Nylon Handover: Geopolitical tensions and oil rout dictate sentiment
Global growth concerns and geopolitical tensions saw risk assets such as stocks, AUD and NZD sell off for a 3rd consecutive day and safe havens such as Gold and JPY strengthen again for a carbon copy session for 2016.
- AUDUSD and GBPUSD are on the brink of breaking key support, with Aussie barely above 70c and Cable on cusp of breaking multi-year lows.
- A mixed data set from the US overnight from two separate reads of the services sector whilst and employment at its highest in 8 months, but JPY continued to strengthen from safe haven flows.
- The ISM services PMI missed expectations but still expanding at 55.3 vs 56 expected. Markit also released their reading which saw it expand at 54, up from 53.7 previously.
- ADP employment is its highest since July 14 which puts a positive expectation for tomorrow's NFP data set.
- Eurozone posted stronger PMI data for both services and manufacturing to send the Euro higher against AUD, NZD, USD and GBP crosses.
- The US has denied North Korea's claim of a hydrogen bomb test yesterday, stating it was "not consistent" with a hydrogen bomb.
- WTI shed a further 7% yesterday and is now threatening the multi-year lows whilst Brent traded below $35 per barrel for the first time since 2004.
- Gold regained its safe haven status to test $1095, a 35 session high and strongly suggest a structural swing low has been seen at $1046.
- The Renminbi gap has widened to a record gap, strongly suggesting the PBoC are prepared to let the Yuan weaken faster than previously expected against the USD and a basket of currencies.