With not a lot of major data on the docket, Asian session market players turned to the good ol’ global trade war speculations for direction.
- Tokyo’s core CPI (y/y) up by 0.8% vs. 0.7% expected and previous
- Australia’s PPI up by another 0.3% in Q2 2018 vs. 0.5% expected and previous
- France’s flash GDP (q/q) improves by 0.2% vs. 0.3% expected, 0.2% previous
BOJ steps up its bond-buying game
The Bank of Japan (BOJ) surprised markets earlier today when it (a) conducted a special, unlimited bond-buying for a SECOND time in a week and (b) when it LOWERED the level at which it agreed to purchase the sovereign notes by 1 basis point to 0.100%.
The move came after Japan’s 10-year yields shot up to as high as 0.105% earlier in the day. If you recall, the central bank is aiming for a rate of “around zero” for the asset. Yields calmed down to about 0.095% after the BOJ’s “intervention.”
Mixed market sentiment
There were no fresh catalysts to rock the markets today, so Asian session traders turned to the global war story (again) for some movement.
This time they paid attention to the yuan, which the People’s Bank of China (PBoC) set only marginally lower than its previous devaluations. It also helped that state-owned banks were reported to have been buying China’s currency today.
Nikkei and Australia’s ASX saw some optimism even as China’s markets erred on the side of caution.
- Nikkei is up by 0.30% to 22,655.5
- A SX 200 is up by 0.17% to 6,285.6
- Shanghai index is down by 0.06% to 2,880.508
- Hang Seng is down by 0.04% to 28,769.5
Commodity prices were a little more uniform with their movements, with gold taking advantage of a bit of profit-taking from the Greenback’s recent gains while oil prices extended their run from the previous sessions.
- Gold is up by 0.14% to $1,224.10
- Brent crude oil is up by 0.03% to $74.51
- U.S. WTI is up by 0.13% to $69.58
Major Market Mover(s):
China’s equities markets may have been a bit gloomy, but that didn’t stop Aussie bulls from being relieved by large, Chinese state-owned banks buying (and maybe stabilizing?) the yuan’s recent moves. Of course, it didn’t hurt that copper prices also shot up.
AUD/USD is up by 12 pips (+0.16%) to .7389; AUD/NZD is up by 20 pips (+0.18%) to 1.0892; AUD/CHF is up by 10 pips (+0.13%) to .7373; EUR/AUD is down by 16 pips (-0.10%) to 1.5766, and GBP/AUD is down by 27 pips (-0.15%) to 1.7740.
The BOJ’s attempts to send a message of more aggressiveness fell on deaf ears as a bit of risk aversion pushed the yen higher anyway.
USD/JPY is down by 23 pips (-0.20%) to 110.99; EUR/JPY is down by 21 pips (-0.16%) to 129.30; GBP/JPY is down by 29 pips (-0.20%) to 145.49; CHF/JPY is down by 20 pips (-0.18%) to 111.68, and NZD/JPY is down by 13 pips (-0.18%) to 75.29.
Watch Out For:
- 6:00 am GMT: Germany’s import prices (0.3% expected, 1.6% previous)
- 6:45 am GMT: France’s consumer spending (0.6% expected, 0.9% previous)