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A pre-NFP lull was in full-force and kept major currencies in tight ranges with an extra blip or two for the comdolls.

  • AU AIG services index slips from 63.0 to 53.6 in July
  • AU retail sales grows by 0.4% vs. 0.3% expected, 0.4% previous
  • China’s Caixin services PMI down from 53.9 to 52.8 in July

Major Events/Reports:

Australia’s retail sales

Retail spending inched 0.4% higher in Australia in June, which marks the sixth consecutive monthly growth for the report.

The 0.4% increase is about the same as in May but it exceeded analysts’ expectations of a 0.3% uptick.

A closer look tells us that spending increased for food retailing (+0.4%), household goods (+0.4%), clothing, footwear and personal accessory (+1.7%), and cafes, restaurants and takeaways (+0.9%).

The upside surprise is a relief for the Reserve Bank of Australia (RBA), which recently shared its worries over high household debt surpassing the pace of household income.

More devaluation from PBoC

Another day, another chance to weaken the yuan!

The People’s Bank of China (PBoC) set its onshore yuan reference rate at 6.8322 today, higher than yesterday’s 6.8293 fix.

The move came after U.S. officials confirmed that the Trump administration is thinking of upping tariffs on an additional $200B worth of Chinese goods.

Offshore and onshore traders were already pricing in a weaker yuan fix, but the confirmation extended their intraday trends.

Mixed market reaction

Performance by strong tech stocks during the U.S. session spilled over some into the Asian bourses, but the U.S.-China trade war still remained front and center for investors.

Remember that the U.S. imports more products from China than China does from the U.S., so market players believe that the world’s second-largest economy (and a lot of the Asian markets) have more to lose in the tariff wars.

  • Nikkei is up by 0.04% to 22,521.2
  • A SX 200 is down by 0.51% to 6,228.5
  • Shanghai index is up by 0.08% to 2,770.142
  • Hang Seng is down by 0.13% to 27,679.6

Commodities were kept in tight ranges though U.S. crude oil prices extended its gains on speculations that U.S. stockpiles will drop back down after a surprise spike last week.

  • Gold is down by 0.02% to $1,207.23
  • Brent crude oil is down by 0.01% to $73.37
  • U.S. WTI is up by 0.13% to $69.01

Major Market Mover(s):

AUD

AUD/USD is up by 10 pips (+0.13%) to .7370; AUD/CHF is up by 12 pips (+0.17%) to .7337; AUD/JPY is up by 15 pips (+0.17%) to 82.32; GBP/AUD is down by 20 pips (-0.11%) to 1.7664, and EUR/AUD is down by 11 pips (-0.07%) to 1.5727.

NZD

NZD/USD down by 11 pips (-0.17%) to .6731; NZD/JPY is down by 8 pips (-0.11%) to 75.19; GBP/NZD is up by 41 pips (+0.21%) to 1.9340; NZD/CAD is down by 19 pips (-0.21%) to .8760, and AUD/NZD is up by 38 pips (+0.35%) to 1.0948.

Watch Out For:

  • 6:45 am GMT: France’s government budget balance
  • 7:15 am GMT: Switzerland’s CPI (-0.3% expected, 0.0% previous)
  • 7:15 am GMT: Spain’s services PMI to remain at 55.4?
  • 7:45 am GMT: France’s final services PMI expected to maintain 55.3 reading
  • 7:50 am GMT: Germany’s final services PMI still seen at 54.4
  • 7:55 am GMT: Euro Zone’s final services PMI to remain at 54.4?
  • 8:00 am GMT: Italy’s industrial production (0.4% expected, 0.7% previous)
  • 8:30 am GMT: U.K.’s services PMI (54.7 expected, 55.1 previous)
  • 9:00 am GMT: Italy’s retail sales (0.1% expected, 0.8% previous)
  • 9:00 am GMT: Euro Zone retail sales (0.4% expected, 0.0% previous)
  • NFP report on tap today. Read Forex Gump’s preview!