From Marc Chandler at Bannockburn Global Forex:
Overview: With many central bank meetings in the days ahead, the dollar has begun the new week on a quietly and mostly in tight ranges, helped by a holiday in Tokyo. G10 currencies, outside of the Scandis are slightly firmer in European turnover. Emerging market currencies are narrowly mixed, but of note the 0.25% decline makes the Chinese yuan the weakest. The Mexican peso is extending its recovery into the seventh consecutive session.
While mainland Chinese stocks recovered from early weakness, the large bourses in the region fell. Europe's Stoxx 600 is off a little more than 0.5%, snapping a two-day advance, while US index futures are trading with a firmer bias after the pre-weekend tumble. The UAW strike at continues. Benchmark 10-year yields are mostly 1-2 bp higher in Europe, though Gilt yields are up a little more. The US 10-year yield has edged up to about 4.35%, while the two-year yield is near 5.05%. Last week's high was slightly above 5.07%. November WTI is extended last week's gains to approach $91 a barrel. Since the end of June, it has only declined in two weeks (rising in nine, including the past three). In the last two sessions, gold recovered from almost $1901 to $1930.50. It is consolidating today (~$1922.65-$1930.65).
Asia Pacific
The PBOC cut required reserves by 25 bp last week (freeing up ~CNY500 bln or almost $70 bln) on top of injected more funds (CNY591 bln CNY401 bln in August) through the one-year Medium-Term Lending Facility. This followed on the heels of the surge in aggregate lending last month (CNY3.12 trillion vs. CNY535 bln in July). Some of the high-frequency August data such as retail sales, industrial production was stronger than expected and showed improvement sequentially on a year-over-year basis. The surveyed joblessness also eased slightly. Still, problems in the property market remain evident. House prices fell for the third consecutive month. Investment in property is being reduced at an accelerated pace (-8.8% vs-8.5% year-to-date, year-over-year), Residential property sales fell for the first time this year (-1.5% year-to-date, year-over-year).
This week the focus is on the prime lending rates, but it would be unusual to see them cut without the one-year Medium-Term Lending Facility rate cut....
....MUCH MORE
