Aussie Broadly Boosted, But Eased On Asian Stocks

Market Reviews

Aussie has significantly reinforced on positive GDP report. But the rebound was limited by weakening in Asian stock market. Hong Kong HSI declined -1.65%, China Shanghai SSE was down -0.92%, Singapore Strait Times fell -0.81% and Nikkei dropped -0.25%. Japanese Yen is trading as the softest, followed by the greenback. US treasury yields posted some gains as 30 year yield increased 0.059 to 3.069. 10 year yield lifted 0.049 to 2.902. 5 year yield was up 0.040 to 1.46%. DOW reduced -0.05%, S&P 500 lowered -0.17% while NASDAQ was down -0.23%.

Dollar got subdued by comments from the Minneapolis Fed President Neel Kashkari. He claimed Fed was “raising interest rates too aggressively”, and cautioned that “we might keep raising interest rates and the economy can’t take it and we put the country into recession.” Kashkari also stressed:“I don’t see any indication that we’re running above potential so let’s let it keep running and if we start to see signs that it’s overheating we can always raise rates then.” Minneapolis Fed President confirmed that he had “honest disagreement about this very fundamental question” with other Fed members.

Today, Canada and US will resume their negotiation. Canadian Prime Minister Justin Trudeau stated: “No NAFTA is better than a bad NAFTA deal for Canadians and that’s what we are going to stay with.” And to him, “there are a number of things we absolutely must see in a renegotiated NAFTA.” Mexican Economy Minister Ildefonso Guajardo express his optimism that two sides will conclude talks by Friday. But, judging from their stances, it would be impossible.

Australian Gross Domestic Product of the second quarter rose 0.9% qoq, 3.4% yoy, marking maximum of almost 6 years. Domestic demand increased 0.6% qoq, government expenditure was up 1.0% qoq and new dwelling investments grew 3.6% qoq. Employee compensation lifted just 0.7% qoq. AiG performance of services index fell -1.4 to 52.2 in August. New Zealand ANZ commodity price reduced -1.1% in August. China PMI services fell from 52.8 to 51.5 in August.

Today, Eurozone will publish services PMI final, UK will present services PMI, US will feature trade balance, Canada will announce trade balance and labor productivity. Additionally, Bank of Canada is scheduled to announce its rate decision. Rate is expected to remain at 1.50%. However, BoC is projected to hint a hike in October.