Bob Mason
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Earlier in the Day:

After a heavy set of stats through the first half of the week, economic data released through the Asian session this morning was limited to June trade figures out of Australia.

For the Aussie Dollar, Australia’s trade surplus widened from a downwardly revised A$0.725bn to a record A$1.873bn in June, according to figures released by the ABS.

  • The exports of goods and services rose by A$914m (3%) to A$36,439, with exports of non-rural goods (+2%), rural goods (+5%) and non-monetary gold (+6%), together with a 1% rise in services contributing to the widening.
  • Imports of goods and services fell by A$233m to A$34,567m, with the imports of intermediate and other merchandise goods falling by 4% and non-monetary gold by 15%, with the import of consumption goods also in decline, while a 5% rise in the import of capital goods offset some of the downside. Services also slipped in June.

The Aussie Dollar moved from $0.74054 to $0.74047 upon release of the figures, the markets showing little response to the number, with an escalation in trade war rhetoric weighing on commodities, pulling back the Aussie Dollar, which was down 0.24% to $0.7386 at the time of writing.

Elsewhere, the Kiwi Dollar was down 0.15% to $0.6781, while the Yen was up 0.11% to ¥111.58 against the U.S Dollar, support coming off the back of the market reaction to Trump’s call to raise the planned 10% tariffs on $200bn worth of Chinese imports to 25%.

In the equity markets, the risk off sentiment spilled over from the U.S session, with the ASX200 and Nikkei seeing modest losses, down 0.34% and 0.59% respectively, at the time of writing, while the CSI300 and Hang Seng were down 2.62% and by 1.97% respectively, the markets responding to the combination of weaker private sector PMI numbers out of China and the exchanges between the U.S and China on trade.


The Day Ahead:

For the EUR, it’s a relatively quiet day ahead, with key stats through the day limited to unemployment numbers out of Spain. While we would normally expect the numbers to have a relatively muted impact on the EUR, weaker 2nd quarter GDP numbers released earlier in the week could see the EUR react to any disappointing numbers, with little else for the markets to focus on from a data perspective.

Outside of the stats, trade war jitters will likely influence, though the EU is likely to be safe from any shift in Trump attitudes following the Juncker meeting last week, focus being placed squarely on China.

At the time of writing, the EUR was down 0.08% to $1.1661, with today’s stats and the Oval Office providing direction through the day.

For the Pound, its Super Thursday. On the data front, July’s construction PMI is scheduled for release through the early part of the morning, which will unlikely have a material impact on the Pound, barring particularly dire numbers, as the markets focus on the interest rate decision and, more importantly, the Bank’s outlook on inflation, the economy and whether Carney points to further rate hikes down the road or suggests the need for a wait-and-see approach as Britain hurtles towards a ‘No Deal’ departure from the EU.

Anything dovish and the Pound could actually slide in spite of any rate hike, which has largely been baked into the Pound in recent weeks, offsetting the negative sentiment towards the British government and progress on Brexit negotiations.

At the time of writing, the Pound was down 0.17% to $1.3105, with pressure likely to remain ahead of the decision and release of the inflation report, which precede the all-important Carney press conference that will likely have a material bearing on the direction in the Pound near-term.

Across the Pond, it’s a relatively quiet day on the data front for the U.S Dollar, with key stats limited to June factory order numbers and the weekly jobless claims figures, which will likely have a relatively limited impact on the Dollar, as the markets focus on the Oval Office and the escalation of words between the U.S and China on trade.

At the time of writing, the Dollar Spot Index was up 0.05% to 94.712, with the Dollar sitting firmly in the hands of the U.S President though the day.

For the Loonie, it’s another quiet day on the data front, with no material stats scheduled for release. The U.S administration’s decision to exclude Canada from the latest round of NAFTA talks will have had the markets a little edgy, but the shift to one-on-one negotiations on key points is likely to be in an attempt to make progress on certain issues including autos that are not pertinent to the Canada.

At the time of writing, the Loonie was down 0.06% to C$1.3012 against the U.S Dollar, with market risk sentiment and NAFTA chatter to provide direction through the day.

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