Dollar remains the weakest major currency this week. In US, Fed's Beige Book economic report maintained an overall modestly positive tone on the economy. Six Fed districts noted that while labor market conditions were tight, "wage pressures remained fairly modest". Consumer spending was "little changed". Meanwhile, manufacturing activity was "flat to slightly up". Non-financial services activity accelerated over the time period. Credit quality remains "favorable" in most districts with moderate growth in loan demands. Markets continues to pare back expectation on Fed hike with fed fund futures pricing in 15% of September hike and 50.7% chance of December hike.
Bank of Canada left key interest rate unchanged at 0.50% as widely expected. The accompany statement noted that "while the strength in exports during July was encouraging, the ground lost over previous months raises the possibility that the profile for economic activity will be somewhat lower than anticipated." And, "while Canada's economy shrank in the second quarter, the bank still projects a substantial rebound in the second half of the year."
ECB meeting is the main focus today and the central bank is expected to keep policies unchanged. The main refinancing rate will be held at 0.00% and deposit rate at -0.40%. The bond buying program, which hit the EUR 1T mark in the week ended September 2, is also expected to remain unchanged. There are talks that it will be a close call on whether ECB would announce new stimulus. However, sentiments have basically stabilized much after the Brexit referendum. And, president Mario Draghi remained rather quiet recently. ECB is much more likely to stand pat today.
Elsewhere, UK RICS House price balance rose to 12 in August. Japan Q2 GDP was finalized at 0.2% qoq, with GDP deflator at 0.7% yoy. Current account surplus narrowed to JPY 1.45T in July. Australia trade deficit narrowed to AUD -2.41b in July. Canada will release housing data today. US will feature jobless claims.