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Bob Mason
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Earlier in the Day:

It was a relatively quiet Asian session on the economic data front this morning.

Economic data through the session included Japan and China service sector PMI numbers for July.


Outside of the numbers, geopolitical risk continued to provide direction in the wake Trump’s Thursday tweets and Friday’s sell-off.

For the Japanese Yen

The service sector PMI fell from 51.9 to 51.8 in July, which came short of a forecasted increase to 52.3. According to the Markit survey,

  • New business from abroad steadied following a marked decline in June. That said, demand rose at a slower extent in July.
  • While employment levels increased for a 31st consecutive month, the rate of job creation fell to the weakest since October.
  • Firms remained optimistic going into the 3rd quarter, though the level of confidence slid to the lowest in nearly 2-years.

The Japanese Yen moved from ¥106.301 to ¥106.348 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.45% to ¥106.11 against the U.S Dollar

Out of China

The Caixin services PMI stood at 51.6 in July, falling from 52.0 in June to the lowest level in 5-months.  Economists had forecasted a hold at 52.0.

According to the July Caixin Composite Survey,

  • New orders within the services sector supported further upward momentum across the private sector, in spite of orders rising at a slower pace.
  • A rebound in new orders from overseas, within the services sector, also supported a pickup in new export orders at the composite level.
  • Job creation across the services sector was modest as firms looked to manage costs in a softer business activity growth environment. At the composite level, there was a marginal reduction in headcount for a 3rd consecutive month.
  • Overall private sector confidence rose to a 3-month high in July. While confidence across the manufacturing sector improved from a June record low, it was service sector confidence that was key.

The Aussie Dollar moved from $0.67645 to $0.67695 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.44% to $0.6771.


The Kiwi Dollar was down by 0.54% to $0.6501.

Risk aversion weighed through the Asian session, driving support for the Yen at the expense of the Aussie Dollar and Kiwi Dollar.


The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Key stats due out of the Eurozone include Spanish and Italian services PMI figures for June. While France and Germany’s finalized PMIs will have a limited impact, we would expect the Eurozone’s composite PMI to also influence.

Outside of the numbers, market risk sentiment towards the U.S – China trade war will also be a factor on the day.

At the time of writing, the EUR was up by 0.11% to $1.1120 as the Dollar struggles amidst the latest trade spat.

For the Pound

It’s a relatively quiet day ahead on the data front, with July services PMI numbers to provide the Pound with direction.

While we would expect the headline number to provide direction, the devil may well be in the details on the day.

Outside of the numbers, expect Brexit chatter and sentiment towards a no-deal Brexit to also influence on the day.

At the time of writing, the Pound was down by 0.02% to $1.2160.

Across the Pond

It’s a relatively busy for the Greenback, with key stats due out of the U.S including finalized Markit services and composite PMIs and the market’s preferred ISM non-manufacturing PMI.

Barring material deviation from prelim, the ISM figures will be the key driver on the day. Expect the sub-indexes for activity, new work, employment, and optimism to also have an impact on the day.

Outside of the numbers, chatter from the Oval Office will also be key.

At the time of writing, the Dollar Spot Index was down by 0.17% to 97.906.

For the Loonie

There are no material stats due out in the day ahead. With the economic calendar bare, market risk appetite will be the key driver on the day.

Negative sentiment towards trade and the global economic outlook weighed early on.

The Loonie was down by 0.10% at C$1.3220, against the U.S Dollar, at the time of writing.

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