FX Highlights

  • USD and JPY trade higher as the Shanghai Index falls 6% and the DPJ party wins a landslide victory in Japan's national election taking power for the first time in 50 years, the DPJ party is expected to increase spending to boost the economy, Japan's economic data points to recovery, China may take steps to stabilize the stock market, the decline in the Shanghai Index sparked safe haven demand for USD and JPY, UK markets closed for holiday, EU inflation falls less than expected, oil prices fall below $72 a barrel, commodity currencies trading lower tracking weaker equities and lower crude prices
  • Focus turns to today's release of Chicago PMI and Canada's GDP
  • Japan's opposition Democratic Party wins Japan's national election and gains almost 2/3 majority in the lower house Diet, Japans July industrial production rises 1.5%, August manufacturing PMI rises to three-year high of 53.6, retail sales for July rise 0.4%, BOJ Governor see recovery in Japan but expects the recovery to be moderate, BOJ to maintain accommodative bias, JPY higher
  • Australia's Q2 business inventories fall 3.4% q/q, Q2 operating profits fall 7.8% July new home sales rise 0.1%, August inflation index rises 1.7%, AUD lower
  • EU August CPI falls by less than expected 0.2%, EUR lower
  • Hometrack reports that UK house prices rose for the first time in two years in August, GBP pressured by concerns about rising UK government debt
  • Canada said it will sell up to $ 3bln US dollar bonds to lift foreign reserves and boost IMF lending, this is Canada's first global bond auction in a decade, could increase BOC intervention speculation, Canada posted a record current account deficit in Q2, CAD lower
  • Big US banks get bigger with JP Morgan Chase holding $1 of every $10 on deposit in the US, so does Bank of America
  • Toyota closed its first assembly plant in its 72 year history
  • Investors Intelligence Advisors Sentiment Index reports stock market optimism hit the highest level since late 2007
  • Bank CEO say 1k US banks to fail this year so far the total is 81
  • Reuters reports that the Fed is weighing delayed exit from mortgage purchases, Fed's Dudley says the Fed can avoid inflation
  • US equity markets set to open lower, European equities mixed, Nikkei closed 42 points lower

Upcoming Events

  • US- Monday, Chicago August PMI will be released expected at 46 compared to 43.4 last month
  • CAN- Monday, June GDP will be released expected at -3% compared to -5.4% last month