AUD Outperforming Despite Initial Pressure

AUD Outperforming Despite Initial Pressure

AUD Outperforming Despite Initial Pressure

ASIA

Asia began the month mixed following the energy-triggered losses on Wall St. and as the region also digested a slew of Tier-1 data. ASX 200 (-0.3%) initially underperformed after WTI crude futures declined below USD 45/bbl post-DoE build, while Retail Sales and Q2 Capex data also missed expectations. Nikkei 225 (+0.1%) traded choppy amid a pull-back in USD/JPY, with the index edging out again as 103.00 held. China conformed to the indecisiveness after mixed PMI data with the Hang Seng (+0.2%) & Shanghai Comp (-0.1%) swinging between gains and losses after the Official Manufacturing PMI beat expectations, while Non-Manufacturing PMI was lower than prior and the Caixin Manufacturing figure missed estimates to print at the 50.0 benchmark level. 

Chinese Official Manufacturing PMI (Aug) M/M 50.4 vs. Exp. 49.9 (Prev. 49.9)
– Non-Manufacturing PMI (Aug) M/M 53.5 (Prev. 53.9). 

Chinese Caixin Manufacturing PMI (Aug) M/M 50.0 vs. Exp. 50.1 (Prev. 50.6). 

PBoC injected CNY 20bln via 7-day reverse repos and CNY 10bln in 14-day reverse repos

PBoC set CNY mid-point at 6.6784 (Prev. 6.6908). 

EUROPE/UK

Spanish Prime Minister Rajoy lost the first parliamentary confidence vote, with a second vote due on Friday which will be based on a simple majority as opposed to an absolute one. (Newswires) Note, it was widely expected that this would be the outcome. 

FX

USD marginally weakened against its counterparts with AUD outperforming despite initial pressure from a miss on Retail Sales and Private Capex, as an encouraging Private Capex Survey Estimate for 2016-17 provided late support for AUD and resulted in EUR/AUD briefly breaking below 1.4800. Elsewhere, USD/JPY pulled back from yesterday’s highs which saw the pair re-approach 103.00 to the downside.

Australian Private New Capital Expenditure (Q2) Q/Q -5.40% vs. Exp. -4.00% (Prev. -5.20%) 

– Private Capital Expenditure Survey 2016-2017 (AUD)(Est. 3) 105.2bln vs. Exp. 97.0bln (Prev. 89.2bln).

Australian Retail Sales (Jul) Y/Y 0.00% vs. Exp. 0.30% (Prev. 0.10%). 

Brazil's central bank kept the Selic rate unchanged at 14.25% as expected. 

Brazil's Senate has voted to remove President Dilma Rousseff from office for manipulating the budget, putting an end to the 13 years in power of her left-wing Workers' Party. (BBC)

Goldman Sachs sees GBP/USD declining faster once Brexit negotiations with EU have begun and forecasts the pair reaching 1.2000 if EU takes an anticipated hard stance. 

COMMODITIES

Oil prices nursed some of yesterday’s DoE-triggered declines with prices attempting a reclaim of USD 45/bbl, while comments from Saudi’s Foreign Minister regarding OPEC and Non-OPEC producers moving towards a common consensus were largely ignored. Gold (+0.1%) failed to mount any significant recovery and remained near 2-month lows as participants look ahead to NFP’s, while copper was boosted on the back of better than expected Official Chinese Manufacturing PMI.

Saudi Foreign Minister said OPEC and Non-OPEC producers are moving towards a common position and that it is reasonable to move along with other producers in change to output. (Newswires)

SPDR Gold trust holdings fell 1.3% to 943.23 tons. 

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