Daily Market Outlook, September 6th, 2021

Overnight Headlines

Week Ahead-China trade, CPI lead quiet global data calendar China data will be in focus this week, as a recent run of relatively weak Chinese data has created uncertainty over the global growth outlook. August trade data leads with the focus on import and export breakdowns. CPI and PPI will also be released. It will be a very quiet week for data out of the U.S, with markets closed on Monday for the Labor Day holiday. With U.S. inflation in focus, the PPI release may attract more attention than normal. Other data includes weekly jobless claims and JOLT job openings. It will be a bit busier in Europe. Key euro zone data this week includes German ZEW, industrial orders and output, and trade. EZ Q2 GDP will also be released. UK data includes July GDP, IP and trade. Key data out of Japan includes trade, current account, Q2 GDP and household spending. There is no data of note out of Australia or New Zealand. Canada's calendar includes a central bank decision, Ivey PMI and employment data.

Week Ahead-Central bank meetings in Europe, Australia in focus in the coming weeks, with the ECB and RBA on the radar this week, as efforts to normalise policy have been complicated by the surge in infections due to the highly contagious Delta variant of the coronavirus. The latest Reuters poll shows the European Central Bank is expected to announce a reduction in monthly purchases from its 1.85 trillion euro Pandemic Emergency Purchase Programme this week. Many analysts believe the ECB statement and President Christine Lagarde's press conference will strike a dovish note to avoid an overreaction to the slight tapering. The Reserve Bank of Australia also meets this week. Analysts are certain the RBA won't change the cash rate from 0.10%, but there is a split between those who believe it will delay modest tapering plans and those who think the bank will go ahead. The question is whether the RBA will look past the economic damage from the lockdowns in Sydney and Melbourne and instead focus on plans to reopen the economy once the vaccination rate is high enough. While most of the large Australian banks expect the RBA to pause, 15 of 25 analysts in the latest Reuters poll believe they will not delay.

(Hedging effect can often draw spot toward strikes pre expiry if nearby)

USDJPY - 110.50/60 417m. 109.90/110.00 612m. 109.60/70 542m.
EURUSD - 1.1940/50 1.01bn (604m C). 1.1890/1.1900 486m. 1.1700 512m. 1.1600 747m.
GBPUSD - 1.3900 501m.
AUDUSD - 0.7650 403m.
AUDNZD - 1.0470/80 1.32bn (911m C).
EURGBP - 0.8590 696m.
EURCHF - 1.0850 456m. 1.0720 400m.
USDCNH - 6.55 445m

EURUSD Bias: Bearish below 1.19 Bullish above

GBPUSD Bias: Bearish below 1.39 Bullish above.

USDJPY Bias: Bullish above 109 Bearish below

AUDUSD Bias: Bearish below 0.75 Bullish above