Yen is mildly lower against other major currencies as Asian equities recovered from a three week low. This week's selloff as triggered by another rout in China seems to have temporarily stabilized. The MSCI Asia Pacific, outside Japan, index dropped as much as -0.8% earlier today. Nikkei is also nearly flat at the time of writing after dropping to as low as 20070.62 earlier today. US equities were also broadly lower with DJIA closed down -127.94 pts, or -0.73% at 17440.59, below 55 weeks EMA. The index is now at a juncture and deeper selloff will confirm medium term reversal. In other markets, gold is still struggling slightly below 1100 handle. Crude oil's decline continued and breached 47 level. Back to the currency markets, dollar remains the weakest major currency as markets await FOMC statement.
As for today, UK Q2 GDP will be a major focus. The economy is expected to show 0.7% qoq growth in Q2, up from prior quarter's 0.4% qoq. Sterling was lifted earlier this month but hawkish comments from BoE governor Mark Carney but momentum faded quickly. Nonetheless, some analysts noted that the overall hawkish tone from BoE is a lot "louder" than Fed. Some noted recent BoE minutes showed that at least three MPC members were close to voting for a rate hike this month. And the coming meeting might start to show some putting that into action. Currently, markets are expecting BoE to hike rate mid next year while Fed is expected to hike in September. But there is a minority view that BoE could hike in November while Fed would hike in December.
Regarding Eurozone, IMF's deputy director of European department Mahmood Pradhan said that "the important thing is that the ECB intends to stay the course until September 2016" with quantitative easing" and "that will be necessary". He also warned that "a chronic lack of demand, impaired corporate and bank balance sheets, and weak productivity continue to hold back employment and investment." The overall message was that Eurozone's prospects were modest and more money printing may be needed.
Later in the day, Canada will release IPPI and RMPI. US will release S&P Case Shiller house price and consumer confidence.