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Bob Mason
Gold daily chart, September 20, 2018

Earlier in the Day:

Economic data released through the Asian session this morning was limited to trade August figures out of Australia

For the Aussie Dollar, Australia’s trade surplus jumped from a revised A$1.548bn to A$1.604bn in August according to the ABS.

  • Imports were flat for the month, while exports rose by 1%, month-on-month.
  • The increase in exports was attributed to a 13% (A$229m) rise in the export of non-monetary gold and a 3% (A$134m) rise in the export of rural goods that were partially offset by a 1% (A$222m) fall in the export of non-rural goods.
  • On the import front, the import of capital goods rose by 9% (A$569m), which was offset by a 41% (A$289m) slide in the import of non-monetary gold and a 2% (A$264m) fall in the import of intermediate and other merchandise goods.

The Aussie Dollar moved from $0.70945 to $0.70994 upon release of the figures, before easing to $0.7093 at the time of writing, down 0.14% for the session, the jump in U.S Treasury yields offsetting any material upside from this morning’s stats.

Elsewhere, the Japanese Yen, was up by 0.17% to ¥114.33 against the U.S Dollar at the time of writing, the Yen finding some support to partially recover from the overnight slide that came off the back of yet more impressive stats out of the U.S. For the Kiwi Dollar, a jump in U.S Treasury yields weighed, the Kiwi down 0.29% to $0.6495 at the time of writing.

In the equity markets, the Nikkei was in the red, reversing early gains, down 0.22% at the time of writing, the index finding little support from the Yen’s slide to ¥114 levels against the Dollar and the overnight gains in the U.S equity markets, while the ASX200 also in positive territory, up 0.66% at the time of writing. For the Hang Seng, the slide continued early, the Hang Seng down 1.06%, with investors having nowhere to hide early on, trade war jitters continuing to weigh.


The Day Ahead:

For the EUR, there are no material stats scheduled for release through the day to provide direction for the EUR, leaving budget chatter from Italy and market risk sentiment to provide direction through the day.

While upside for the EUR was reversed on Wednesday, following the U.S stats and hawkish FED chatter, uncertainty over what lies ahead on the budget side and Italy’s debt troubles will be a continued concern ahead of the Italy – EU showdown mid-month.

At the time of writing, the EUR was down 0.05% to $1.1472, the Italian Budget and noise from the Oval Office remaining the key risks to the EUR.

For the Pound, it’s a quiet day on the data front, leaving the Pound in the hands of Brexit chatter and news of the Tory Party Conference that ended on Wednesday.

There’s been no good news of late for the Pound, with chatter out of France likely to upset the Pound further, any hopes of UK’s neighbour being supportive seemingly dashed as the French government look to prepare for Britain to depart the EU without a deal.

At the time of writing, the Pound was down 0.09% to $1.2931 with Brexit chatter the key driver through the day.

Across the Pond, economic data due out of the U.S includes the weekly jobless claims figures and August factory orders, factory orders likely to have a greater influence following the ADP nonfarm employment change number on Wednesday, orders forecasted to be Dollar positive.

Hawkish FED Chatter could also be on the cards, with FOMC member Quarles speaking, though FED Chair Powell may have done the necessary work for the Dollar overnight on Wednesday, hawkish sentiment towards the economy and monetary policy providing the Dollar with strong support late in the day.

At the time of writing, the Dollar Spot Index was up 0.32% to 96.065, with today’s stats and Oval Office chatter the key drivers through the day.

For the Loonie, after a quiet first half of the week on the data front, the September Ivey PMI is scheduled for release this afternoon. Following the conclusion to NAFTA talks, focus will now have shifted to the Canadian economy and monetary policy. Positive stats this afternoon could provide further support for the Loonie as the markets now begin to consider whether an October rate hike is on the cards.

At the time of writing, the Loonie was down 0.12% to C$1.2883 against the U.S Dollar.

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