- Japanese Tankan report comes in as expected with the big manufacturing index at -33
- Japan’s August retail sales -1.8%, or +1% MoM, which was better than expected
- China’s PMI 54.3 in September
- Japan’s big manufacturers see USD/JPY averaging 94.50 for FY 2009/2010
- Chinese financial markets closed Oct 1-8
- Gold steady after big gain overnight, Nikkei falls 1.5%
- Central Bank of Korea intervening in USD/KRW, reportedly buying around USD$1 billion
Some early buying of the JPY crosses pre-Tankan fizzled out when the number came in as expected. AUD/USD opened in Asia close to its NY high of .8847 and then proceeded to take out an option barrier at .8850. This in turn dragged the EUR/USD higher but some heavy selling by a big Japanese bank around 1.4660-65 put a top in place. Cable also bore the brunt of significant selling especially when the Nikkei continued to fall and some risk-aversion trading emerged but interest has been generally low overall.
The Bank of Korea have been buying a lot of USD/KRW as they have intervened to steady the fall in that pair. They are expected to buy EUR, GBP, JPY and AUD against the USD to balance their reserves.
Markets: Nikkei -1.5%, Kospi -1.8%; Gold steady at $1006.50 after jumping $14/oz overnight.
Ranges: EUR/USD 1.4623/67; USD/JPY 89.70/90.00; cable 1.5952/1.6011; AUD/USD .8814/59.
