- Two major banks expect the Chinese economy to start losing momentum in coming months
- Australian wages rise by 5.6% YoY
- US congress pass law on credit card crackdown
- Japans cabinet office expected to raise economic outlook
- Taiwans’ economy expected to contract by 10% YoY
- Chinalco set to restructure Rio deal
- Regional stock markets lose just over 1% on average
- Gold continues to drift higher, stabilising above $940/oz
The main event in NY was the release of the Fed minutes and this has helped to maintain the downward pressure on USD/JPY during our trading session. Stops below 94.55 were triggered in USD/JPY in early Asian trade and even though the pair has only traded down to 94.30, the bounce to 94.60 has also been unspectacular. EUR/JPY, AUD/JPY and GBP/JPY were all sold off in the morning session as weak stops were tripped and risk aversion returned generally with falling stock markets. A buying flow in cable, EUR/USD and AUD/USD, thought to come from a real money fund, helped to drag all three pairs off their session lows and this in turn sparked some short covering on the JPY crosses. The afternoon session has so far proved to be very quiet.
Orders: USD/CAD sell orders 1.1450/65 with tight trailing stops starting just above; rumoured large sell interest in AUD/USD around .7800 but no firm levels available; strong technical support in USD/CHF at 1.0970 with expected heavy stops below. Sovereign bids reported in EUR/USD at 1.3650.
Markets: Nikkei -1.2%, HK -1.2%, Sydney -0.5%, Shanghai -1.1%, Kospi -1.1%. Gold $942.50/oz. Brent $60.50/bbl.
Ranges: EUR/USD 1.3757/1.3808; Cable 1.5730/1.5819; USD/JPY 94.29/94.98; EUR/JPY 129.92/130.90; AUD/USD .7724/.7784.
