Talking Points:
Aussie Dollar Down, Yen Higher as Chinese PMI Compounds Risk Aversion
S&P 500 Futures Point to Respite in Market Liquidation into the Week-End
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Risk aversion defined currency market price action in overnight trade. The sentiment-linked Australian Dollar underperformed while the Japanese Yen rallied as traders unwound carry trades funded in terms of the perennial low-yielder. Asian stock exchanges are on pace for the worst week since 2012, with the MSCI Asia Pacific regional benchmark index recording a drop of over 2 percent.
Continued turmoil in the emerging markets space and strong negative carry-over from a dismal US trading session were compounded by a disappointing Chinese Manufacturing PMI figure. The index dropped to 47.1 in August, missing expectations calling for a print at 48.2 and pointing to the fastest pace of factory-sector contraction in at least three years (records go back to August 2012).
Looking ahead, S&P 500 index futures have notably recovered after hitting a six-month low in early Asian trade, suggesting sentiment may stabilize into the week-end and offer a brief respite from market-wide liquidation. Augusts’ preliminary US Manufacturing PMI print headlines the economic calendar. Consensus forecast call for the index to register at 53.8, unchanged from the prior month.
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Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
22:45
NZD
Net Migration SA (JUL)
5740.0
–
4900.0
01:35
JPY
Nikkei Japan PMI Mfg (AUG P)
51.9
–
51.2
01:45
CNY
Caixin China PMI Mfg (AUG P)
47.1
48.2
47.8
03:00
NZD
Credit Card Spending (MoM) (JUL)
1.7%
–
0.3%
03:00
NZD
Credit Card Spending (YoY) (JUL)
9.7%
–
6.6%
05:00
JPY
Supermarket Sales (YoY) (JUL)
1.9%
–
0.3%
European Session
GMT
CCY
EVENT
EXP/ACT
PREV
IMPACT
06:00
EUR
German GfK Consumer Conf (SEP)
9.9 (A)
10.1
Low
07:00
CHF
Money Supply M3 (YoY) (JUL)
1.9% (A)
2.1%
Low
07:00
EUR
Markit France Composite PMI (AUG P)
51.3 (A)
51.5
Low
07:00
EUR
Markit France Mfg PMI (AUG P)
48.6 (A)
49.6
Low
07:00
EUR
Markit France Mfg PMI (AUG P)
51.8 (A)
53.8
Low
07:30
EUR
Markit/BME Germany Composite PMI (AUG P)
54.0 (A)
53.7
Medium
07:30
EUR
Markit/BME Germany Mfg PMI (AUG P)
53.2 (A)
51.8
Medium
07:30
EUR
Markit Germany Services PMI (AUG P)
53.6 (A)
53.8
Medium
08:00
EUR
Markit Eurozone Composite PMI (AUG P)
54.1 (A)
53.9
Medium
08:00
EUR
Markit Eurozone Mfg PMI (AUG P)
52.4 (A)
52.4
Medium
08:00
EUR
Markit Eurozone Services PMI (AUG P)
54.3 (A)
54.0
Medium
08:30
GBP
Public Finances (PSNCR) (JUL)
-3.0B (A)
15.4B
Low
08:30
GBP
Central Government NCR (JUL)
-0.2B (A)
17.8B
Low
08:30
GBP
Public Sector Net Borrowing (JUL)
-2.1B (A)
8.6B
Low
08:30
GBP
PSNB ex Banking Groups (JUL)
-1.3B (A)
9.4B
Low
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EURUSD
1.0922
1.1060
1.1151
1.1198
1.1289
1.1336
1.1474
GBPUSD
1.5474
1.5570
1.5630
1.5666
1.5726
1.5762
1.5858
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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