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Optimism in the U.S. markets and a warning about North Korea’s progress on its weapons program weighed on the comdolls and pushed the Greenback higher.

  • New Zealand’s building consents jumps by 10.2% vs. 1.7% gain in July
  • U.K.’s GfK consumer confidence rises to -9 vs. -11 expected, -10 reading in August
  • Japan’s household spending (y/y) improves by 0.6% vs. 1.0% growth expected -0.2% previous
  • Japan’s unemployment rate steadies at 2.8% in August
  • Japan’s national CPI (y/y) up by 0.7% as expected vs. 0.5% previous
  • Tokyo’s core CPI (y/y) up by 0.5% as expected vs. 0.4% growth in August
  • Japan’s preliminary industrial production jumps by 2.1% in August vs. 1.8% expected, -0.8% previous
  • Japan’s retail sales (y/y) dips to 1.7% vs. 2.5% expected, 1.8% previous
  • AU private sector credit up by another 0.5% in August as expected
  • Japan’s housing starts (y/y) slips by 2.0% vs. 2.3% decline in July
  • BOJ’s Summary of Opinions reveals a suggestion of more easing ahead of Oct 2019 tax increase
  • IAEA warns of North Korea’s “rapid progress” on weapons program

Major Events/Reports:

Japan’s data dump

Earlier today the world’s third largest economy printed a set of top-tier economic reports.

Japan’s retail sector grew by 1.7% from a year earlier in August after gaining 1.8% in July. Analysts had expected a 2.6% annualized growth for the month. Household spending picked up the slack, though, as it improved by 0.6% for the month after slipping by 0.2% in July.

Even the nation’s consumer prices showed a few bright spots. Headline prices ticked 0.7% higher from a year earlier in August while core consumer prices also clocked in a 0.7% growth.

The figures not only matched analysts’ forecasts, but also marked the eighth straight month of gains for the report. A closer tells us that higher food prices contributed a chunk to the increase in prices. Tokyo’s core CPI – considered a leading indicator of prices – grew by 0.5% from a month earlier when markets had expected a 0.6% uptick.

Last but not the least is the unemployment rate, which remained at its 23-year low of 2.8%. Jobs-to-applicant ratio also remained at 1.52 even as analysts had seen a rise to 1.53. Overall, the figures still support the BOJ’s optimism on the uptrend of consumer prices.

Yen bulls weren’t able to gain momentum, however, thanks to a Summary of Opinions printed by the Bank of Japan (BOJ). In it the central bank members emphasized the importance of keeping their policies easy to achieve their 2.0% target, with one unidentified member even suggesting that “It’s necessary to stimulate demand further with additional monetary easing” given that taxes would increase in October 2019. Yipes!

IAEA warns of North Korea’s weapons progress

A few hours ago the International Atomic Energy Agency (IAEA) Director Yukiya Amano told reporters that North Korea’s sixth nuclear test conducted last September 3 was “much bigger than the previous test,” and that it means that “North Korea made very rapid progress” on its weapons program.

Amano added that this, along with “other elements,” makes North Korea’s rockets “a new threat and this is a global threat.” He shared that the agency is willing to “play a role” in diffusing the threat and called for “the international community to unite to solve this serious threat.

Major Market Mover(s):

USD

The Greenback continued to gain against its major counterparts as caution prevailed during the Asian session.

USD/JPY is up by another 18 pips (+0.16%) to 112.61 and USD/CHF is up by 2 pips (+0.02%) to .9711.

Comdolls

Whether it was end-of-quarter profit-taking, dollar strength, or risk aversion from warnings against North Korea’s weapons program, high-yielding currencies like the comdolls took hits against the Greenback.

AUD/USD is down by 5 pips (-0.6%) to .7849 and NZD/USD is down by 17 pips (-0.24%) to .7215.

Watch Out For:

  • 6:00 am GMT: Germanys retail sales (0.5% expected, 0.6% previous)
  • 6:00 am GMT: U.K. Nationwide house price index (0.1% expected, -0.1% previous)
  • 6:45 am GMT: France’s consumer spending (0.2% expected, 0.7% previous)
  • 6:45 am GMT: France’s preliminary CPI (-0.2% expected, 0.5% previous)
  • 7:00 am GMT: KOF economic barometer (105.5 expected, 104.1 previous)
  • 7:55 am GMT: Germany’s unemployment change expected to remain at -5K
  • 8:30 am GMT: U.K.’s current account balance (-15.8K expected, -16.9K previous)
  • 8:30 am GMT: U.K.’s final GDP (q/q) to remain at 0.3%?
  • 8:30 am GMT: U.K.’s net individual lending (5.0B GBP expected, 4.8B GBP previous)
  • 8:30 am GMT: U.K.’s services index (0.7% expected, 0.5% previous)
  • 8:30 am GMT: U.K.’s mortgage approvals (68K expected, 69K previous)
  • 9:00 am GMT: Euro Zone’s flash CPI estimate (y/y) (1.6% expected, 1.5% previous)
  • 9:00 am GMT: Euro Zone’s core CPI flash estimate (y/y) to remain at 1.2%?
  • 9:00 am GMT: Italy’s preliminary CPI (-0.2% expected, 0.3% previous)