Tomorrow’s PMI figures for Europe will be closely monitored for signs of a continuation of the bounce in EU data. Consensus expectations are for a marginal increase of less than 0.5 pts for most series. There may be a bit more room for positive surprises, as expectations continues to be depressed.
Separately, the BoJ was a dud. USDJPY is likely to continue to depreciate against the MoF ‘vocal intervention’ levels of ~78. Model outputs suggests ‘fair value’ is about 5 figures lower, but it’s hard to see that happening given intervention threats. As a result, option sales look interesting.
- BoJ increased its purchase program from 70trn to 80trn yen, half via TBills and half via JGBs. It will also now buy bonds with a yield less than 0.1%.
- US Existing Home sales jumped to 4.82mm in Aug vs 4.56mm exp and 4.47mm prev.
- Thu: China HSBC PMI, EU PMI, US Jobless Claims, Philly Fed
- Fri: Canada CPI, Quadruple Witching
- Mon: German IFO, Dallas Fed