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The Greenback lost ground against the European currencies on a bit of profit-taking ahead of the FOMC meeting minutes on Wednesday, while the Aussie dominated the forex scene thanks to a positive business survey release.

  • U.K. BRC retail sales monitor (y/y) rises by 1.9% vs. 1.3% growth in August
  • Japanese current account surplus clocks in at 2.27T JPY vs. 2.03T surplus in July
  • Australia’s NAB business confidence index inches up from 5 to 7 in September
  • Australia’s NAB business conditions remains at 14 in September
  • China to add expenditure on research as “fixed asset investment” into GDP calculations

Major Events/Reports:

NAB business survey points to RBA rate hike

National Australia Bank’s survey of more than 400 companies showed business confidence rising by 2 index points to +7 in September, while business conditions maintained August’s downwardly revised reading of +14.

Details reveal that the construction industry is leading the way in business conditions though other industries are “following close behind.”

At the end of the report the firm posted that

“With the labour market poised to see further improvement going into 2018, the economy now seems better equipped to deal with the challenges it faces, which should leave the RBA with scope to commence a shift away from emergency stimulus settings by H2 2018 (NAB expect 25bp hikes in August and November 2018).”

It’s not all rainbows and unicorns, though. The retail industry continues to buck the uptrend with its negative conditions, while a decline in the employment component is only offset by a rebound in company trading and profitability conditions.

Overall, declines in retail and employment conditions should keep the RBA worrying over consumer spending for a while yet.

Japan’s current account surplus

Data from the third largest economy in the world saw a wider current account surplus for the month of August. BFD, since the surplus is more than 3% of the size of Japan’s GDP.

Japan’s current account clocked in at 2.38 billion JPY for the month, which is higher than the 2.32B figure in July and marks the highest surplus for any August reading.

Foreign investments, a healthy trade balance, and a tourism boom all contributed to a positive current account reading.

The surplus in the primary income account, which reflects how much Japan earns from foreign investments, rose 13.0% from a year ago to 2.24T JPY. Meanwhile, goods trade registered a surplus of 319B JPY, up 46.2% from a year earlier.

Higher commodity prices

Gold prices took advantage of overall dollar weakness, while oil traders extended yesterday’s moves after OPEC officials stepped up their jawboning.

  • Gold is up by 0.33% to $1,289.30;
  • Silver is up by 0.55% to $17.065;
  • U.S. crude oil prices are up by another 0.10% to $49.63, and
  • Brent crude oil is up by 0.09% to $55.84.

Major Market Mover(s):

AUD

The Aussie dominated the forex scene after the closely-watched NAB survey hinted of RBA rate hikes by H2 2018.

AUD/USD is up by 21 pips (+0.27%) to .7779;
AUD/JPY is up by 32 pips (+0.37%) to 87.65;
EUR/AUD is down by 37 pips (-0.22%) to 1.6911, and
AUD/NZD is up by 27 pips (-0.25%) to 1.1004

JPY

The low-yielding yen took hits against its counterparts thanks to a small wave of risk appetite in the markets.

CAD/JPY is up by 20 pips (+0.22%) to 89.94
NZD/JPY is up by 11 pips (+0.14%) to 79.66;
EUR/JPY is up by 31 pips (+0.23%) to 132.59; and
GBP/JPY is up by 25 pips (+0.17%) to 148.24.

USD

The Greenback slipped against the European currencies on a bit of profit-taking ahead of Wednesday’s FOMC meeting minutes release.

EUR/USD is up by 16 pips (+0.14%) to 1.1767;
GBP/USD is up by 9 pips (+0.07%) to 1.3155, and
USD/CHF closed at .9786 after hitting a session low of .9772.

Watch Out For:

  • 5:00 am GMT: Japan’s Economy Watchers Sentiment index (49.9 expected, 49.7 previous)
  • 5:45 am GMT: Switzerland’s unemployment rate to remain at 3.0%?
  • 6:00 am GMT: Germany’s current account balance (17.0B EUR expected, 19.4B EUR previous)
  • 6:00 am GMT: Germany’s trade balance (19.5B EUR expected and previous)
  • 6:45 am GMT: France’s industrial production (0.4% expected, 0.5% previous)
  • 8:30 am GMT: Italy’s industrial production to remain at 0.1?
  • 8:30 am GMT: Italy’s industrial production to remain at 0.1?
  • 8:30 am GMT: U.K. construction output (0.0% expected, -0.9% previous)
  • 8:30 am GMT: U.K. manufacturing production (y/y) to remain at 1.9?