Europe Summary and Highlights 8 Sep
Some intraday covering / break re-test after the Asia USD/JPY downside extension
AUD/NZD sees a pops after breaking the highs
Energy still in focus after Saudi disruption, ongoing verbal escalation
Europe
Asia follow-through move on USD/JPY into the 153-2 lows proved exhaustive for now with the low of 152.87~, and bounce back for a 154~ break re-test. Obviously very oversold on recent days moves, but no full test/hold of the big 152.10-00 lows yet.
Oil remains under some pressure after US-Iran rhetorical escalations and as Houthi attacks affect Saudi facilities today, Brent pushing at $100 ceiling. Goldmans notes that while crude flow has been 70% pre-war, products have been more like 35%, and sees risks to $120 on Brent if supply remains squeezed.
AUD/NZD picks up on the break of 1.23~ for new post Apr13 highs. 1.2345. 61.8% Fib, 1.2400/50 congestion above. Recent relative CB sentiment going with the grain. RBA’s Hauser notes that focused on upside risks to inflation, RBA’s Hunter suggests board may have to raise rates further if sense that inflation will be stronger, do want to see a softer economy vs trend.
Asia Session
The July Labor Cash Earning arrived very strongly at 4.7% y/y, beating estimates of below 4%. It also mark the most positive real wage since 2021, a seven month consecutive streak. BoJ will be very happy with this report if they are going along the September hike playbook. The caveat remains in household spending, which mean sluggish for the past quarter. USD/JPY caught another fast break below 153 before recouping partial losses at 153.45.
Major equity indexes are performing individually as market participants lack a story being told. Precious metals and oil are trading higher. AUD/USD is trading 0.07% lower at 0.7214. NZD/USD is trading 0.3% lower while USD/CAD slips 0.13%. Else, EUR/USD up 0.03% and GBP/USD unchanged.