The biggest news by far was BoJ’s additional easing. This was one of the bet going into September and why Nikkei was added long positions. Nikkei (CME futures) popped 3% today versus +2% for Eurostoxx and +1.5% for Dow. Remains to see whether Nikkei can outperform for the month. Is stimulus juice baked in? Yen actually got stronger today. Stocks and commodities gained.
A welcome relief in ag complex with a big gain for corn.
Another notable winner was gold which rose nearly 2% with futures touching $1340. Gold miner ETF rose 3%.
The bond market was pretty quiet with minimal moves in bunds and treasuries.
The big loser was – who else – the US dollar which is a great news for US. In the currency war the dollar (and yuan) has been the undisputed winner. AUD underperformed on RBA pause on rate hike.
On economic data front – both UK and US services PMI (ISM for US) came in better than expected. Both surveys are consistent with a very weak expansion. Nothing to cheer about but does not seem like dip into recession. Eurozone retail sales dipped slightly in August – tells me domestic consumption remains anemic there as well so strong Euro will hurt.
Fairly quiet tomorrow with exception of Australia employment which would impact AUD (but we have no exposure). Thursday again is weekly initial jobless claims.
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