International Trading


Risk aversion continued overnight as Asian stock markets traded lower. The Nikkei 225 plunged by -3.55% experiencing its largest percent drop since early June as investors fear that a stronger yen will hurt the export-driven economy. The U.S. dollar traded mostly mixed, the yen remained at elevated levels, and the Swiss franc was the most notable having outperformed the safe haven currencies. EUR/CHF fell to new records lows touching just under 1.2900 and USD/CHF is nearing 2010 lows on a strengthening franc. USD/CHF has so far made session lows around 1.0175.
Japanese economic data came in stronger than expected last night. July preliminary industrial production was expected at -0.2% but rose by +0.3% up from the prior -1.1%, July retail trade also printed better than expected at +0.7% (cons. +0.5% prior +0.4%), and July housing starts surprised to the upside with a reading of +4.3% (cons. 2.0% prior +0.6%). The positive economic data further supported the yen. USD/JPY declined to around 84.05 from session highs around 84.65 and has settled around current levels of 84.40.
As of now, European equities are trading lower across the board. Month-end flows and the heavy economic data stream today is likely to make for a volatile trading environment.
On that data front today we have Canada’s 2Q annualized GDP at 0830EDT. U.S. economic data is heavy today and includes the S&P/Case-Shiller home price index at 0900EDT, Chicago PMI at 0945EDT, Conference Board consumer confidence at 1000EDT and the FOMC minutes are to be released at 1400EDT.