Originally published by AxiTrader
Markets Overview:
- Commodities: WTI Crude $48.24 (+0.86 %), Brent Crude $50.19 (+0.76 %), Natural Gas $2.90 (-0.10 %), Gold $1315.87 (-0.34 %), Copper $221.05 (+0.94 %)
What traders are talking about:
Brexit
UK Prime Minister Theresa May announced today that the government will trigger Article 50 by the end of March 2017. Triggering Article 50 will start the negotiation process with the European Union, and the UK will have two years’ time to discuss the terms of its exit.
This has brought Brexit back as one of the main market themes, after it was pushed back by other events, such as the Fed, BoJ and OPEC. The UK economy has been doing well in the first few months after the Brexit vote, but many uncertainties remain and the negotiations with the European Union will unlikely be smooth, which will keep GBP volatility high.
The GBP/USD is already lower in the early Asian session. Imminent support lies at the August low at 1.2865, followed by current yearly low at 1.2789.
Yuan enters IMF basket
China's currency officially joined the IMF's basket of reserve currencies on Saturday. The Yuan will now be used as one of the official lending currencies by the IMF, along with the US Dollar, Euro, Yen and Pound. The move by the IMF is an acknowledgment of China's efforts to internationalize its currency. However, analysts were more sceptical, and consider IMF's move as rather symbolical rather than one that could change markets.
Deutsche Bank involved in another scandal
It has been rough for Deutsche Bank AG (DE:DBKGn) NA O.N. (NYSE:DB), the struggling German-based bank, and there was no good news over the weekend either. On Saturday, an Italian court charged the company for colluding with Banca Monte dei Paschi to falsify the Italian bank's accounts in 2008. As a reminder, there have been increased worries about the stability of Deutsche Bank after the US Department of Justice announced that it will request $14 billion to settle a case about the bank's selling of mortgage-backed securities. The Deutsche Bank stock briefly traded below €10 on Friday, but closed the day eventually at €11.67.
Holidays
Chinese and South Korean markets will be closed today amid public holidays. German markets will also be shut as the country is marking its unification day. Australian markets are open today, but will likely see less than usual activity due to the Labour day holiday in NSW.
Data in the Asian session
The focus in the upcoming session will be on the Japanese Tankan numbers. The large manufacturers index is expected to arrive at 7.0 vs 6.0 previously, while the large non-manufacturers index is anticipated to come in at 18.0 vs 19.0 previously. In the European session, we will get manufacturing PMI figures from the Euro Zone countries and the UK.
The Week Ahead
Tuesday: The main event will be the Reserve Bank of Australia rate decision. The central bank is expected to keep rates unchanged, and the odds of a rate cut are quite low.
Wednesday: We will get Australian retail sales data, and RBA Assistant Governor Kent will speak. In the European session, we will get Services PMI figures out of the Euro Zone countries and the UK. In the US session, the focus will be on US ADP employment change, the US services PMI print and Canadian trade data.
Thursday: Australia will publish its latest trade data. In the EU session, we will get the ECB meeting minutes, followed by US initial jobless claims in the US session.
Friday: The main event of the week: NFP, along with the US unemployment rate and average hourly earnings. At the same time, we will also get Canadian employment data. There will be plenty of Fed speakers shortly after the US employment figures - Fischer, Mester and George.
Economic Calendar (Australian Eastern Daylight Time):
- 09:30 - Australia AIG Manufacturing Index
- 10:50 - Japan Tankan Large Manufacturers Index
- 11:00 - Australia MI Inflation Gauge
- 18:45 - Italian Manufacturing PMI
- 18:50 - French Manufacturing PMI
- 18:55 - German Manufacturing PMI
- 19:00 - Euro Zone Manufacturing PMI
- 19:30 - UK Manufacturing PMI