AUD Weakens On RBA, Ahead of Canada Jobs

RBA statement; Chinese trade data; Catalonia asked for help; UK PPI; Japanese sales tax to double; German CPI confirmed. Market turns to Canadian labor market data, US import prices and budget deficit. Premium subscribers can see the rationale for CADJPY ahead of the Canada jobs report. 1 of 2 EURUSD hit all targets. See more below.

The Aussie weakened during the Asian session after the RBA monetary policy statement suggested that strong AUD could have a more negative impact on growth than in the past. Weak Chinese trade data that was well below expectations (July surplus dropped to USD 25.1 bln from 31.7 bln) then pushed AUDUSD even lower to a session low right below the 1.05 handle. The pair now trades around 1.0520 amid rumors of a Chinese RRR cut that already started to circulate.

Spanish 10 year yield pushed higher to 6.92% on reports that Catalonia has asked the government to speed up the disbursement of financial aid designed to help regions with bond redemptions as it is quickly running out of cash. MNI also reports that up to 8 Spanish regions may ask the government for a bailout.

UK PPI input declined 2.4% y/y in July after falling 3.0% in June. Output prices eased to 1.7% from 2.0% and PPI core output slowed to 1.3% from 1.7%. Annual output and core output figures show the smallest rise since the end of 2009. GBPUSD fell to 1.5577 but recovered to 1.5600 while EURGBP continues to consolidate above 0.7860.

In other news, Japanese parliament enacted doubling of the sales tax from 5% to 10% by 2015 and German CPI for July was confirmed at 0.4% m/m and 1.7% y/y which was in line with initial estimates.

The US session starts at 8:30 am ET with Canadian employment that is expected to rise to 9.6K in July from previous 7.3K while the unemployment rate is seen unchanged at 7.2%.

US reports are limited to import prices due at 8:30 am that are anticipated to rise 0.2% in July after dropping 2.7% a month earlier and later in the session at 2:00 pm to budget deficit that is expected to narrow to USD 103 bln from previous 129.4 bln.

1 of 2 CADJPY trades hit all targets. Same for dual EURUSD trades as the short hit all targets. Premium subscribers can see the rationale for CADJPY ahead of the Canada jobs report. 1 of 2 EURUSD hit all targets See more below. Direct access here: http://ashraflaidi.com/products/sub01/access/?a=673 To subscribe, pls click here: http://ashraflaidi.com/products/sub01/