From Marc Chandler at Bannockburn Forex:
Overview: The new month begins with risk appetites bolstered by stronger than expected PMI reports helping lift equity markets after the pause in the US yesterday. The MSCI Asia Pacific Index extended its advance for a fourth session, led by 1%+ gains in Japan, China's CSI 300, and Singapore. Europe's Dow Jones Stoxx 600 is at a new two-week high, and US futures indices are firm. Benchmark yields have risen. The US 10-year is at 1.31%, while European core yields have edged up to one-month highs, while peripheral yields are a little softer. The Antipodean benchmark yields jumped 8-9 bp, and appear to be pushing their currencies higher, which along with the Canadian dollar, leads most of the major currencies higher. The Japanese yen and Swiss franc are softer, as one would expect. Emerging market currencies are mixed, but the liquid accessible ones are firmer, and this is enough to lift the JP Morgan EM currency index for its fourth consecutive session and eight of the past nine. OPEC+ has increased its projection oil demand next year, paving the ground for the announcement expected shortly to proceed with plans to boost output by 400k barrels in October. Around $68.80, October WTI is little changed since the end of last week. Rising rates sap a source of demand for gold, which is trading softer but within yesterday's roughly $1802-$1820 range. China's iron ore prices fell for the second session, snapping a six-day rally. It is off 8.5% in the past two sessions. Copper is also about 1.5% heavier today.
Asia Pacific
For at least a couple of months, there has been speculation that shortly after the Paralympic Games end on September 5, Japan's Prime Minister Suga would call a snap election. The aim would not be so much to keep the opposition parties off balance but to keep his rivals within the Liberal Democratic Party, who are counting on a leadership challenge at the end of September. Still, after setting a date for the leadership challenge, calling a snap election ahead of it does not seem cricket. At the same time, the defeat of Suga's candidate for mayor in Yokohama (August 22) may have also injected an extra note of caution among the political strategists. Today, a Japanese news report suggested Suga may dissolve the Diet on September 17 and hold the election a month later. Ostensibly this would delay the leadership challenge until after the election.
China's Caixin manufacturing PMI was weaker than expected, falling below the 50 boom/bust level to 49.2 to match the lowest level since last April. Recall the "official" measure eased to 50.1 from 50.4. Japan's manufacturing PMI was revised to 52.7 from the preliminary 52.4, following July's 53.0. Australia's manufacturing PMI was also revised higher to 53.0 from 51.7. It stood at 56.9 in July. Separately, Australia reported a stronger than expected Q2 GDP of 0.7%. The market had looked for 0.4%, while Q1 growth was revised to 1.9% from 1.8%. Lastly, although South Korean exports soared 34.9% year-over-year in August from 29.6% in July, the August PMI slipped to 51.2 from 53.0, matching its lowest reading since last September.....
....MUCH MORE
