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Further declines in the Turkish lira and Chinese yuan fanned risk aversion in the market and dragged higher-yielding bets lower across the board.

  • AU Westpac consumer sentiment slips by 2.3% vs. 3.9% growth in July
  • AU quarterly wage price index shows 0.6% increase as expected

Major Events/Reports:

Australia’s data releases

Data from the Land Down Under showed consumer sentiment taking a 2.3% dip and erasing half of its June and July gains in the month of August.

The subdued optimism might have been an adjustment from optimism over the tax cuts announced in May; the price correction in Sydney and Melbourne’s housing markets, and reduced rate hike fears.

For now, ALL index components recorded declines with economic outlook in the next 12 months taking the most hits (-4.9%).

Meanwhile, a separate release showed quarterly wages rising by 0.6% as markets had expected. That’s the best quarterly increase since 2014!

Annualized figures also show wages improving by 2.1%. Take note, however, that inflation is also around the 2.1% mark. The lack of real wage growth, combined with persistent underemployment, certainly make it easier on the RBA to keep its policies steady for longer.

Return of risk aversion

The Turkish lira and Chinese yuan saw extension of their downtrends earlier today, so Asian session traders once again priced in their contagion and overall risk aversion plays.

It also didn’t help that Turkey just doubled its tariffs on U.S. goods including alcohol, tobacco, and passenger cars in what Vice President Fuat Oktay said is a “response to the U.S. administration’s deliberate attacks” on the Turkish economy.

  • Nikkei is down by 1.02% to 22,127.8
  • A SX 200 is up by 0.32% to 6,311.1
  • Shanghai index is down by 1.31% to 2,744.469
  • Hang Seng is down by 1.52% to 27,330.6

Commodity prices were a little more mixed. Gold fell victim to dollar demand, while crude oil prices remained immune to dollar strength and a rise in U.S. crude oil inventories printed in the previous trading session.

  • Gold is down by 0.49% to $1,188.33
  • Brent crude oil is up by 0.21% to $72.31
  • U.S. WTI is up by 0.20% to $66.75

Major Market Mover(s):

AUD

The Aussie was triple roundhouse-kicked by lower copper prices, weak Australian data, and overall risk aversion in the markets.

AUD/USD is down by 35 pips (-0.48%) to .7207; AUD/JPY is down by 35 pips (-0.44%) to 80.14; GBP/AUD is up by 55 pips (+0.32%) to 1.7618; AUD/NZD is down by 22 pips (-0.20%) to 1.0994, and EUR/AUD is up by 44 pips (+0.28%) to 1.5710.

USD

The Greenback extended its uptrend from the previous session as Asian session traders stepped back from higher-yielding bets.

EUR/USD is down by 21 pips (-0.19%) to 1.1323; GBP/USD is down by 18 pips (-0.14%) to 1.2699; USD/CAD is up by 17 pips (+0.13%) to 1.3075, and USD/CHF is up by 20 pips (+0.20%) to .9961.

JPY

A risk-averse trading environment made yen bulls hungry today as they pushed the safe-haven higher against most of its counterparts.

EUR/JPY is down by 17 pips (-0.14%) to 125.91; GBP/JPY is down by 16 pips (-0.11%) to 141.21; CHF/JPY is down by 16 pips (-0.14%) to 111.63, and NZD/JPY is down by 15 pips (-0.20%) to 72.90.

Watch Out For:

  • Italian and French banks closed for Assumption Day holiday
  • 8:30 am GMT: U.K.’s CPI releases. Read our mini trading guide to see what you can expect from the event!
  • 8:30 am GMT: U.K.’s PPI input (0.1% expected, 0.2% previous)
  • 8:30 am GMT: U.K.’s PPI input (0.1% expected, 0.2% previous)