Monday registered another negative day for many European equity indices, the European STOXX closed down 1.08%, the UK FTSE closed down 0.53%, the CAC closed down 0.97%. Italy’s principal index, the MIB nearly registered the largest fall of 2.46% only outdone by the Athens exchange fall of 2.95%.
USA indices also closed down, albeit not by the same margins experienced in Europe; the DJIA closed down 0.47%, the SPX closed down 0.59% and the NASDAQ closed down 0.38%.
ICE WTI oil closed down 0.49% at $106.76 per barrel, NYMEX natural closed up 2.82% at $3.46 per therm. COMEX gold closed down 0.39% at $1365.70 per ounce, whilst silver on COMEX closed down 0.67% at $23.22 per ounce.
Equity index futures at 11:15 PM August 19th
The Nikkei equity index future is currently down 0.65%, the CSI is up 1.28%, the Hang Seng is down 0.10%. The ASX 200 is currently up 0.32%.
Equity futures for Europe are mostly negative suggesting the markets will open in the red on Tuesday morning. The UK FTSE equity index future is currently down 0.41%, STOXX is down 1.02%, the CAC is down 0.92%, the DAX down 0.25%, whilst the IBEX equity index figure is currently printing down 1.94%. The Athens exchange equity index future is down 2.75% at the time of writing.
The DJIA equity index future is up marginally by 0.04%, the SPX up 0.02% and the NASDAQ up 0.07% suggesting a positive opening for the USA markets in the afternoon.
FX in focus
The euro rose 0.1 percent to 130.09 yen late in the New York session on Monday after appreciating to 131.03 yen, the highest level seen since Aug 5th. The 17 nation common currency rose 0.1 percent to $1.3335 after climbing to $1.34 on Aug 8th, the strongest level seen since June 19th. The yen weakened less than 0.1 percent to 97.55 per dollar.
The euro rose to a two-week high versus the yen after Germany’s Bundesbank said the European Central Bank’s pledge to keep borrowing costs low doesn’t rule out higher interest rates in order to curb inflation.
The single currency advanced versus most of its sixteen major counterparts as Germany’s central bank said in its monthly report that forward guidance “doesn’t rule out an increase in the benchmark rate if greater inflation pressure emerges.” The yen weakened for a second day versus the dollar as Japan reported a trade deficit.
The loonie depreciated by 0.1 percent to C$1.0345 per U.S. dollar late in Toronto after losing 0.5 percent last week. One loonie currently buys 96.67 U.S. cents. The currency traded between C$1.0348 and C$1.0316, a 0.32 cent gap that was the smallest since May 6th.
The loonie has lost 0.7 percent this year versus nine developed-nation currency peers tracked by Bloomberg Correlation-Weighted Indexes. The U.S. dollar has gained 4 percent, the euro has rallied 5.3 percent. Canada’s dollar traded in the narrowest range since May before reports this week are released forecasting retail sales shrinking and Canada’s consumer price index remaining below the central bank’s inflation target for a 15th successive month.
Fundamental policy decisions and high impact news events for August 20th
As investors and traders get their feet under their desks early Tuesday morning they’ll have already felt the impact of Australia’s RBA monetary committee minutes. It’s a detailed record of the RBA Reserve Bank Board’s most recent meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates. If it’s more hawkish it’ll be beneficial for the Aussie versus its major currency peers.
Thereafter Tuesday is relatively quiet for high impact news events. Japan’s all industry activity will also be published in the early morning/overnight Asian session, the expectation is for a fall to -0.6% from the previous month’s 1.1%. Any significant departure from this prediction could once again bring into question the much fabled Abenomics strategy of Japan’s economic minister and prime minister.