Daily Observations:

The yen climbed with gold and government bonds and most Asian equities were in the red as investors adopted a cautious stance before the BOJ’s much-anticipated policy review. Crude oil prices continue to fall while palladium and platinum hit 2016 highs.


  • The S&P 500 Index edged 0.2% higher to close within striking distance of an all-time high amid mixed responses from earnings. Ford Motor and Food Markets Inc. slid on poorer-than-expected results while Facebook, Alphabet and Amazon rallied.
  • Apple sold $7 billion in bonds in its third undertaking this year to finance share buybacks.
  • The US dollar extended its weakness into Asia trading hours this morning with the Bloomberg Spot Dollar Index sliding 0.4% to test previous day’s lows.
  • The default rate for leveraged loans in the energy sector could spike close to 18% if Templar Energy and Stallion Oilfield Services are unable to make interest payments on their debts, Fitch Ratings warned.


  • German inflation in July rose by 0.3% month-on-month and 0.4% year-on-year, a touch stronger than the estimates of 0.2% and 0.3% respectively.
  • The European Banking Authority will announce the results of its stress tests tonight, which is expected to shed light on non-performing loans by Italian lenders.
  • The spread between 10-year yields between Italy and German bonds held at the biggest level in 2 years, highlighting concerns by investors over tonight’s results.


  • The BOJ is expected to deliver stimulus sometime today, with more ETF purchases the top bet among analysts.
  • Core CPI last month fell 0.5% from a year earlier, more than the 0.4% drop expected. Headline CPI declined 0.4% year-on-year, matching expectations.
  • June’s jobless rate dropped to 3.1% from 3.2% in May. Retail trade slid 1.4% from a year earlier and rose 0.2% from the previous month, worse than the median estimates of -1.2% and 0.3% respectively.
  • Industrial production last month rose 1.9% month-on-month but fell 1.9% from a year earlier, estimates were a 0.5% rise and a 2.9% drop, respectively.


  • Xinhua News reported that the China Banking Regulatory Commission is drafting rules in a bid to govern China’s market for wealth management products to prevent risks in the sector.


  • 2Q PPI rose 0.1% quarter-on-quarter and 1.0% year-on-year; prior figures were -0.2% and 1.2% respectively.
  • 24 out of 25 economists surveyed by Bloomberg expect the RBA to cut rates to 1.5% from 1.75% when they meet next Tuesday.

Precious Metals:

  • Spot gold continues to hold steady around the $1,340/Oz handle, following its 1.5% jump the previous day.
  • Silver mirrored gold’s movements, and is holding above the $20/Oz level.
  • Platinum and palladium are both at 2016 highs, with the latter adding 11% in July and the former soaring 17%.


  • WTI oil futures expiring in September closed lower for the sixth day as it ended 1.9% weaker at $41.14/bbl.
  • Oil is nearing a 20% drop from levels reached in early June, a move that would characterize a bear market.



  • Spot 1.3514
  • USDSGD is holding steady at the 1.3500 handle, following yesterday’s 0.6% slide.
  • The previous day’s strong rejection of the 1.3600 handle could indicate more downside for the currency pair, with the 1.3400 support level a possible target over the short term.



  • Spot 0.7527
  • AUDUSD has been holding up well against the 0.7400 support handle, rebounding from it twice this month so far. The currency pair was slightly higher this morning by 0.1%, recovering well from last night’s declines.



  • Spot 1.3146
  • USDCAD was 0.2% weaker at 1.3133 earlier today and looks set to decline for the third day in a row.
  • The Canadian dollar has been somewhat resilient as of late despite the continued weakening of crude oil prices.



  • Spot 6.6607
  • The PBOC strengthened its reference rate for a fourth day, by 0.13% to 6.65911 versus the US dollar.
  • USDCNH slid 0.1% to 6.6567 as the currency pair looks set for its second weekly decline in a row.
  • The 6.6500 level should offer some short-term support.



  • Spot 1.3194
  • Sterling rose 0.5% against the greenback, back to the 1.3200 handle and paring some of last night’s declines.
  • A head-and-shoulders pattern is beginning to take shape; a strong close above 1.3500 signals a strong reversal and will be a sign most GBP bulls will be keeping a lookout for.
© Jachin Capital Pte Ltd

UEN: 201419754M

The contents of this document are for information only and is taken or compiled from sources that we, Jachin Capital Pte Ltd, believe to be reliable. To the maximum extent permitted by law, we do not make any representation or warranty (express or implied) that this information is accurate, timely or complete and it should not be relied upon as such. Opinions expressed are our current opinions as at the date of this document only and are subject to change without notice. We endeavour to update on a reasonable basis the information discussed but regulatory, compliance or other reasons may prevent us from doing so. The publication and distribution of this document is not and does not imply any form of endorsement of any person, entity, service or product described or appearing here. This is not and does not constitute or form an offer to buy or sell nor the solicitation of an offer to buy or sell any security or financial instrument nor to participate in any particular trading or investment strategy. We are not soliciting any action based on this document. The information, services and products described or appearing here are intended only for Accredited Investors (as currently defined in the Securities and Futures Act) and are not intended for nor targeted at the public in any specific jurisdiction. This information does not take into account the particular investment objectives, financial situations or needs of individual investors. Investors should seek independent financial, tax or legal advice or make independent investigations as considered necessary or appropriate before making an investment decision. Investments involve risk. Any past performance, projection, forecast or simulation of results is not necessarily indicative of the future or likely performance of any investment instrument.

Essential SSL