Markets are looking more settled in the early part of this week. A US public holiday seems to have come at the right time as the selling pressure of last week through equities appears to have turned a corner again. Treasury yields are looking stable today, whilst a strong European session yesterday is set to continue early today. As the week progresses, trader will become increasingly focused on the European Central Bank monetary policy decision. Euro traders seem to be increasingly on tenterhooks. There are a few mixed factors coming out of the Asian session. Japanese Q2 GDP was revised lower but came in better than expected, whereas President Trump has suggested the potential to decouple the US economy from China. Furthermore, there is an ongoing concern that the path of EU/UK post-Brexit trade deal talks is heading towards a dead-end. Quite how the EU would react anything other than negatively were UK Prime Minister Johnson to suggest a rewrite of the Withdrawal Agreement, remains to be seen. More talks are scheduled for today. The growing relative weakness of sterling reflects the growing concern of the market.
Wall Street was closed for Labor Day yesterday, but futures are ticking positively early today to suggest that the recent selling pressure has been relieved. E-mini S&Ps are +0.6% early today. In Asia, there has been a mildly positive session, with Nikkei +0.6% and Shanghai Composite +0.8%. European futures are also gaining, with FTSE futures +0.3% and DAX futures +0.4%. In forex, there is a mixed outlook, with GBP still under pressure, whilst AUD is performing well and USD is fairly mixed. In commodities, a mixed dollar outlook has allowed gold and silver to tick slightly higher, whilst oil remains under pressure amidst questions surrounding strength of demand and recent price cuts from Saudi Arabia.
It is a another quiet day on the economic calendar today, with no US data of note in the afternoon. So the focus is just on the “revised” Eurozone Q2 GDP at 1000BST. This is the third and final reading of growth numbers, and is expected to be