- GBP/USD forecast to around 1.10 and EUR/GBP to around 0.90
- Goldman Sachs reiterate thier expectation that US inflation has peaked (core PCE)
- China Markit Manufacturing PMI plunges into contraction: 49.5 in August (expected 50.2)
- Australian Q2 Capex -0.3% q/q (expected +1.5%)
- Australian data - July home loans -8.5% m/m (vs. expected -3.0%)
- PBOC sets USD/ CNY reference rate for today at 6.8821 (vs. estimate at 6.8910)
- RBA monetary policy meeting Tuesday September 6 - preview (TL;DR +50bp hike coming up)
- Japan data - August Manufacturing PMI 51.5 (preliminary was 51.0)
- The PBoC yuan setting is due soon - once again the Bank is battling a surging USD
- Yield on 2 year US Treasury highest since 2007
- South Korea trade data for August, beats for imports and exports
- USD/JPY has hit a 20 year high
- Japan data, Q2 Capex +3.9% q/q and +4.6% y/y
- The US is limiting the sale of Nvidia's best AI data center chips to China & Russia
- Australia's 2nd Manufacturing PMI for August 53.8 (prior 55.7)
- Reports now the ship that ran aground in the Suez Canal has been refloated
- Picture - Another ship runs aground in the Suez Canal
- Australian August Manufacturing PMI plunges back into contraction
- Fed's Logan says the Bank's number one priority is to restore price stability
- ICYMI - Toyota to hike price of steel supplies for parts makers by up to 30%
- Another ship has run aground in the Suez Canal
- ICYMI - Goldman Sachs forecasts an ECB 75 bps rate hike in September
- Rising COVID cases in China economic hubs, "the threat of damaging lockdowns is growing"
- Barclays view on risk assets is to remain bearish
- How to control the FEAR OF FAILURE in your trading
- On Friday Western officials will lay out their plan for a cap on the price of Russian oil
- Expected oil surplus slashed to 400K barrels per day, from 900K
- Trade ideas thread - Thursday, 1 September 2022
- Stocks close lower for the 4th day in a row
It was an active day in the Asian timezone, beginning with a reemergence of supply chain worries with reports that a ship had run aground in the Suez Canal. Markets have fresh memories of the EverGiven doing so in 2021 and not being freed for six days. This time around though the ship, a Singaporean flagged oil tanker, was re-floated quickly and normal navigation through the bottleneck resumed.
USD/JPY continued its rise through the session, hitting a high above 139.60 before stalling a little. So far we have not had the usual round of jawboning from Japanese officials. This has been along the lines that rapid moves are unwelcome, but, so far nothing.
Cable continued its slide to a low under 1.1580.
US dollar strength was evident elsewhere. CAD, EUR, AUD, NZD, CHF are all down on the session against the USD. The yield on 2-year US Treasuries rose to its highest since 2007, providing a nice tailwind to the USD.
The data focus was again on China. Today we had the second of the monthly manufacturing PMIs, that from Caixin-Markit. Like the official manufacturing PMI for August released yesterday this one, too, fell into contraction. Headwinds for China include the very familiar by now:
COVID outbreaks and associated restrictions
the deeply troubled contracting property sector
power shortages in southwestern China
I’d noted earlier in the session commentary from Capital Economics that 41 cities in China, responsible for 32% of the country’s GDP, are currently in the midst of outbreaks. This is the highest number since April and raises the risk of further lockdowns and associated economic damage.
While on China, the People’s Bank of China today once again set the onshore yuan at a mid-rate stronger (for the yuan, i.e. lower for USD/CNY) than the estimate. For the seventh day in succession.
NASDAQ futures dropped during on Globex. News hit in (US) after hours that the US government had halted exports, immediately, of advanced products from Nvidia to China and Russia. Nvdia stock took a hit, weighing on NQ.
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