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No fresh catalyst? No problem! High-yielding currencies like the Aussie and Kiwi took more hits as traders continued to price in higher U.S. Treasury yields and the prospect of faster inflation in the U.S.

  • China’s markets still out on bank holiday
  • AU AIG construction index dips from 51.8 to 49.3 in September
  • Japan’s household spending (y/y) jumps by 2.8% in August vs. 0.0% expected, 0.1% previous
  • Japan’s average cash earnings (y/y) up by another 0.9% vs. 1.3% expected, 1.6% previous
  • AU retail sales gains by 0.3% as expected in August
  • U.S. and Japan to hold third round of bilateral talks in mid-November

Major Events/Reports:

Australia’s retail sales

Data from the Land Down Under showed consumer purchases rising by 0.3% in August, which is better than the flat reading we saw in July and is right around the rate that analysts had expected.

A closer look tells us that cafes, restaurants, and takeaway food services shot up by 0.7% while clothing and personal accessory retailing improved by 0.8% after seeing a 2.1% decline in the previous month.

Unfortunately, the strong data wasn’t enough to boost the Aussie amidst overall risk aversion in the markets.

Japan’s data dump

Reports from the world’s third largest economy showed consumer activity remaining resilient in August despite the country being hit by natural disasters and global trade concerns.

Household spending rose by 2.8% from a year earlier, which marks the fastest annual pace in three years as bonuses propped up consumption.

Meanwhile, average cash earnings increased by 0.9% after rising by an upwardly revised 1.6% in July.

Overall, the combination of higher wages and busy household spending paint a bright picture for consumer spending in the foreseeable future.

Major Market Mover(s):

AUD and NZD

High-yielding comdolls like the Aussie and Kiwi continued to take hits from the U.S. Treasury yields hitting seven-year highs and making U.S. debt just a bit more attractive than they were yesterday.

AUD/USD is down by 10 pips (-0.14%) to .7064; AUD/JPY is down by 14 pips (-0.17%) to 80.47; EUR/AUD is up by 28 pips (+0.17%) to 1.6288; GBP/AUD is up by 34 pips (+0.18%) to 1.8424, and AUD/CHF is down by 6 pips (-0.08%) to .7012.

NZD/USD is down by 12 pips (-0.19%) to .6465; NZD/JPY is down by 14 pips (-0.20%) to 73.64; EUR/NZD is up by 25 pips (+0.14%) to 1.7797; GBP/NZD is up by 42 pips (+0.21%) to 2.0130, and AUD/NZD is up by 3 pips (+0.03%) to 1.0926.

JPY

Strong data from Japan and a bit of profit-taking ahead of the NFP report and weekend helped prop the yen just a little higher against its major counterparts.

USD/JPY is down by
EUR/JPY is down by 8 pips (+0.06%) to 131.08; GBP/JPY is down by 7 pips (+0.05%) to 148.26, and CHF/JPY is down by 10 pips (-0.08%) to 114.76.

Watch Out For:

  • 6:00 am GMT: Germany’s factory orders (0.7% expected, -0.9% previous)
  • 6:00 am GMT: Germany’s PPI (0.2% expected and previous)
  • 6:45 am GMT: France’s government budget balance
  • 6:45 am GMT: France’s trade balance (-4.5B EUR expected, -3.5B EUR previous)
  • 7:00 am GMT: Switzerland’s foreign currency reserves
  • 7:15 am GMT: Switzerland’s CPI (0.2% expected, 0.0% previous)
  • 7:30 am GMT: U.K.’s Halifax house price index (0.2% expected, 0.1% previous)
  • 8:00 am GMT: Italy’s retail sales (0.2% expected, -0.1% previous)