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The dollar and euro extended their trends from the previous sessions, while better-than-expected economic reports sent commodity-related currencies higher across the board.

  • Japan’s final GDP (q/q) dips from 1.0% to 0.6% in Q2 2017
  • Japan’s bank lending (y/y) up by 3.2% in August vs. 3.3% growth in July
  • Japan’s current account surplus inches higher from 1.52T JPY to 2.03T JPY
  • AU home loans rises by 2.9% vs. 1.2% growth in June
  • China’s trade surplus (in CNY) down from 321B to 287B in August
  • China’s trade surplus (in USD) down from 46.7B to 42.0B in August

Major Events/Reports:

China’s trade numbers

Trade data from the world’s second largest economy invoked mixed feelings earlier today. See, dollar-denominated trade surplus unexpectedly fell to a three-month low as imports grew twice as fast as exports.

Dollar-denominated exports rose by 5.5% in the twelve months to August, while imports climbed by a whopping 13.3% from a year earlier and marked its 10th consecutive month of expansion. A Reuters poll put exports growth at 6.0% and imports up by 10.0% for the same period.

In yuan terms, exports had grown by 6.9% after rising by 11.2% in July while imports clocked in a 14.4% growth after rising by 14.7% in the previous month.

Purchases of industrial commodities led the growth in imports as soaring steel prices boosted Chinese mills’ appetite for high-quality iron ore. Meanwhile, (relatively) tepid export growth reflected softening global demand though increased shipments to Asian and the U.S. somewhat offset slower exports growth in the EU and Japan.

Extension of U.S. session themes

Asian session traders caught up to their U.S. counterparts by pricing in yesterday’s economic themes. Specifically, they sold the dollar on the back of a weak U.S. jobless claims report as well as concerns on the impact of hurricanes on the U.S. economy.

The euro also extended its bullish run to clock in 2.5-year highs against the Greenback. If you recall, hints of tightening from the ECB as well as a lack of concern over a strong currency pushed the common currency higher during the London and U.S. sessions.

Jitters ahead of North Korea’s anniversary

Trading the equities market was a bit tricky ahead of North Korea’s founding anniversary.

Remember that the DPRK recently went back to its nuclear testing ways, which prompted speculations that Kim Jong Un would send a big “gift package” to the U.S. and its allies tomorrow to celebrate its founding anniversary.

  • Nikkei is down by 0.46% to 19,307.50;
  • Australia’s A SX 200 is down by 0.41% to 5,666.50;
  • Hang Seng is up by 0.55% to 27,675.00, and
  • Shanghai index is up by 0.18% to 12,051.34.

Major Market Mover(s):

EUR

The common currency extended its gains as Asian session traders caught up to the ECB’s hawkishness (or the lack of dovishness) yesterday.

EUR/USD hit a 2.5-year high of 1.2090 before settling down to 1.2071;
EUR/JPY rose to 130.67 before falling to 130.53, and
EUR/GBP popped up to .9203 before dipping to .9192.

Comdolls

A combination of dollar weakness, a bit of risk appetite, and higher commodities following China’s import numbers boosted commodity-related currencies across the board.

AUD/USD is up by 58 pips (+0.72%) to .8106;
AUD/JPY is up by 36 pips (+0.41%) to 87.64;
USD/CAD is down by another 52 pips (-0.43%) to 1.2072;
CAD/JPY is up by 10 pips (-0.11%) to 89.56;
NZD/USD is up by 80 pips (+1.11%) to .7313, and
NZD/JPY is up by 63 pips (+0.80%) to 79.09.

Watch Out For:

  • 5:00 am GMT: Japan’s Economy Watchers Survey
  • 5:45 am GMT: Switzerland’s unemployment rate to stay at 3.2?
  • 6:00 am GMT: Germany’s trade balance (21.0B expected, 22.3B EUR previous)
  • 6:00 am GMT: Germany’s current account balance (20.8B EUR expected, 23.6B EUR previous)
  • 6:45 am GMT: France’s industrial production (0.5% expected, -1.1% previous)
  • 6:45 am GMT: France’s manufacturing production (y/y) (4.2% expected, 3.3% previous)
  • 8:30 am GMT: RBA’s Lowe to give a speech in Sydney
  • 8:30 am GMT: U.K. industrial production (y/y) (0.4% expected, 0.3% previous)
  • 8:30 am GMT: U.K. manufacturing production (y/y)(1.7% expected, 0.6% previous)
  • 8:30 am GMT: U.K. construction output (-0.2% expected, -0.1% previous)
  • 8:30 am GMT: U.K. goods trade balance (-12.0B GBP expected, -12.72B GBP previous)