With no fresh catalyst to price in, Asian session market players took cues from their U.S. counterparts.
- U.K. RICS house price balance up by 2% vs. -3% expected, -2% previous
- AU MI inflation expectations slips from 4.2 to 3.9% in July
Australia’s inflation expectations
Data from Melbourne Institute showed inflation expectations slipping by a bit in July.
The expected inflation rate came in at 3.9%, which is 0.3% lower than June’s 4.2% reading. Luckily for Aussie bulls, traders were more interested in pricing in an overall risk-friendly vibe in the markets.
There were no top-tier reports or fresh catalysts to move the markets, so Asian session market players focused on catching up to their London and U.S. counterparts.
Some priced in Uncle Sam’s upbeat data which, together with FOMC member Evans’ hawkish statement, supported more rate hikes from the Fed this year. Of course, it also didn’t hurt that traders are expecting slightly a faster-than-expected CPI reading from the U.S. later today.
Meanwhile, others focused on taking a chill pill from yesterday’s headlines. If you recall, the U.S. had threatened another batch of tariffs on China’s goods.
The move took markets by surprise, but now some analysts are back to crossing their fingers that cooler heads and negotiations will prevail.
- Nikkei is up by 1.30% to 22,218.2
- A SX 200 is up by 0.91% to 6,283.2
- Hang Seng is up by 0.71% to 28,512.9
- Shanghai index is up by 1.90% to 2,830.443
Commodity prices jumped on the risk-taking bandwagon and saw gains across the board.
- Gold is up by 0.16% to 1,243.95
- Brent crude oil is up by 0.61% to $74.54
- U.S. WTI is up by 0.35% to $70.81
Major Market Mover(s):
The yen gave back some of its gains from the previous day as traders flocked to higher-yielding bets.
USD/JPY is up by 23 pips (+0.21%) to 112.25; EUR/JPY is up by 37 pips (+0.29%) to 85.03; CAD/JPY is up by 25 pips (+0.29%) to 85.03; GBP/JPY is up by 31 pips (+0.21%) to 148.20, and CHF/JPY is up by 28 pips (+0.25%) to 112.74.
The bulls came out to play today as traders took a chill pill from the trade war headlines. Not surprisingly, the Aussie – which also took the heaviest hits on yesterday – saw the biggest gains across the board.
AUD/USD is up by 14 pips (+0.18%) to .7380; AUD/JPY is up by 33 pips (+0.40%) to 82.84; AUD/NZD is up by 24 pips (+0.22%) to 1.0922, and GBP/AUD is down by 32 pips (-0.18%) to 1.7888.
Watch Out For:
- 7:00 am GMT: Germany’s final CPI expected to remain at 0.1%
- 7:45 am GMT: France’s final CPI to maintain 0.1% reading?
- 9:30 am GMT: BOE credit conditions survey
- 10:00 am GMT: Euro Zone industrial production (1.2% expected, -0.9% previous)