Japanese Yen and Swiss Franc Strong, European Stocks Broadly Lower

Market Reviews

The sentiment is rather cool today. Aussie dropped to trade as the softest, followed by the greenback, Loonie and Kiwi. Swiss Franc and Japanese Yen broadly reinforced to become the strongest ones on yesterday’s weakness in sterling. Meanwhile, European shares posted losses with FTSE falling -1% , DAX dropping -1.39% and CAC being down -1.54%. CAC breached 5281.78 support and aligned the key support of 5242.64. DAX hit 12104.41 support and broke a triangle pattern.

Chrystia Freeland, Canadian Foreign Affairs Minister, resumed talks with the US Trade Representative Robert Lighthizer. Canadian official reported the dialogue was constructive, and they’re “making good progress”. Freeland also told: “we continue to get a deeper and deeper understanding of the concerns on both sides.” She also informed that her team have sent the US “a number of issues to work on and they will report back to us in the morning (Thursday), and we will then continue our negotiations.” As expected, Bank of Canada stood pat, keeping the rate 1.5%. Q2 growth was described as strong and consistent to the outlook.

Goushi Kataoka (BoJ board member) told he was opposed to BoJ allowing 10 year JGB yield to fluctuate in extended range of -0.1% to 0.1%. He claimed: “there’s no need to allow long-term interest rates to move in a wider range at a time when the BOJ is cutting its inflation forecasts,” and: “allowing long-term rates to rise at a time inflation and inflation expectations aren’t heightening much could delay achievement of the BoJ’s price target.” Kataoka cautioned: “global trade frictions are intensifying and there’s no room for complacency”.

Australia trade surplus contracted to 1.55 billion Aussie in July. Today, Swiss will release Gross Domestic Product, Germany will publish factory orders, US will present ADP employment, jobless claims, ISM services and factory orders and Canada will feature building permits.