Musk clarifies tweet about Man Utd bid, says he is not buying any sports teams

United fans can breathe a sigh of relief I guess. As bad as the Glazers are, it would be shambolic to imagine the football club being ran like a circus act. That said, we’re still bottom of the table. You don’t get to sing that every day. 🥲

Steady tones going into European trading

What a timeline we’re living in. Elon Musk is up to his typical shenanigans again and you can’t quite tell if he’s really being serious or not, despite it all being seemingly like a joke. Either way, that seems to be the most interesting story so far today.

Coming back to more serious topics in markets, the RBNZ raised the OCR by 50 bps as expected and alluded to a steeper and higher rate path moving forward. That helped to see the kiwi gain slightly before giving that all back now to remain rather flattish.

Other major currencies
Currencies

Currencies are a typically a form of money in wide circulation, being the primary medium of exchange with respect to buying and selling goods and services. These are often issued by a specific government or collection of governments, by way of paper notes and coins. Other forms of currencies include previous metals such as gold and silver, and digital currencies such as Bitcoin. Currencies serve as a backbone of the country’s or countries’ economy, due to the perception of value held by the population that uses that currency.For example, the United States dollar, (symbol $, code USD), or the British pound sterling, (symbol £, code GBP), also known as fiat money, since they are not linked to any specific asset, such as gold or silver. Such metals were traditionally used as the main method of payment, since they held real and actual value. Even after the introduction of paper notes, many countries maintained a gold standard for much of the 20th Century, meaning a unit of money could be exchanged for a fixed amount of gold. How to Trade Currencies?The modern world, with the invention of electronic networks, computers and the internet, has allowed the transfer of money to occur almost instantaneously. It has also spawned a new era in currencies, including digital money, such as Bitcoin and Litecoin. Not backed by any government, but based on a complex set of mathematical software algorithms, the ubiquity of the internet has generated interest and uptake of digital currencies, whilst providing relative anonymity. Digital currencies can now also be traded online, via exchanges and brokers, similar to trading foreign currencies, known as the foreign exchange market. Forex is the world’s largest market, with over $5 trillion turnover per day, where fiat, floating currencies are bought and sold against other currencies, such as the euro vs the dollar (EUR/USD), and the British pound vs the Japanese yen (GBP/JPY).

Currencies are a typically a form of money in wide circulation, being the primary medium of exchange with respect to buying and selling goods and services. These are often issued by a specific government or collection of governments, by way of paper notes and coins. Other forms of currencies include previous metals such as gold and silver, and digital currencies such as Bitcoin. Currencies serve as a backbone of the country’s or countries’ economy, due to the perception of value held by the population that uses that currency.For example, the United States dollar, (symbol $, code USD), or the British pound sterling, (symbol £, code GBP), also known as fiat money, since they are not linked to any specific asset, such as gold or silver. Such metals were traditionally used as the main method of payment, since they held real and actual value. Even after the introduction of paper notes, many countries maintained a gold standard for much of the 20th Century, meaning a unit of money could be exchanged for a fixed amount of gold. How to Trade Currencies?The modern world, with the invention of electronic networks, computers and the internet, has allowed the transfer of money to occur almost instantaneously. It has also spawned a new era in currencies, including digital money, such as Bitcoin and Litecoin. Not backed by any government, but based on a complex set of mathematical software algorithms, the ubiquity of the internet has generated interest and uptake of digital currencies, whilst providing relative anonymity. Digital currencies can now also be traded online, via exchanges and brokers, similar to trading foreign currencies, known as the foreign exchange market. Forex is the world’s largest market, with over $5 trillion turnover per day, where fiat, floating currencies are bought and sold against other currencies, such as the euro vs the dollar (EUR/USD), and the British pound vs the Japanese yen (GBP/JPY).
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are also little changed except for the aussie, which is down 0.4% to test waters just below 0.7000 again up against the dollar.

US futures are looking rather muted after a mixed day while the bond market continues to leave a lot to be desired since last week. 10-year Treasury yields are little changed at 2.82% currently, still keeping below its 100-day moving average at 2.89%.

It looks like we could be in for a quiet one in Europe with all eyes switching to the US retail sales and FOMC meeting minutes later today.

ForexLive Asia-Pacific FX news wrap: AUD drops on data, NZD up on RBNZ

Oil
prices were fairly steady during the session here. Speculation on the
fate of the nuclear deal talks continued to mount. Goldman Sachs had
a piece out with their assessment that a deal was unlikely in the
near term. Goldman Sachs went on to state the obvious, saying that even if a
deal is reached there would be no meaningful additional flows until
the beginning of 2023 at the earliest.

The
next item of note was from Australia, where wages data showed
continued growth during Q2, although the extent did miss the central
estimate. The Australian dollar was marked down on the data result.
It has retraced its loss to be slightly lower on the day as I post.

On
the central bank front we then had the Reserve Bank of New Zealand
decision. In addition to hiking the official cash rate (OCR) by the
expected 50bp the RBNZ issued revised projections for the OCR ahead.
These showed the cash rate is expected to be raised higher than was
previously forecast. NZD/USD had dropped a little on the Australian
data earlier but was then marked higher on the RBNZ. Its since
dropped back from highs just above 0.6380.

More on Goldman Sachs saying a near term nuclear deal with Iran is unlikely

Earlier headline is here:

GS:

  • “Our view continues to be that a deal is still unlikely in the short term, with a stalemate mutually beneficial,”
  • Even with a breakthrough, there would likely be a “phased implementation,” with barrels unlikely to return until the start of 2023 at the earliest

Info via Bloomberg (gated) but there is no further detail.

Iran’s parliament will hold a closed session on Wednesday to discuss nuclear deal

Iran’s parliament has scheduled a closed session for 17 August 2022 (local time) on the latest developments on the talks in Vienna with the EU on the nuclear deal.

MPs will be briefed on progress of the talks.

Info comes via Twitter, @AbasAslani

Australian dollar hit lower after Q2 wages data miss

Data is here, a small miss but check out the post for the rel wage data, which is very ugly.

While the data is a miss it is in line with what the RBA has forecast. This takes some of the argument for a 50bp rate hike in September (the 6th) away. Not from me, I reckon lock it in FWIW.

The Wage Price Index is not necessarily a useful indication of actual pay. But, hey, headlines and spot FX, amIright? (Its enough to trigger some marking down of AUD to attack some stops just under the market).

AUD
AUD

The Australian dollar (AUD) is the official currency of Australia, which is also used in Christmas Island, Cocos (Keeling) Islands, Norfolk Island, as well as independent pacific states.Introduced in 1966, the AUD is currently the fifth most traded currency in the world, behind only the US dollar, euro, Japanese yen, and British pound.The currency is very important to forex markets and is routinely used as a carry trade against other majors.The Reserve Bank of Australia (RBA) is the central banking authority tasked with the management and issuance of AUD banknotes.What Factors Affect the AUD?The AUD is more susceptible than other currencies to macroeconomic factors. Overall, monetary policy is the largest mover of the currency, including interest rate differentials.Beyond Australia, commodity prices such as those of precious metals and others are also important to the AUD and can cause fluctuations in its value relative to other currencies.Global risk sentiment and confidence are also indicators that are closely tracked given their correlation to the AUD.This is due to the AUD being seen as a commodity currency, and also used as one of the most popular growth and risk proxies in global financial markets.Any positive mood in the global market will likely cause the AUD to climb, while if there is a prevailing pessimism, the AUD will often decline.On a domestic scale, government credit ratings can also impact the AUD. Australia’s credit rating influences the risk profile of its debt.This trend directly influences the cost the government has to pay on the debt it owes.

The Australian dollar (AUD) is the official currency of Australia, which is also used in Christmas Island, Cocos (Keeling) Islands, Norfolk Island, as well as independent pacific states.Introduced in 1966, the AUD is currently the fifth most traded currency in the world, behind only the US dollar, euro, Japanese yen, and British pound.The currency is very important to forex markets and is routinely used as a carry trade against other majors.The Reserve Bank of Australia (RBA) is the central banking authority tasked with the management and issuance of AUD banknotes.What Factors Affect the AUD?The AUD is more susceptible than other currencies to macroeconomic factors. Overall, monetary policy is the largest mover of the currency, including interest rate differentials.Beyond Australia, commodity prices such as those of precious metals and others are also important to the AUD and can cause fluctuations in its value relative to other currencies.Global risk sentiment and confidence are also indicators that are closely tracked given their correlation to the AUD.This is due to the AUD being seen as a commodity currency, and also used as one of the most popular growth and risk proxies in global financial markets.Any positive mood in the global market will likely cause the AUD to climb, while if there is a prevailing pessimism, the AUD will often decline.On a domestic scale, government credit ratings can also impact the AUD. Australia’s credit rating influences the risk profile of its debt.This trend directly influences the cost the government has to pay on the debt it owes.
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update:

NZD/USD is down alongside the AUD. Not as much.

Australian Q2 wages data +0.7% q/q (expected 0.8%)

Jiangsu Province China to limit power to manufacturers to ensure electricity for homes

Info comes from Economic Daily.

Jiangsu Province plans to limit power to manufacturers in order to ensure electricity for homes amid a heatwave

This adds to a power cut to laptop producers in Sichuan Province, August.. 15-20.

Jiangsu Province is a major IT manufacturing area.

Also;

Toyota and Contemporary Amperex Technology Co. (the world’s biggest battery maker) have announced factory closures due to the impact of a drought-induced power crisis in China’s Sichuan province

Westpac-Melbourne Institute Leading Index still pointing to above trend growth in 2022 H2

Westpac data, comments from analysts at the bank:

  • The six-month annualised growth rate in the Westpac-Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, increased to 0.63% in July from 0.48% in June.
  • The Index growth rate has held broadly steady over the last three months after an abrupt slowdown earlier in the year from a strongly above trend starting point. Latest reads are consistent with momentum continuing to track slightly above trend heading into year-end.

Via WPAC:

Singapore data – July NODX +1.4% m/m (expected -3.8%) & +7% y/y (expected +6%)