Dollar weakens broadly in relatively quiet market overnight. The post NFP rally in the greenback quickly faded as traders are not convinced of another rate hike by Fed this year yet. Fed fund futures are pricing in only 42.7% chance of a hike by December, staying below 50% level. Dollar index is back at 95.7 after jumping to 96.52 last week. There is probably little prospect for sustainable buying in dollar before Fed chair Janet Yellen's speech in Jackson Hole symposium on August 25-27. In other markets, Gold rebounds back to 1354 after dipping to 1335.3 earlier this week. WTI crude oil hovers between 42.5/43.5 tight range. Asian equities are mixed with Nikkei down -0.35% at the time of writing.
Released from Japan, core machinery orders rose 8.3% mom in June, much better than expectation of 3.4% mom. The data series is generally volatile but could be seen as a leading indicator of business investment. Since the start of the year, core machinery orders have fallen in three months, by -9.2% in February, -11.0% in April and -1.4% in May. Orders grew 15.0% in January and 5.5% in March. Overall, the data series suggests that investment spending would remain soft for the rest of the year. Also from Japan, domestic CGPI dropped -3.9% yoy in July versus expectation of -4.0% yoy.
Australia home loans rose 1.2% mom in June, below expectation of 2.4% mom. Some economists noted that housing markets in Australia has cooled notably recently. While RBA's rate cut to record low of 1.50% could support demand. Gains would likely be limited by tighter lending requirements. There are expectations that RBA could further cut interest rate to 1.00% within a year as the economy softens further.
Looking ahead, the economic calendar is very light today with focus on tomorrow's RBNZ rate decision where the central bank would cut OCR to 2.00%.