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China Rout Accelerates, Bleeding Into European Trade

FOREX
  • Weakness in Chinese/HK assets has persisted, with USD/CNH this morning rallying to touch levels not seen since mid-April while local equities suffer sharply. The Hang Seng Index closed lower by 4.4%, adding to yesterday's acute sell-off.
  • This has prompted a broad risk-off theme across G10 currencies, with JPY and USD outperforming at the expense of AUD, NZD and NOK.
  • Weakness in AUD/USD puts the pair just above the week's lowest levels at 0.7331 which provides first support ahead of the more major 0.7290 level. The formation of a death cross (50-dma < 200-dma) may continue to exert pressure on the pair.
  • Prelim durable goods orders and July consumer confidence data make up the US data slate on Tuesday, but markets will also be watching for any comments from RBA's Debelle and ECB's de Cos. Corporate earnings releases worth watching include 3M, Apple, General Electric , Alphabet, Microsoft and Visa.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com

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