Talking Points:
- Commodity Dollars Gains, Japanese Yen Declines as Risk Appetite Firms
- S&P 500 Index Futures Hint Risk-On Sentiment Likely to Carry Forward
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The Australian, Canadian and New Zealand Dollars rallied as risk appetite firmed in overnight trade. The Japanese Yen weakened as the firming sentiment undercut demand for the safety-linked currency.
Asian shares soared in a move the news-wires chalked up to firming confidence in Chinese officials’ ability to stabilize on-shore markets. Data released over the weekend showed Chinese FX reserves fell by US$93.9 billion in August – the most since at least 1996 – to telegraph Beijing’s willingness to commit resources toward pushing back against recent turmoil.
The European calendar is relatively quiet in overnight trade, hinting risk sentiment trends are likely to remain in the driver’s seat for now. S&P 500 stock index futures are pointing firmly higher, suggesting the risk-on mood will probably carry onward and continue to boost high-yielding FX while weighing on funding currencies.
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Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 23:01 | GBP | BRC Shop Price Index (YoY) (AUG) | -1.4% | -0.2% | -1.4% |
| 23:50 | JPY | Money Stock M2 (YoY) (AUG) | 4.2% | 4.1% | 4.0% |
| 23:50 | JPY | Money Stock M3 (YoY) (AUG) | 3.4% | 3.3% | 3.3% |
| 00:30 | AUD | Westpac Consumer Conf Index (SEP) | 93.9 | - | 99.5 |
| 00:30 | AUD | Westpac Consumer Conf SA (MoM) (SEP) | -5.6% | - | 7.8% |
| 01:30 | AUD | Home Loans (MoM) (JUL) | 0.3% | 0.8% | 4.8% |
| 01:30 | AUD | Investment Lending (JUL) | 0.5% | - | -0.5% |
| 01:30 | AUD | Owner-Occupier Loan Value (MoM) (JUL) | 2.2% | - | 6.7% |
| 05:00 | JPY | Consumer Confidence Index (AUG) | 41.7 | 40.5 | 40.3 |
| 06:00 | JPY | Machine Tool Orders (YoY) (AUG P) | -16.5% | - | 1.7% |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
|---|---|---|---|---|---|
| 08:30 | GBP | Industrial Production (MoM) (JUL) | 0.1% | -0.4% | Medium |
| 08:30 | GBP | Industrial Production (YoY) (JUL) | 1.4% | 1.5% | Medium |
| 08:30 | GBP | Manufacturing Production (MoM) (JUL) | 0.2% | 0.2% | Medium |
| 08:30 | GBP | Manufacturing Production (YoY) (JUL) | 0.5% | 0.5% | Medium |
| 08:30 | GBP | Visible Trade Balance (£/Mn) (JUL) | -9500 | -9184 | Low |
| 08:30 | GBP | Trade Balance Non EU (£/Mn) (JUL) | -1825 | -1620 | Low |
| 08:30 | GBP | Trade Balance (£/Mn) (JUL) | -1950 | -1601 | Low |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EURUSD | 1.1041 | 1.1118 | 1.1160 | 1.1195 | 1.1237 | 1.1272 | 1.1349 |
| GBPUSD | 1.5076 | 1.5218 | 1.5307 | 1.5360 | 1.5449 | 1.5502 | 1.5644 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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