Australia: The AUD appears to be lacking any clear direction currently. Overnight US Durable Goods data was largely positive, which would normally have driven the AUD higher, but offsetting this is investor nervousness ahead of this Friday’s Kansas City Fed’s annual economic conference.

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On Friday we also have Reserve Bank Governor Glenn Stevens appearing before the House of Representatives Standing Committee on Economics. It’s unlikely that Governor Stevens will say anything that will have too much of an effect on interest rate expectations or, as a result, the AUD.

Expect the AUD to trade in a relatively tight range today with no local data of any real significance due for release.

Majors: US durable goods orders in July rose by 4%, much better than the 2.4% increase markets had been expecting. The USD received a slight boost from the data, but as discussed above, investors are holding off on taking big positions ahead of Friday’s speech from Bernanke.

Opinions are mixed as to what message Bernanke will convey in his speech, with some market watchers expecting him to announce another round of quantitative easing while others expect that he may only outline what the US Federal Reserve’s potential policy options are for addressing the struggling American economy.

In Europe overnight, Greek government two year yields rose to a euro-era record of 44%. Clearly the sovereign debt crisis in Europe is still a long way from being contained, with rumours the ECB was busy buying Italian and Spanish government
bonds.

Economic Calendar
AU CBA HIA House Affordability Q2
US Initial Jobless Claims Aug
JN Foreign & Japan Buying Bonds AUG
UK Nationwide Consumer Confidence JUL