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

Major Events/Reports:

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):

AUD

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