Australian Dollar is sold off deeply in Asian session after poor PMI data. In particular, unemployment component of the PMI dropped sharply to the lowest level since survey began in 2016. Additionally, in a report published today, Westpac brought forward the timing of forecast on next RBA rate cut, from November to October. It noted that the path of unemployment will be “sufficiently contrary” to RBA’s plan. Further more, Westpac’s “terminal rate forecast” was lowered from 0.75% to 0.50%. That is, it expect another cut in February 2020.
Staying in the currency markets, Swiss Franc is the second weakest for today so far, retreating some of yesterday’s gains. New Zealand Dollar is the third weakest, after trade surplus widened to NZD 365M in June. On the other hand, Yen is the strongest one, followed by Sterling and then Dollar. The Pound is mixed after Boris Johnson finally confirmed winning Conservative leadership. Leaving the EU with a deal remains our base scenario. Nonetheless, Johnson’s hardliner rhetoric has inevitably increased the chance of a no deal Brexit. More in Brexit Update – New PM, Old Challenge
In Asia, currently:
- Nikkei closed up 0.34%.
- Hong Kong HSI is up 0.71%.
- China Shanghai SSE is up 0.87%.
- Singapore Strait Times is up 0.08%.
- Japan 10-year JGB yield is down -0.0016 to -0.0147.
Overnight:
- DOW rose 0.65%.
- S&P 500 rose 0.68%.
- NASDAQ rose 0.58%.
- 10-year yield rose 0.031 to 2.074.
