Euro Squeeze Continues, RBA Gov to Speak
The near-daily rumours that Spain was poised to ask for EFSF aid can be put to rest for a few weeks after a report that no decision will be made until at least Sept 12. The euro was the top performer on the day while the Australian dollar lagged. Comments from RBA Gov Stevens are the highlight of the session. Thursday's Premium Intermarket Insights include EURUSD, AUDUSD, silver and oil.
The euro squeeze continued higher on Thursday, hitting 1.2590. Reuters cited a source saying discussions are ongoing at the technical level but no decision will be taken before Sept. 12, ahead of EU FinMin meetings on Sept 14/15.
The takeaway was that an aid plan is moving along slowly but coming together. It adds another element to a jam-packed schedule in the first two weeks of September.
The market was reluctant to give back the QE3-induced moves on Wednesday, even after St. Louis Fed President Bullard said markets are overpricing the chance of QE3 in September.
US initial jobless claims were slightly disappointing, rising to 372K from 365K expected. The S&P 500 fell 0.8%.
The calendar in Asia is busier than usual for a Friday. NZ trade balance will be released early in the session but the highlight will be comments from Stevens, who is testifying before the House economics committee.
Australias resource minister declared the mining boom over yesterday in reaction to BHP cancelling a A$20B project. Comments from Stevens on the sustainability of investment will be closely followed. He begins speaking at 2330 GMT.
At 2350 GMT, the Japanese corporate service price index is expected to fall 0.2%. At 0135 GMT, the China flash business sentiment indicator will be released.
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