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The dollar continued to edge higher against its major counterparts. Meanwhile, currency-specific concerns kept traders from the higher-yielding comdolls despite a risk-friendly trading environment.

  • U.K. GfK consumer confidence index improves from -12 to -10 in August
  • Japan’s preliminary industrial production dips by 0.8% vs. 0.4% decrease expected
  • China’s official manufacturing PMI rises from 51.4 to 51.7 in August
  • China’s official non-manufacturing PMI inches lower from 54.5 to 54.4
  • NZ ANZ business confidence falls from 19.4 to 18.3 in August
  • AU private capital expenditure (q/q) rises from 0.3% to 0.8% vs. 0.2% expected
  • AU private sector credit dips from 0.6% to 0.5% as expected
  • Japan’s housing starts (y/y) falls by 2.3% in July vs. 0.2% dip expected

Major Events/Reports:

China’s PMI releases

Earlier today we saw the world’s second largest economy print its official manufacturing and services PMIs for the month of August.

The official gauge of factory activity rose for the month, coming in at 51.7 from July’s 51.4 reading when analysts had expected it to come in at 51.3.

Apparently, the improvement was driven by strong production and a rise in new orders due to improved domestic demand. This supports current sentiment that domestic infrastructure spending and higher commodity prices have mitigated growth risks for the economy.

The official services PMI missed estimates, however. It slipped from 53.5 to 53.4, which is not only the slowest growth since May 2016, but also marks the second consecutive month that the index has fallen.

Remember that the services sector accounts for over half of China’s economy, as rising wages give consumers the opportunity to travel more.

But with higher financing costs and regulations threatening the manufacturing sector while the services PMI is edging lower, market players are growing more concerned about the trajectory of China’s economic growth.

Australia’s quarterly CAPEX report

Data printed earlier today saw the Land Down Under’s capital expenditure rise by 0.8% in Q2 2017. This is better than the 0.2% growth forecasted and only a bit weaker than Q1’s upwardly revised 0.9% uptick.

Details tell us that spending on new capital inched higher by 0.8% while buildings and structures-related purchases dipped by 0.6%.

Fortunately, spending on equipment, plant and machinery jumped by 2.7% and helped offset the 0.6% decline. More importantly, the latter directly factors into the GDP report.

Another detail that caught the bulls’ attention was the third estimate of expected spending for 2017/18, which clocked in at $101.8B when analysts had only been expecting a $9.59B figure.

Overall the numbers support the RBA’s estimates that non-mining industries are turning a corner.

Major Market Mover(s):


The low-yielding Greenback continued to edge higher against its major counterparts despite a risk-friendly trading environment.

USD/JPY is up by 21 pips (+0.19%) to 110.54;
EUR/USD is down by 14 pips (-0.12%) to 1.1875, and
USD/CAD is up by 17 pips (-0.14%) to 1.2640.


A not-so-awesome service PMI report from China and a decline in business confidence in New Zealand all contributed to a topsy-turvy session for the Aussie and a weak one for Kiwi.

AUD/USD is down to .7902 after climbing a session high of .7923 and AUD/JPY simmered down to 87.37 after rising to 87.48.

Meanwhile, NZD/USD is down by 27 pips (-0.38%) to .7172 and NZD/JPY is down by 15 pips (-0.19%) to 79.26.

Watch Out For:

  • 7:00 am GMT: Germany’s retail sales (-0.5% expected, 1.1% previous)
  • 7:45 am GMT: France’s preliminary CPI (0.5% expected, -0.3% previous)
  • 8:25 am GMT: BOE’s MPC member Michale Saunders to give a speech in Wales
  • 8:55 am GMT: Germany’s unemployment change (-6K expected, -9K previous)
  • 9:00 am GMT: Italy’s monthly unemployment rate expected to remain at 11.1%
  • 10:00 am GMT: Euro Zoe’s CPI flash estimate (y/y) to rise from 1.3% to 1.4%?
  • 10:00 am GMT: Euro Zone’s core CPI flash estimate (y/y) to remain at 1.2?
  • 10:00 am GMT: Italy’s preliminary CPI (0.2% expected, 0.1% previous)
  • 10:00 am GMT: Euro Zone’s unemployment rate to remain at 9.1%?