DXY eased last night as EUR lifted and CNY fell:
AUD hit new lows in the .70s before rebounding to unchanged:
It was mixed against EMs:
Gold firmed a touch:
Oil jumped on US inventory draws:
Base metals sank:
Big miners too:
EM stocks clung on:
High yield was OK:
Treasuries were sold hard:
Bunds too:
Stocks lifted:
Westpac has the wrap:
Economic Wrap
Another very strong set of US data. Small business optimism rose in August, the National Federation of Independent Business survey up to 108.8 (vs consensus estimate 108.0) – its highest level in the 45-year history of the survey. The underlying detail was strong; hiring intentions hitting an all-time high while capital spending plans at the highest since 2007. The US statistician also reported job openings climbed 117k to 6.939mn in July – another new record high, while the quit rate (the share of workers voluntarily leaving their job and a sign of confidence) rose to its highest level in 17 years.
Eurozone ZEW sentiment surveys rose more than expected, but remain well below last year’s levels. German conditions lifted to 76 (exp. 72.0, prev. 72.6) whilst German expectations remained negative at -10.6 (above the -13.0 expected). Eurozone expectations also remained negative at -7.6 but lifted from -11.1 in July.
UK July unemployment was unchanged at 4.0% but there was a welcome rise in average weekly earnings to +2.9% yoy (exp. +2.8%, previous 2.7%).
Event Risk
Australia: Sep Westpac-MI Consumer Sentiment was last at 103.6. Since the last survey we have seen a change in Prime Minister, and out of cycle mortgage rate rises due to higher funding costs.
US: The Federal Reserve releases its Beige Book on conditions across the twelve districts. Fedspeak involves Bullard speaking to the CFA Society Chicago and Brainard at the Detroit Economic Club Luncheon.
The Aussie dollar was pushed around by trade news but remains under pressure fundamentally because the negative yield spread hit new 20 year wides at the short end and 37 year wides at the long:
The 10 year yield has not been this negative to the US since 1981:
With much more to come!
