Morning Markets: GBPUSD resurfaces above 1.30
- US: Job Openings & Labor Turnover Survey (1400 GMT)
- EIA oil & gas inventory report (1430 GMT)
The rather sudden plunge in GBPUSD towards the lows of last month were arrested at just above the 1.2950 mark to spark a 100-plus pips revival to the 1.3050-75 zone through the Asia session.
If this should be read as a resistant sterling throwing off the shackles of post-Brexit doldrums, this would probably be a mistake given the 0.2% drop in economic output in the UK during July. The real driver has been renewed weakness as the nonfarm payrolls glow fades and the chances of a Federal Reserve rate hike before the end of the year continue to stubbornly refuse to nudge across the 50% line.
That dollar weakness once again propelled USDJPY back towards the 101.0 mark, forced EURUSD to 1.1150 and helped boost gold back above the $1,350/oz area. There was no such luck for the two global oil benchmarks, however, after the API reported a 2.09 million barrels rise in stocks and WTI in particular is once again looking over its shoulder towards the $40/barrel mark and making something of a nonsense of the efforts to talk oil up.
What's happening? The Fed seems to be willing to let things lie in the US with the economy doing nicely enough but not sufficiently well to absolutely justify a move on rates.
That is seeing the re-emergence again of some risk-off sentiment after the NFP-inspired bull run with government bonds, yen and gold all benefiting. The Nikkei and Hang Seng were both into negative territory as a consequence and the Shanghai Composite Index was also once again testing another dip below 3,000.
With not that much on the agenda Wednesday to change the needle — with the possible exception in oil ahead of the EIA oil and gas inventory report — the mild risk-off bias is likely to stay. For now.
Finally, there's been an odd 7.5% rise in the very illiquid palladium market. Platinum has also risen 2% to drop to its lowest ratio against gold in 16 months.
- In early trade, most Asian stocks fell, with Japanese shares leading the losses
- Gold extended its rally from its lowest price this month
- US crude lingered below $43/barrel after data showed US stockpile increasing
- Japan's core machinery orders rose more than expected in June; up 8.3%
- Australian consumer confidence rose 2% in August from July; it's up 1.6% on the year
- The Aussie pushed abover $0.77 for the first time since May
- The USD weakened on speculation the Fed will be slow to raise rates
- The yen added 0.5% to 101.34 per dollar, in early trade
- GBP and NZD both rallied about 0.5% versus the USD
- Korean won led gains in Asia, strengthening for a fifth straight day
From the Floor
Doves down under. "The RBA is likely to stay neutral with a moderate easing bias," says Moltke-Leth.
Heavy metal. “Dovish central banks continue to support gold prices,” says Hansen.
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
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