Headlines:
- US futures pull higher as the optimism holds
- USD/JPY extends rebound, draws in key near-term levels again
- BOJ’s Uchida urges caution when considering timing of next rate hike
- BOJ’s Uchida: Markets are still volatile so it is unclear how that will affect outlook
- ECB’s Rehn: Recent market turmoil is an overreaction to uncertainty and thin liquidity
- Germany June industrial production +1.4% vs +1.0% m/m expected
- Germany June trade balance €20.4 billion vs €23.5 billion expected
- France June trade balance -€6.09 billion vs -€7.99 billion prior
- UK July Halifax house prices +0.8% vs +0.3% m/m expected
- US MBA mortgage applications w.e. 2 August +6.9% vs -3.9% prior
Markets:
- NZD leads, JPY lags on the day
- European equities higher; S&P 500 futures +1.1%
- US 10-year yields up 4.9 bps to 3.937%
- Gold up 0.2% to $2,395.62
- WTI crude up 1.9% to $74.63
- Bitcoin up 0.7% to $56,960
The rebound continues as markets are finding a calmer mood once again in trading today.
This was helped earlier in Asia when BOJ deputy governor Uchida ruled out rate hikes so long as markets remained “unstable”. That breathed life into Japanese yen pairs, with USD/JPY rising by over 300 pips to 147.90.
Uchida then came out to clarify that his view is still in line with BOJ governor Ueda and said that the recent volatility merely presented more uncertainty towards their next policy move. That helped to see USD/JPY come back down to 146.07 before finding a bounce to hold near 2% higher now just above 147.00.
Looking to the rest of FX, the dollar is keeping more mixed in general. It is down against the commodity currencies but holding higher against the Swiss franc as well. USD/CHF is up 1.3% to 0.8620 as market fears ebb during the session.
Meanwhile, AUD/USD is up 0.7% to 0.6565 and NZD/USD up 1.1% on the day to 0.6020 currently.
In the equities space, European stocks are posting well over 1% gains and US futures are also holding near the highs ahead of the open later. That’s a vote of confidence as Wall Street looks enter the fray at least.
The bond market is also helping to keep the calm, with 10-year yields in the US seen up 4 bps to 3.927% currently.
This article was written by Justin Low at www.forexlive.com.
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