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Asian Markets Lower On Syria, Aussie Lifted by GDP

Asian Markets Lower On Syria, Aussie Lifted by GDP

Asian markets pared some of this week’s gain and focus turned back to tension in Syria. Despite the delay in the decision to strike Syria, as US President Obama seeks the Congress’ approval, it’s not getting more likely that the vote would be a support for the strike. Key Republican leaders John Boehner and Eric Cantor both stated their support for the action. According to Obama, a “limited” strike was needed to degrade President Bashar al-Assad’s capabilities to use chemical weapons “now and in the future”. Meanwhile, UN Secretary-General Ban Ki-moon reiterated that, “the Security Council has primary responsibility for international peace and security,” and, “the use of force is lawful only when in exercise of self-defense in accordance with article 51 of the United Nations Charter and or when the Security Council approves such action.” He also urged world leaders to, “consider the impact of any punitive measure on efforts to prevent further bloodshed and facilitate the political resolution of the conflict.”The DOW jumped to as high as 14933.35 overnight but faced strong selling below 15000 level, only to push it back to close at 14833.96. U.S.10-year yields also jumped to as high as 2.911% following the better than expected ISM manufacturing report, but then pared much gain to close at 2.848%. In commodity markets, Crude oil once spiked lower to approach 104, but is back above 108 for the moment. Gold also extended rebound, and is back above 1410 level. The currency markets were rather quiet though, with dollar holding firm against euro and Swiss,y while yen is also firm against other major currencies.The Aussie took out a near term resistance at 0.9609 today after data showed GDP rose 0.6% qoq in Q2, slightly fast than Q1’s 0.5% qoq. The data raised optimism that growth might step up in the second half of the year. RBA left rates unchanged yesterday, and issued a more neutral statement which suggested that the central bank would stand pat in the near term. Meanwhile, the BoC rate decision will be a major focus today, and the central bank is expected to hold rates unchanged at 1.00%. The USD/CAD has been stuck in range for two weeks already, and is possibly waiting for this week’s BoC decision, as well as the US NFP for a trigger for breakout.The AUD/CAD took out a near term resistance at 0.9534 this week to resume the rebound from 0.9169. More upside is expected in short term, as the rally from 0.9169 medium term bottom should target 38.2% retracement of 1.0716 to 0.9169 at 0.9760 next. The rally could accelerate today if BoC statement triggers some broad based selling in CAD.

AUD/CAD” width=”600″ height=”600″ />Elsewhere, the UK PMI services will be a main focus today and is expected to drop slightly to 59.8 in August. Economic data released from the UK this week, so far, has been solid and pressured EUR/GBP much. Selloff will continue if we’re getting a solid PMI data from the UK again today. the eurozone will also release PMI services revision, Q2 GDP, and retail sales. The US will release Challenger job cuts, trade balance. Canada will also release trade balance.

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