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Overnight, sentiment on risk remained negative in Asia...

Wednesday, September 5, 2012 4:20 AM GMT

   Good Morning ,

  -  Overnight, sentiment on risk remained negative in Asia. Of late, the

link between risk and EUR/USD was not that tight anymore, but risk off

is also no help for the single currency. This morning it reinforced

yesterday’s technical correction of EUR/USD with the pair testing

offers in the 1.2525 area. The Aussie dollar is losing further ground as

the Q2 GDP was reported slightly weaker than expected (0.6% Q/Q

vs 0.7% expected).

-On Tuesday, despite the return of US traders, activity remained subdued and investors were in no mood to give global core markets (and other main markets) firm direction. Indeed, investors stayed sidelined waiting for the key ECB meeting on Thursday and the US payrolls on Friday.

- Currency traders are also in a wait-and-see mode ahead of the ECB meeting. However, the recent short

squeeze of the euro has apparently run its course. EUR/GBP and EUR/USD are drifting lower from the

recent highs.

- Yesterday, the Austrian debt agency successfully tapped the off the run 10-yr RAGB (€0.5B 4.3% Sep2017) and the on the run 7-yr RAGB (€0.6B 1.95% Jun2019) for a total competitive amount of €1.1B. An additional 10% of each volume was set aside for secondary market operations. So far, Austria completed 78% of this year’s expected issuance. Today, the German Finanzagentur launches a new 10-yr Bund (€5B 1.5% Sep2022).

China’s services sector grow at its slowest pace in a year in August,

the HSBC services PMI showed early this morning. The index fell from

53.1 to 52.0 in August, although hiring picked up and wages

increased during the month.

-  Bank of Japan board member Miyao said this morning the central

bank will keep scrutinizing the outlook for the economy and stands

ready to act to support if needed, but added that they need to be

mindful of drawbacks of unorthodox policy.

- Australia’s economy continued to post solid growth in the second

quarter, but moderated from the first three months of the year. The

Australian economy grew by 0.6% Q/Q, but the future looks more

difficult due to tumbling export prices and slowing growth in China.

Today, the eco calendar remains rather thin with only the euro zone

(final) services PMI and retail sales. The Bank of Canada will decide on rates                                                                                     and EU President Van Rompuy meets French President  Hollande  

 

Have a nice day !

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