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Comdoll traders shrugged off good trade data from Australia to price in higher Treasury yields from the U.S.

Meanwhile, dollar bulls took a chill pill and gave way for the yen and franc to scoop up benefit of a risk-averse trading environment.

  • China’s markets still out on holiday
  • Australia’s trade surplus widens from 1.55B AUD to 1.60B AUD in August

Major Events/Reports:

Australia’s trade numbers

Data from the Land Down Under clocked in a trade surplus of 1.60B AUD in August, which is stronger than the 1.55B surplus seen in July and the 1.40B reading that markets had expected.

It’s also the EIGTHTH straight month of surplus, yo!

A closer look tells us that exports had risen by another 1% from the previous month to its second-highest levels as sales of other rural and meat and meat preparations propped the figures higher.

Meanwhile, inbound shipments were mostly flat even as demand for consumption goods, non-industrial transport equipment, and food and beverages inched higher.

Unfortunately for Aussie bulls, the numbers weren’t impressive enough to counter the overall theme of traders flocking to assets made more attractive by higher yields.

Mixed market sentiment

Asian session equity players didn’t go the way of their U.S. counterparts as they priced in capital flying into “safe” plays like dollar-denominated assets.

In the previous session recaps, we talked about how hawkish remarks from Fed head honcho Powell and U.S. Treasury yields hitting notable highs have attracted yield-seekers away from high-yielding investments (mostly in Asia) and into dollar-denominated assets that now have slightly better yields than yesterday.

Thing is, the capital flight is forcing emerging markets to offer higher yields on THEIR own bonds, which means that they’ll have to pay more for acquiring debt than they had to yesterday.

  • Nikkei is down by 0.60% to 23,966.0
  • A SX 200 is up by 0.34% to 6,176.5
  • Hang Seng is down by 1.68% to 26,635.0

Commodity prices were a little more mixed, with gold slipping on a bit of dollar demand while crude oil benchmarks continued their uptrends ahead of Iran’s sanctions.

  • Gold is down by 0.04% to $1,196.62 per troy ounce
  • Brent crude oil is up by 0.20% to $86.17 per barrel
  • U.S. WTI I up by 0.12% to $76.28 per barrel

Major Market Mover(s):

AUD and NZD

Comdoll trades shrugged off Australia’s positive trade data in favor of selling the high-yielding Aussie and Kiwi.

AUD/USD is down by 14 pips (-0.19%) to .7087; AUD/JPY is down by 34 pips (-0.42%) to 89.99; EUR/AUD is up by 28 pips (+0.17%) to 1.6184; GBP/AUD is up by 33 pips (+0.18%) to 1.8244, and AUD/CHF is down by 19 pips (-0.27%) to .7028.

NZD/USD is down by 19 pips (-0.30%) to .6494; NZD/JPY is down by 37 pips (-0.50%) to 74.21; EUR/NZD is up by 39 pips (+0.22%) to 1.7662; GBP/NZD is up by 49 pips (+0.25%) to 1.9910, and AUD/NZD is up by 12 pips (+0.11%) to 1.0913.

JPY and CHF

The Greenback didn’t gain as sharply as the yen and the franc, which took advantage of the overall risk aversion in the markets.

USD/JPY is down by 26 pips (-0.22%) to 114.27; EUR/JPY is down by 37 pips (-0.28%) to 131.07; GBP/JPY is down by 40 pips (-0.27%) to 147.76; CAD/JPY is down by 25 pips (-0.28%) to 88.72, and CHF/JPY is down by 17 pips (-0.15%) to 115.23.

USD/CHF is down by 7 pips (-0.07%) to .9916; EUR/CHF is down by 15 pips (-0.13%) to 1.1374; GBP/CHF is down by 15 pips (-0.12%) to 1.2822; CAD/CHF is down by 9 pips (-0.12%) to .7699, and NZD/CHF is down by 22 pips (-0.34%) to .6440.

Watch Out For:

  • 8:30 am GMT: U.K.’s housing equity withdrawal (q/q) (-6.5B GBP expected, -6.7B GBP previous)