- US August ISM services 54.5 vs 52.5 expected
- Beige Book: Most Districts indicated economic growth was modest
- Does Xi skipping the G20 signal a challenge to his leadership?
- Senate votes to confirm Philip Jefferson as Fed vice chair
- ECB's Visco: Interest rates have gone where they needed to go
- BOE's Bailey: Many indicators are signalling a fall in inflation, which will be marked
- Fed's Collins: IT's time for mon pol to be patient and deliberate
- US July international trade balance -65.0B vs -68.0B expected
- Canada July trade balance -0.99B vs -3.65B expected
Markets:
- Gold down $9 to $1916
- US 10-year yields up 3.1 bps to 4.30%
- WTI crude oil up $0.99 to $87.68
- S&P 500 down 34 points to 4468
- EUR leads, GBP lags
The overall moves in the FX market today weren't large but there was significant movement under the surface. It started in Europe as the ECB's Knot pushed back on the idea that the ECB will stay on the sidelines. That helped the euro and sustained some outperformance throughout the day.
In Canada, the loonie finishes flat but the Bank of Canada did take a more-hawkish stance than might have been expected, highlighting sticky core inflation. The moves were choppy initially and mixed in with a ninth day of gains for oil.
On the other hand, the BOE's Bailey and other MPC members flagged less worries about inflation. The comments sounded like a repeat but the dovish tone got the market's attention and the pound fell 50 pips, all of it after the parliamentary appearance.
USD/JPY stayed strong despite intervention talk. The dollar strengthened broadly after the ISM data as it roundly beat expectations. That sets up an interesting Asia-Pac session that also includes Chinese import/export data. Last month, terrible trade numbers kicked off a round of worries about the Chinese economy.
