1. August German Ifo beat expectations (107.5) on all components, but not enough to divert market attention from rising Middle East geopolitical tension and Emerging Market Liquidation.
2. The Turkish lira or TRY fell to a new record low outright (2.0360) and against the EUR (2.7150) despite CBRT comments.
3. The Indian Rupee or INR trades north of 67.50, easily breaching the psychological 66.50 levels, and this despite the BoI suspected intervention and “helping little to offset worries about the impact of increasing subsidy costs on the government’s financial health.
4. CHF and JPY have found some support. A stronger yen is putting the “older” long USD/JPY position under pressure. By default, this is supporting the EUR – the 17- member single currency momentum is to continue once price overcomes the €1.34 level with conviction. A strong Ifo should help.
5. US Treasury’s have so far pushed ahead after yesterday’s weaker US durable numbers.
6. US 10’s are trading close to -17pbs lower from their 2-year high post after FOMC minutes last week (+2.75%).
7. Global equities trade lower as concerns over political stability in Italy and the situation in Syria weigh on market sentiment.
8. Not helping investors is the US’s unclear QE position – taking very little to persuade individuals to reduce risk.
9. A possible near term strike on Syria could provide additional support to crude prices.
10. A weaker dollar, suspect US data releases and geopolitical concerns is supporting higher gold prices $1,419.
Dean Popplewell, Director of Currency Analysis and Research @ OANDA MarketPulseFX