• Sell-off in EM currencies paused overnight with TRY strengthen 8% and ZAR and MXN strengthen 1.30% each. The UST 10yr is firmer at 2.89%, and the dollar index (KTM: USDX) continued to settle above 96.00 and closed at a 14-month high.
  • Turning to commodities, Gold and Silver manage to hold Monday’s low 1191$ and 14.96$ respectively. Besides, Brent oil down nearly a percent. Overall another weeknight for commodities.
  • Elsewhere, Bitcoin fell to 5855$ but held the parallel support zone finds between 5630-5766$. Ethereum drifted to 243$, tested the 200EA (weekly).

Data review:

  • The German economy continues to grow in the 2Q 2018. The GDP rose 0.5% on the previous quarter;
  • UK unemployment rate fell to 4.0%; it has not been lower since December 1974 to February 1975;
  • Average weekly earnings increased by 2.4% including bonuses;
  • GDP rose by 0.4% in the EA during the 2Q of 2018;
  • The ZEW Indicator of Economic Sentiment for Germany recorded an increase of 11.0 points in August 2018 and now stands at minus 13.7 point.

What’s on today?
Data wise today’s Asian-pacific region main focus will be on the release of the Australia Q2 Wage Price Index. Moving to Europe UK CPI is the GBP key data risk event to watch out. Turning to the US, Retail sales and IP grabs the attention.

Australia Wage Index: We expect the index to pick up at 0.6% q/q. “Wages growth remains low. This is likely to continue for a while yet, although the improvement in the economy should see some lift in wages growth over time.” RBA Governor Lowe said on August policy review meeting;

UK CPI: We forecast 2.5% for headline CPI y/y vs 2.4%. In July, UK inflation stays at 2.4% from May 2018;

US Retail sales: We expect July Retail sales seen at 0.1% vs 0.5% last month.

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