AUDUSD Range Vulnerable to Dovish RBA Forward Guidance

AUDUSD may face a more bearish fate over the coming days if the Reserve Bank of Australia (RBA) prepares Australian household and businesses for lower interest rates.
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Japan's Capital Spending Rises; Manufacturing Sector Contracts

Japanese firms' capital investment increased in the second quarter despite the Sino-U.S. trade war but companies reported a notable fall in profits compared to last year.

The manufacturing sector logged one of the strongest contraction seen over the past three years in August as output and orders continued to decline, while employment was the only positive indicator, according to survey data from IHS Markit released Monday.

The Ministry of Finance said that overall investment in plant and machinery by companies grew 1.9 percent in the second quarter, faster than the forecast of 1.7 percent.

Investment in plant and machinery by manufacturing companies declined 6.9 percent, while that of non-manufacturing firms gained 7 percent.

At the same time, company profits plunged 12 percent in the second quarter, in contrast to an increase of 10.3 percent in the previous quarter.

The Jibun Bank Japan Manufacturing Purchasing Managers' Index was little changed at 49.3 in August. A score below 50 indicates contraction.

Demand remained weak across domestic and overseas markets. Survey respondents mentioned China as a particular source of weakness, with data showing reduced inflows of new export orders.

"With external and domestic headwinds aplenty, it is difficult to envisage any near-term improvements in Japan's manufacturing sector," Joe Hayes, an economist at IHS Markit, said.

Firms' outlook for next twelve months remained subdued in August. The end of Olympic Games-related work, as well as the planned consumption tax hike later this year were expected to adversely impact output volumes.

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source http://www.mt5.com/forex_news/quickview/2142424/

China Manufacturing Sector Recovers In August

China's manufacturing sector expanded in August indicating strongest growth since March, survey data from IHS Markit showed Monday.

The Caixin factory Purchasing Managers' Index rose to 50.4 in August from 49.9 in July. A score above 50 indicates expansion.

Production grew at the fastest pace in five months but total new orders received was broadly stable.

Reflecting reduced raw material prices, the rate of reduction in input costs was the joint-quickest since January 2016.

Lower cost burdens and efforts to stimulate sales led firms to cut their output charges at a quicker pace in August, with the rate of discounting the steepest since December 2015.

The degree of confidence among manufacturers weakened from July, largely due to concerns over the ongoing China-US trade dispute and signs of a slowing global economy.

The material has been provided by InstaForex Company - www.instaforex.com

source http://www.mt5.com/forex_news/quickview/2142423/

Japanese Yen Strength May Continue, But Will the BoJ Intervene?

Japanese Yen strength may fuel speculation that the Bank of Japan could intervene. Amid slowing global growth, a cheaper Yen may do little to support exports while risking trade tensions.
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How to Trade the Impact of Politics on Global Financial Markets

As the global economy continues to contract, the risk of geopolitical threats undermining financial and economic stability are rising, leaving the door open to violent volatility – and trading opportunities.
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Trading Forecast: What Will a Return of Volatility Do to Trade Wars, Recession Fears?

We have closed out the month of August historically one of the most reserved periods of trading for the risk-leaning assets of the calendar year. What we face in September is one of the most heavily traded, volatile and under-performing periods of the year. What will that seasonal shift lead to when we consider the relentless pressure from trade wars, recession fears and monetary policy speculation?
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Trading Forecast: What Will a Return of Volatility Do to Trade Wars, Recession Fears?

We have closed out the month of August historically one of the most reserved periods of trading for the risk-leaning assets of the calendar year. What we face in September is one of the most heavily traded, volatile and under-performing periods of the year. What will that seasonal shift lead to when we consider the relentless pressure from trade wars, recession fears and monetary policy speculation?