Price action was mostly subdued after yesterday’s risk-taking and before today’s ECB decision. The Aussie was knocked lower, though, thanks to weaker-than-expected Australian data.
- AU AIG construction index slips from 60.5 to 55.3 in August
- AU retail sales flat in July after 0.3% gain in June, 0.2% expected growth
- AU trade surplus dips to 0.46B AUD vs. 1.0B AUD expected, 0.88B AUD surplus in June
- Japan’s leading indicators down from 105.9% to 105.0% in July
Australian data releases
Earlier today the Land Down Under printed its retail sales and trade balance numbers.
Retail sales in Australia came in flat in July after rising by 0.6% in May and 0.3% in June. Not a good sign especially amid higher utilities prices, stagnant wages, and lower savings rate for Australia’s consumers.
Food (+0.7%), other retailing (+1.3%), and cafes, restaurants, and takeaway food (+0.2%) pushed sales higher for the month, but household goods (-1.7%), department store sales (-2.8%), and clothing (-0.2%) dragged the numbers lower.
A separate report showed the trade surplus unexpectedly narrowing down by 48% to 0.46B AUD in July.
Apparently, exports fell by a whopping 2.0% from a month earlier despite higher iron ore prices and natural gas exports.
Meanwhile imports dipped by 1.0% thanks mostly to declines in processed industrial supplies (-3%), parts for transport equipment (-6%), and other parts for capital goods (-3%).
Aussie bears easily jumped on the disappointing data releases especially after yesterday’s closely-watched GDP report also underwhelmed market expectations.
Mixed risk sentiment
Risk appetite from Trump and Congress’ decision to extend the debt ceiling; Canada’s strong GDP, and upbeat data from Uncle Sam spilled over to the Asian bourses.
Volatility remained subdued, however, as traders brace for the ECB’s policy decision coming up in a few hours.
- Nikkei is up by 0.65% to 19,390.00;
- Australia’s A SX 200 is up by 5,699.10;
- Hang Seng is up by 0.04% to 27,624.00, and
- Shanghai index is down by 0.22% to 12,098.08.
Major Market Mover(s):
The comdoll took a few hits on the back of weaker-than-expected reports from Australia.
AUD/USD is down by 4 pips (-0.05%) to .7988 after hitting a session high of .8019;
AUD/JPY is down to 87.12 after reaching 87.50;
EUR/AUD popped to 1.4930 after falling to 1.4873, and
AUD/NZD dipped to 1.1082 after rising to 1.1126.
Watch Out For:
- 6:00 am GMT: German industrial production (0.5% expected, 1.1% previous)
- 6:45 am GMT: French trade balance (-4.5B EUR expected, -4.7B EUR previous)
- 7:00 am GMT: Switzerland’s foreign currency reserves
- 7:30 am GMT: U.K. Halifax house price index (0.2% expected, 0.4% previous)
- 9:00 am GMT: Euro Zone’s revised GDP report