Morning Markets: USDJPY testing the lower limits
- Germany: ZEW Economic Survey (0900 GMT)
- US: Housing Starts (1230 GMT)
- US: Industrial Production (1315 GMT)
The Japanese yen was stronger overnight, with USDJPY tumbling through resistance around the 100.75 area and approaching the big, 100 handle.
One element assisting the safe-haven rally is the lowering of Federal Reserve rate hike chances, whose probability has now dropped below 50% for 2016 according to forecasts.
Sterling is also trending lower after rallying somewhat in the New York session; although the pair remains significantly oversold, the "near-inevitable" short squeeze does not look likely in the next minuted and hours.
Crude prices remain near their three-week highs with the prime directional factors remaining verbal intervention from Russia and Opec, as well as short-covering from the previous rally.
Today's celendar sees German ZEW data front and centre as analysts expect a mixed August report. Later in the day, we have US housing starts and industrial production where a significant beat or shortfall is likely to add new direction to the greenback trade.
- Australia's consumer confidence rebounded from last week’s dip, rising 2.5%
- RBA expects inflation to remain low but growth prospects are good
- Morgan Stanley forecasts iron ore at $40/tonne in second half of 2016
- Brent was at $48.14/b, down 21 cents and WTI at $45.56/b, down 18 cents
- Emerging market stocks and currencies extended gains in Asian trading
- South Korean shares resumed trading after a holiday, climbing for an eighth day
- USDJPY plunges to 100.25 area as yen rally continues
- The GBP slips to near its three-decade low in early trade, at $1.2887
- The South Korean won led a measure of currencies higher
- A gauge of swings in the yuan dropped to near its lowest level since October
- CNH one-month implied volatility dropped to 3.64%
- The AUD was trading in a tight range around 76.7 US cents in mid Asia trade
From the Floor
USDJPY slide. “I think the 100.0 mark is very likely to be tested”, says Moltke-Leth
Opportunity knocks. “Intraday sellers of WTI could be looking for a retracement back to $43-44/barrel”, says Hansen.
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
Germany's ZEW release of August sentiment is expected to produce a mixed report today although the consensus is for a rebound, says James Picerno.
Asia's markets just love when the oil price stabilises - it's a cue to confidence and this morning's markets were no exception, says Saxo's Singapore team
Emerging market stocks advanced for an eighth straight day as Russian shares rallied to a record high. As the USD slides, so the EMs rise, says Saxo Capital Markets
The USD managed a recovery rally after Friday's poor data, but bulls have apparently run out of gas as the greenback is sliding lower again, writes John J Hardy.
Morning Markets goes out on the TradingFloor platform at 0700 GMT, Monday to Friday.
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