: Market imbalance holds down sales activity - Wells Fargo
U.S. House Speaker Ryan: Will pass legislation to ensure we pay our debts
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