US dollarThe risk-off trades sneaked in this Thursday, fuelled by the Yuan sell-off and the Fed minutes, which tempered rate cut expectations. The Asian equities traded mostly lower alongside the US equity futures and Treasury yields.
Across the forex space, the anti-risk Yen cheered the risk-averse mood, with USD/JPY down -0.20% below 106.50 region. In turn, the EUR/USD pair and Cable traded almost unchanged, although the bias leaned towards the downside ahead of the key event risks.
It’s the all-important PMI Thursday today, with the focus on the German and Eurozone Purchasing Managers’ Index (PMI) manufacturing and services readings for August, which will set the tone for the EUR markets in the coming days.
Markets already dread the looming German recession fears and a drop in the PMI numbers is likely to further fuel the concerns and calls for fresh stimulus to combat dwindling economic growth.
Also, the European Central Bank (ECB) Monetary Policy Meeting Accounts, due at 11:30 GMT, will be closely eyed for fresh hints on the ECB’s stimulus plans. Ahead of the ECB event, the UK CBI Distributive Realized Sales will be reported at 10:00 GMT, but the data is unlikely to have any impact on the pound ahead of the meeting between the UK PM Johnson and French President Macron on the Brexit problem.
In the NA session, the US Jobless Claims, Markit Manufacturing and Services PMI data, and Eurozone Consumer Confidence will grab some attention for fresh trading impetus amid looming US-China trade risks. Further, the comments from the US President Trump will be closely eyed ahead of the 3-day Fed’s Jackson Hole Symposium, starting later today.
Gold prices failed to benefit from the risk-off flows, as the US dollar held onto the overnight gains against its main competitors. Meanwhile, the upside in both crude benchmarks was capped by a limited demand for the risk assets.