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Risk aversion was the name of the game during the Asian session, as investors start to price in the U.S. possibly upping its tariff game on China’s goods as soon as this week.

  • New Zealand’s overseas trade index (q/q) improves by 0.6% vs. 1.1% expected, -2.0% previous
  • Japan’s capital spending up by 12.8% in Q2 2018 vs. 6.6% expected
  • Japan’s final manufacturing PMI unchanged at 52.5 in August
  • Australia’s AIG manufacturing index pops up from 52.0 to 56.7 in August
  • Australia’s MI inflation gauge maintains 0.1% reading in August
  • Australia’s retail sales flat in July vs. 0.3% expected, 0.4% previous
  • Australia’s retail sales flat in July vs. 0.3% expected, 0.4% previous
  • Australia’s ANZ job ads drops by 0.6% vs. 1.4% gain in July
  • China’s Caixin manufacturing PMI slips from 50.8 to 50.6 in August

Major Events/Reports:

Australia’s data dump

Data from the Land Down Under came in mixed, though that didn’t stop Aussie bulls and bears from being all over the place today.

Retail sales slowed from 0.4% to a flat reading in July, which shook traders who had expected a 0.3% uptick for the month.

Thankfully, a quarterly reading of Australian company profits showed a 2.0% gain when many had only seen a 1.3% increase in Q2 2018. Profits in the mining sector still led the gains, though financial services saw the biggest spike during the period.

And then there’s AIG’s manufacturing index, which rebounded from 52.0 to 56.7 in August. Exports slowed down a bit though the employment sub-index grew by 3 points after stagnating in July.

Concerns over U.S.-China trade war renews risk aversion

There were tons of economic data printed earlier today but the U.S.-China trade war remained center stage for a lot of investors.

See, a few days ago Trump threatened that he will impose 25% tariff on as additional $200 billion worth of Chinese goods as soon as the public comment period that ended last Thursday passes.

For newbies out there, know that the Trump administration has already imposed tariffs on $50 billion worth of Chinese exports.

It also didn’t help that today’s set of manufacturing reports already pointed to slower global demand as a result of the U.S. and China’s tariffs.

China’s Caixin manufacturing PMI slowed to a 14-month low; Japan’s manufacturing PMI revealed weaker new export orders, and South Korea’s factory activity contracted for a sixth consecutive month. Yowza!

  • Nikkei is down by 0.67% to 22,711.0
  • A SX 200 is down by 0.44% to 6,232.7
  • Shanghai index is down by 0.94% to 2,699.655
  • Hang Seng is down by 0.95% to 27,623.9

Meanwhile, risk aversion and anticipation of lower demand from China (and other commodity-importing countries) took its toll on commodity prices.

  • Gold is down by 0.17% to $1,199.40
  • Brent crude oil is down by 0.31% to $77.42
  • U.S. WTI is down by 0.37% to $69.61

Major Market Mover(s):

AUD

The Aussie dropped like a rock in early Asian session trading but a strong company profits report as well as a bit of profit-taking ahead of the U.S. Labor Day holiday helped the comdoll recover some of its losses.

AUD/USD is up by 5 pips (+0.06%) to .7194; AUD/NZD is up by 31 pips (+0.29%) to 1.0888; AUD/CHF is up by 14 pips (+0.21%) to .6978, and GBP/AUD is down by 37 pips (-0.21%) to 1.7970.

NZD

The New Zealand dollar wasn’t as lucky as the Aussie. Its high-yielding status made it a target for risk aversion and it stayed weak against some of its major counterparts.

NZD/USD is down by 12 pips (-0.18%) to .6607; NZD/JPY is down by 23 pips (-0.31%) to 72.27, and EUR/NZD is up by 44 pips (+0.25%) to 1.7560.

EUR

There’s no direct catalyst that boosted the common currency against some of its counterparts though its rep of being a safe haven in the European region might have helped some.

EUR/GBP is up by 23 pips (+0.25%) to .8975; EUR/CHF is up by 15 pips (+0.13%) to 1.1255, and EUR/CAD is up by 24 pips (+0.16%) to 1.5152.

JPY

JPY
It was a busy session for the yen bulls, which took advantage of the overall risk aversion in the markets.

USD/JPY is down by 14 pips (-0.13%) to 110.90; EUR/JPY is down by 15 pips (-0.12%) to 128.68; GBP/JPY is down by 47 pips (-0.32%) to 143.37, and CHF/JPY is down by 27 pips (-0.24%) to 114.33.

Watch Out For:

  • 6:30 am GMT: Australia’s commodity prices (y/y)
  • 7:15 am GMT: Switzerland’s retail sales (y/y) (1.2% expected, 0.3% previous)
  • 7:15 am GMT: Spain’s manufacturing PMI (52.5 expected, 52.9 previous)
  • 7:15 am GMT: Switzerland’s manufacturing PMI (61.0 expected, 61.9 previous)
  • 7:45 am GMT: Italy’s manufacturing PMI (51.2 expected, 51.5 previous)
  • 7:50 am GMT: France’s final manufacturing PMI to remain at 53.7?
  • 7:50 am GMT: France’s final manufacturing PMI to remain at 53.7?
  • 8:00 am GMT: Euro Zone’s final manufacturing PMI to remain at 54.6?
  • 8:30 am GMT: U.K.’s manufacturing PMI (53.9 expected, 54.0 previous)