FX Highlights

  • USD is trading mixed to lower as stocks rally, crude prices trade above $73 a barrel and economic data from Europe is stronger than expected, growth linked currencies outperform, CHF supported by sharp improvement in the Swiss KOF indicator, EU economic, consumer and industry sentiment improves in August but EUR rally stalls, GBP supported by report of better than expected UK GDP, commodity currencies supported by firmer commodity prices, USD downside limited by sharp decline in Shanghai Index and weaker than expected economic data from Japan, Japan's unemployment rises to record high and core inflation falls at a record pace, speculation that the global recession is ending sparked selling of the JPY and helped to offset the impact of a sharp fall in the Shanghai Index
  • Focus turns to today's release of US personal income, consumption, Michigan consumer sentiment and Canada's wholesale and raw material prices
  • Japan's July core CPI falls by record 2.2% y/y, July unemployment hits an all-time high of 5.7% and July household spending falls 1.3%, JPY lower
  • UK August GFK consumer sentiment falls to -25, a reading of -24 was expected, UK Q2 GDP revised UP to -0.7%, GBP higher
  • EU August economic sentiment improved to 80.6 from 76 last month, industry sentiment improved to -26 from -30 last month and consumer sentiment improved to -22 from -23 last month, EUR lower
  • Swiss August KOF leading indicator improves to -0.04 , a reading of -0.60 was expected, Swiss Q1 GDP revised to -0.9%, SNB board member Jordan says the SNB will not accept any further strengthening CHF, CHF higher
  • US problem bank list hits 15 year high, FDIC fund at lowest level since 1993
  • World trade flows rose 2.5% in June, a sign that the global recession is ending
  • Fed Lockhart says its premature to consider rate hike, expects subdued or lackluster US recovery and protracted unemployment, Fed Bullard says monetary policy still accommodate will keep rates near zero for extended period, focus on exit strategy in 2010
  • US equity markets set to open higher, European equities1.5% higher, Nikkei closed 62 points higher

Upcoming Events

  • US- Friday, July personal income and consumption will be released, both reports are expected to rise by 0.2% along with final Michigan consumer sentiment expected at 64.5 compared to 63.2
  • CAN- Friday, July IPPI and RMPI will be released, IPPI is expected at 0.5% and RMPI 1.5%