FX Highlights

  • USD is trading mixed despite a rally in Asian and European equity markets, GBP pressured by a report of record UK July deficit and weaker than expected retail sales, German and Japanese officials urge caution about economic rebound limiting gains in the JPY and EUR, Swiss ZEW index rises to a three year high and Swiss exports rise in July, commodity currencies mixed as crude prices weaken and the RBA confirms aggressive intervention in July, AUD supported by improving risk sentiment
  • Focus turns to today's release of initial jobless claims, leading indicators and Philadelphia Fed along with Canada's wholesale sales
  • BOJ officials say the recovery still needs government support and export rebound may slow in the fall, JPY lower as the Shanghai index rebounds
  • RBA sold A$705 mln in July and sold a record A$1.94 bln in June, July merchandise imports rise 6%, AUD higher
  • UK July retail sales rise 0.4% compared to 1.3% in June, M4 rises 1%, July budget deficit rose to record deficit in July of 13.2 bln, GBP lower
  • Swiss August ZEW index rise to 18.6% from 0.00% last month, July trade surplus widened to 2.35 bln compared to 1.50 bln and last month as exports rise 4.1%, CHF mixed
  • BBK officials see no deflation risk in the EU, German finance Ministry warns about growth sustainability and whether the return to growth can be sustained
  • Rumor of a new stimulus plan supports equities and reduced safe haven USD demand
  • Pimco says USD may weaken as its reserve status erodes
  • US money market funds fall 22.6 bln last week, could be a sign of improving risk appetite
  • Bank of America - Merrill Lynch August survey shows fund manger optimism at a six year high, 75% of those surveyed expect the world economy to firm in the next 12 months
  • MBA says mortgage applications rose in the week ending August 14th up 6.9% from a 7.2% drop the week before
  • Fitch cuts New Jerseys debt rating
  • US equity markets set to open slightly higher, European equities 1% higher, Nikkei closed 179 points higher

Upcoming Events

  • US- Thursday, initial jobless claims for week ending August 5th will be released expected at 540k compared to 558k last month along with August Philly Fed expected to fall to -3 from -2 in July and July leading indicators expected at 0.4% compared to 0.7% in June
  • CAN- Thursday, May wholesale sales will be released expected 0.2% compared to -0.3% last month