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FX/RATES DAYBOOK EUROPE: Dollar Gains Ahead of PCE; Eurozone CPI

(Bloomberg) — Dollar gains versus peers ahead of U.S. PCE and jobless claims data. Kiwi leads fall versus greenback, weakening initially on domestic data before getting sold further on AUD/NZD cross following better-than-expected Australia private capex data. TODAY
Eurozone CPI, unemployment rate
Germany retail sales, unemployment rate
France CPI, PPI
Italy CPI, unemployment rate
OVERNIGHT TRADING SESSIONS
U.S. WEDNESDAY
Bloomberg dollar index climbed 0.4% Wednesday to rise for a second day, the longest streak in two weeks; the euro fell through 1.1900; UST 10Y yields traded within 2.43bps to end at 2.143%
ASIA THURSDAY
Bloomberg dollar index edges higher as kiwi and yen weaken versus greenback
USD/JPY touches two-week high
NZD/USD falls below 100-DMA while AUD/NZD reaches highest level since April 2016
U.S. 10-yr yields rise 2bps as they continue to recover from decline earlier this week
EUROPEAN BONDS WEDNESDAY
German 10y yields were higher by ~2bps heading into the close, as swap spreads tightened and stocks rose, showing some calm after recent risk-off moves. Finland syndicated supply and strong U.S. data weighed.
TOP OVERNIGHT NEWS
Trump Says Talk With North Korea Done as Mattis Urges Diplomacy
Administration mixes threats with offers of negotiations
Harvey’s Winds and Rain Shut Down U.S. LPG Exports to Asia
More than 90% of U.S. shipments to Asia leave from Gulf Coast
China Factory Gauge Shows Robust Economy as Price Outlook Surges
China’s manufacturing PMI rebounded, suggesting the economy may remain robust enough to offer policy makers more room to continue curbing financial risks
Devil in the Detail: Why Brexit Talks Are Making Little Progress
EU’s Barnier says he’s in the dark about some U.K. positions
May Says She’ll Stand for Re- Election. Tories Laugh in Response
Lame duck premier’s aim was to end rumors about her future
BofA CEO Says He’s Confident Clients Will Pay for Research
Tax reform needed in ‘fight’ to boost U.S. growth to 3% a year
BOJ Seen Buying Fewer Bonds for a Second Month as Yields Slide
BOJ will probably maintain its monthly bond purchase ranges in September, while looking for opportunities to cut actual buying
KEY VIEWS
New Zealand Confidence Gauges Underpin Healthy GDP Growth: ANZ
Activity, profit and investment expectations were consistent with GDP growth ~4% but that is unrealistic
RBA Says High Household Debt Limits Impact of Monetary Policy
Movements in asset values and leverage may be more important for economic developments than in the past given the already high levels of debt on household balance sheets, RBA says in commentary of its 2017-18 corporate plan
RELEASED OVERNIGHT
New Zealand ANZ Aug. activity outlook 38.2 vs 40.3 in July
New Zealand ANZ Aug. business confidence 18.3 vs 19.4 in July
Australia 2Q private capex +0.8% vs est. +0.2%
Japan July industrial production -0.8% m/m vs est. -0.3%
Japan July industrial production +4.7% y/y vs est. 5.2% y/y
China Aug. manufacturing PMI 51.7 vs 51.3
ECONOMIC DATA (All times CET):
8:45am: (FR) Aug. CPI EU Harmonized YoY, est. 1.0%, prior 0.8%
8:45am: (FR) Aug. CPI YoY, est. 0.9%, prior 0.7%
9am: (DE) 2Q P GDP SA YoY, prior 2.6%
9am: (DE) 2Q P GDP SA QoQ, est. 0.5%, prior 0.6%
9am: (SP) July Retail Sales YoY, est. 2.2%, prior 2.8%
9:55am: (GE) Aug. Unemployment Change (000’s), est. -6,000, prior -9,000
9:55am: (GE) Aug. Unemployment Claims Rate SA, est. 5.7%, prior 5.7%
10am: (NO) Sept. Norges Bank Daily FX Purchases, est. -850m, prior -850m
11am: (GR) June Retail Sales YoY, prior 0.4%
11am: (EC) July Unemployment Rate, est. 9.1%, prior 9.1%
11am: (IT) Aug. CPI NIC incl. tobacco YoY, est. 1.1%, prior 1.1%
11am: (IT) Aug. CPI EU Harmonized MoM, est. 0.0%, prior -1.9%
11am: (IT) Aug. CPI EU Harmonized YoY, est. 1.3%, prior 1.2%
11am: (EC) Aug. CPI Estimate YoY, est. 1.4%, prior 1.3%
12pm: (PO) 2Q F GDP QoQ, est. 0.2%, prior 0.2%
3pm: (BE) 2Q F GDP SA QoQ, prior 0.4%
3pm: (BE) 2Q F GDP SA YoY, prior 1.4%
GOVERNMENT (All times CET):
Aug. 30-Aug. 31: (FI) Finnish Government Drafts Country’s 2018 Budget
12pm: (SW) Swedish Debt Office Head Gives Speech
2:20pm: (AS) Bundesbank’s Dombret and Austria’s Schelling in Alpbach
CENTRAL BANKS (All times CET):
9:25am: (UK) BOE’s Michael Saunders speaks in Cardiff, Wales
10:10am: (SW) Riksbank Bond Purchase Results
2:20pm: (AS) Bundesbank’s Dombret and Austria’s Schelling in Alpbach
BOND SALES/PURCHASES (All times CET):
For corporate bonds, see New Issue Monitor
11am: Sweden to Sell SK375.0m 0.125% I/L 2026 Bonds
11:03am: Sweden to Sell SK375.0m 1% I/L 2025 Bonds
MARKETS
USD/JPY +0.3% to 110.54 (range 110.19-110.61)
EUR/USD -0.1% to 1.1876 (range 1.1872-1.1897)
AUD/USD steady at 0.7906 (range 0.7887-0.7923)
NZD/USD -0.4% to 0.7173 (range 0.7164-0.7210)
GBP/USD -0.1% to 1.2912 (range 1.2906-1.2928)
USD/CHF +0.1% to 0.9642 (range 0.9623-0.9646)
USD/CAD +0.2% to 1.2642 (range 1.2619-1.2652)
TECHNICAL OUTLOOK by Bloomberg strategist David Finnerty
USD/JPY – Trying to consolidate
Resistance: 111.05, Aug. 4 high; 112.20, July 26 high; 113.58, July 14 high
Support: 108.27, Aug. 29 low; 108.13, April 17 low; 107.49, July 21, 2016 high
EUR/USD – Short-term high maybe in place
Resistance: 1.2070, Aug. 29 high; 1.2167, 50% retracement of May 2014 to Jan. 2017 decline; 1.2288, June 1, 2012 low
Support: 1.1847, Aug. 11 high; 1.1774, Aug. 25 low; 1.1689, Aug. 9 low
EUR/JPY – Trying to push higher
Resistance: 131.71, Aug. 30 high; 132.32, Jan. 29, 2016 high; 134.50, Dec. 3, 2015 high
Support: 129.66, Aug. 29 low; 129.24, 50-DMA; 127.56, Aug. 18 low
To contact the reporter on this story: David Finnerty in Singapore at dfinnerty4@bloomberg.net To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net Patricia Lui

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