Action Insight Mid-Day Report 9-4-19

Yen Lower on Return of Risk Appetite, Sterling Support by Hope of No No-Deal Brexit

Action Insight Mid-Day Report 9-4-19 Yen Lower on Return of Risk Appetite, Sterling Support by Hope of No No-Deal Brexit Yen drops broadly today, as stock markets rally on supposed easing tension in Hong Kong. After more than two months of continuing protests, Hong Kong leader Carrie Lam finally announced withdrawal of the controversial extradition bill today. HSI closed up 3.9% on rumors leading to the announcement while HK and China related stocks in Europe also lead others higher. However, it should be noted that only one of the five demands of the protesters is met. It's seen generally as being "too little, too late". Most importantly, the widely supported demand of an independent judiciary on police brutality was rejected. Threat of being a police state remains. Protests in Hong Kong would not stop at this stage, in particular with the debate of HK human right and democracy act in US Congress scheduled for next week. Staying in the currency markets, Dollar is currently the second weakest, followed by Canadian Dollar. The Loonie is cautious ahead of BoC rate decision. While BoC is widely expected to stand pat, there could be a dovish turn in the accompanying statement. On the other hand, Sterling is the strongest one, riding on hope of averting no-deal Brexit. Australian Dollar is the second strongest, followed by Euro. In Europe, currently, FTSE is up 0.54%. DAX is up 1.11%. CAC is up 1.24%. German 10-year yield is up 0.052 at -0.652. Earlier in Asia, Nikkei rose 0.12%. Hong Kong HSI rose 3.90%. China Shanghai SSE rose 0.93%. Singapore Strait Times rose 1.29%. Japan 10-year JGB yield dropped -0.0086 to -0.284. Full Report Here US trade deficit narrowed to $54.0B, deficit with China also dropped ECB Lane: Lot of weight attached to mediocre inflation outcomes Eurozone retail sales dropped -0.6% in July, matched expectations Lagarde: ECB needs to listen and understand markets, but not guided... UK Johnson to seek general election but Corbyn refuses to fall... UK PMI services dropped to 50.6, PMIs suggests -0.1% GDP contraction... Eurozone PMI services finalized at 53.5, GDP to rise just 0.2%... Australia services returned to mild expansions China Caixin PMI services rose to 52.1, economy showed clear signs... Australia GDP grew 0.5% in Q2, strengthen the case for RBA... Top Movers | HeatMap | Pivot Points | Pivot Meters | Action Bias | Vol Brexit Update – MPs Move to Pass a Bill to Reject... RBA Left Rate Unchanged, More Flexible on Future Policy Decision CFTC Commitments of Traders – Long Bets Increased for Safe Haven... Central Bank Views | China Watch | Oil N' Gold | Special Topics USD/JPY Mid-Day Outlook Daily Pivots: (S1) 105.66; (P) 106.03; (R1) 106.31; More... USD/JPY recovers mildly today but stays below 106.73 resistance. Intraday bias remains neutral first. As long as 106.73 resistance holds, further fall is expected. On the downside, break of 104.45 will resume recent down trend to 100% projection of 112.40 to 106.78 from 109.31 at 103.69. However, firm break of 106.73 will indicate short term bottoming and bring stronger rebound back to 55 day EMA (now at 107.22) and above. Full Report Here EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY Recommended Readings EURJPY Declines Below 2017 Low, Bulls Recoup Losses US Open – Lam Withdraws Extradition Bill, Death By Parliamentary Vote, Oil Rises, And Gold Stalls Crude Oil Rebound Could Be Short-Lived AUD/USD Outlook: Strong Rebound Extends Into Second Day And Eyes Key Barriers USD Weakens On Poor Factory Data GBPJPY Corrects Tuesday's Damage But Still Exposed To Downside Risks Brexit Turmoil Deepens But Pound Steadies On Weaker Dollar US Futures Trade Higher | Bojo's Plan Gets No-Go | Gold To Break 1600 Brexit Uncertainty Sends Sterling Into A Rollercoaster Ride Brexit Monitor: Snap Election Will Be An EU Referendum In Disguise Fundamental Analysis | Technical Analysis In-depth Reports RBA Left Rate Unchanged, More Flexible on Future Policy Decision RBA Board Leaves Rates on Hold; Slightly More Downbeat; October the Likely Next Step Japan's Consumption Tax Hike Unlikely to Help Inflation Much China Cuts Banks' Lending Rates as Trade War Escalates Can Monetary and Fiscal Stimulus Save the Global Economy from Trump's Trade War? Trade War, Not Protests, is Key Reason For Slowdown. USDHKD Peg Not at Risk Economic Calendar GMT Ccy Events Actual Forecast Previous Revised 22:30 AUD AiG Performance of Service Index Aug 51.4 43.9 01:00 NZD ANZ Commodity Price Aug 0.30% -1.40% 01:30 AUD GDP Q/Q Q2 0.50% 0.50% 0.40% 0.50% 01:45 CNY Caixin PMI Services Aug 52.1 51.8 51.6 07:45 EUR Italy Services PMI Aug 50.6 51.5 51.7 07:50 EUR France Services PMI Aug F 53.4 53.3 53.3 07:55 EUR Germany Services PMI Aug F 54.8 54.4 54.4 08:00 EUR Eurozone Services PMI Aug F 53.5 53.4 53.4 08:30 GBP Services PMI Aug 50.6 52 51.4 09:00 EUR Eurozone Retail Sales M/M Jul -0.60% -0.60% 1.10% 1.20% 12:30 CAD Labor Productivity Q/Q Q2 0.20% 0.10% 0.30% 0.40% 12:30 CAD International Merchandise Trade (CAD) Jul -1.1B 0.2B 0.1B -0.1B 12:30 USD Trade Balance (USD) Jul -54.0B -54.2B -55.2B -55.5B 14:00 CAD BoC Rate Decision 1.75% 1.75% 18:00 USD Federal Reserve Beige Book

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