Article / 30 August 2016 at 7:00 GMT

Morning Markets: USD higher, EU bites into Apple




  • Eurozone: Business Climate Indicator (0900 GMT)
  • US: Consumer Confidence Index (1400 GMT)
  • UK: Gfk Consumer Confidence Index (TBD)
The dollar is broadly higher against other major currencies and still riding the positive sentiment that washed over it in response to the Fed's hawkish tone over the weekend and the consequently heightened expectations of at least one more US rate hike this year. But not everything is well in the US this morning and Apple is braced for official confirmation that the EU will hit it with a bill for over one billion euros of back taxes that it claims a sweetheart deal with the Irish tax authorities allowed it avoid.

The demand has been strongly criticised in the US given that anything paid to Ireland will be matched euro for euro for tax removed from US coffers. Sources in Dublin, meanwhile, have denied any wrongdoing or breach of EU regulations by either Apple or Ireland and say payment is unwarranted.

Meanwhile, the news from Japan overnight was decidedly mixed: The unemployment rate dipped to a 21-year low but this has failed to lift consumer spirits as both retail sales and consumer spending have continued to edge lower. Such data will inevitably increase expectations that the Bank of Japan will further loosen the policy strings at its meeting on September 21 in another big effort to reboot the economy.

Market signals

Asian session

  • Japan's jobless rate hit a 21-year low, falling to 3% in July
  • Its household spending fell 0.5% in July from a year earlier, (minus 1.3% was expected)
  • Separate data showed Japanese retail sales slid 0.2% in July from a year earlier
  • Asian markets opened mixed with the Nikkei down 0.15%, while the Kospi was up 0.65%
  • The ASX 200 was up 0.46% in early trade
  • RBNZ's assistant governor says he doesn't think zero rates will be required
  • Australian building approvals surged 11.3% in July versus 1.1% expected
  • NZ building consents slipped 10.5% in July following a spike in June

Forex ahead

  • The Aussie dollar has risen slightly against the USD; it was worth 0.7566 at 0230 GMT
  • The yen strengthened and in early trade was 101.75 against the dollar

From the Floor

USD vs CNY: "The ongoing Fed hike talk is bringing the CNY back into focus," says Van-Petersen

Safe-haven no more? “We are seeing some spring-loaded potential in USDCHF,” says Hardy

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

While the jury is still out on business sentiment in Europe, US confidence is expected to hit its highest level so far this year, writes James Picerno.

Aussie index up
The ASX200 has enjoyed a modest bounce courtesy of the banks and miners, writes the team at Saxo Capital Markets (Australia).

Rates reassessed
The probability of a September rate hike in the US has now fallen to 36%, writes the team at Saxo APAC Sales Trading.


 Just looking, thanks. Japan’s household spending fell for a fifth consecutive month and retail sales also dropped, underscoring the weakness in domestic demand. Photo: iStock

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