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Market Wrap
• Wall St. saw solid gains overnight with the Nasdaq closing +.7%, the Dow Jones +.6%, and the S&P 500 +.4%. U.S. 10-year yields were unchanged at 3.78%, while crude oil fell 3.1% to $67.50. The USD was softer across the board which saw the AUD/USD close near its high of .69045.
• Asian equities surged over the session, the Nikkei up +2.8%, while Hang Seng and Shenzhen closed +4.2% as China looked to issue US$284.4b of sovereign debt this year. Locally, ASX finished +1% as consumer discretionary and info tech outperformed. AUD/USD rallied 43pts over the day from 0.6819 to 0.6862.
• European equities also performed stronger on open: the Stoxx, CAC and DAX over +1%, while the FTSE trailed +0.3%. The US 10yr retreated slightly to 3.77% as Brent tumbled over 3% below $72 per barrel. EUR/USD and GBP/USD were both bid trading a touch off 1.1158 and 1.3358 highs.
• The greenback remained on the backfoot into the London lunch as the antipodes ground higher to 0.6887 and 0.6309. EUR/USD and sterling too rose to 1.1166 and 1.3388 as USD/JPY slid back to 144.11. US equities remained strong ahead of open, S&P 500 minis up 0.8%.
• US Q2 GDP was confirmed at 3.0% against expectations of a downwards revision to 2.9% though Personal Consumption was unexpectedly revised down to 2.8% from 2.9%. Core PCE was confirmed at 2.8% as expected. August Durable Goods Orders were flat MoM to print much higher than forecasts of -2.7% with the core measure at +0.5% against 0.1% forecasts. Also released and weekly jobless claims data was mixed with initial claims marginally better than expected at 218k while continuing claims were marginally worse than expected at 1.834 mio.
• The greenback was generally supported in the aftermath of the data though the antipodeans managed to make marginal new highs of 0.6889 and 0.6316 before sliding lower. Other majors generally sliding back to trade near the middle of their respective daily ranges.
• Released later in the NY morning and US Pending Home Sales for August rose by 0.6% MoM, up from -5.5% though short of expectations of +1.0%. No reaction to the data with USD/JPY popping to 145.22 highs before sliding while USD/CAD briefly hit 1.3489 highs though otherwise the greenback sold off into the London rate set. This helped EUR/USD up to 1.11745 highs while GBP/USD traded above 1.3400. The antipodeans also moving higher though only more modestly.
• Wall St was firmer across the NY morning with the Dow up near 0.5% though gains were more modest on the S&P and Nasdaq. European markets held gains into the close with the CAC leading the way with gains of 2.3% at the closing bell while the DAX closed up 1.7%. The FTSE underperformed with gains of just 0.2% on the day.
• The USD suffered further losses into the NY afternoon with AUD/USD moving up through 0.6900 to hit highs of 0.69045 while NZD/USD made highs above 0.6330 and EUR/USD moved up to 1.1189.
• Wall St. remained solid late in the day with the Nasdaq trading +.7%, the Dow Jones +.6%, and the S&P 500 +.4%.
Mid-market rates.
| Currency Pair | Mid-market rate |
| AUD/USD | 0.6888 |
| AUD/NZD | 1.0888 |
| AUD/JPY | 99.92 |
| AUD/CNH | 4.8072 |
| AUD/EUR | 0.6163 |
| AUD/GBP | 0.5138 |
| AUD/HKD | 5.3578 |
Chart of the day
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