EM comes back into the spotlight; USDCAD gains after data

Summary:

Contagion risks rise as Turkish Lira comes back under pressure
CAD gains as US inflation rises and Canadian GDP misses
NZD falls back on deteriorated business sentiment
OECD wants to assess the blockchain potential
Commodity wrap focusing on Oil, Corn, Cocoa and Gold

It wasn’t that long ago that fears surrounding a full-blown emerging market crisis gripped traders thoughts, and given the inadequate measures chosen in response by Turkey it is of little surprise that these have reemerged once more. Reports that the deputy governor for the Turkish central bank is set to resign have spooked markets once more with the Lira slumping and EURTRY coming back within a whisker of its all-time high. Despite this other markets are seemingly holding up fairly well with the DE30 little changed on the day. Will stocks suddenly wake up to the fears of contagion or will the crisis be contained to the Emerging Markets space?

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This afternoon main economic releases saw a batch of data from North America released simultaneously with the latest US inflation figures meeting forecasts and the most recent Canadian growth figures disappointing. Taken together this has provided for a pop higher in the USDCAD pair, with the cross rising to retest its prior breakout level around 1.2985 from below. Let’s now look more closely at the data, starting of with the US releases.

Besides EM currencies the New Zealand dollar is by far the worst performing major currency this morning after business sentiment deteriorated to the lowest since the GFC extending its losing streak. The ANZ gauge dropped in August to -50.3 from -44.9% reaching its weakest point since 2008 and exerting substantial downward pressure on the kiwi dollar. Note that RBNZ Governor Adrian Orr said in Jackson Hole last week that weak business sentiment was starting to influence investment decisions and leading to lower output. On top of that, Prime Minister Jacinda Ardern has lately come under pressured from the grim mood of the business sector as it threatens the NZ economy.

There’s been some pretty large selling seen in the crypto space today with all 5 markets dropping lower. Bitcoin is faring better than the alt-coins but it is still lower by almost 3% on the day and has dropped back to 6800. The Organization of Economic Co-operation and Development (OECD) plans to organize the conference, called the OECD Blockchain Policy Forum, focusing on the blockchain technology’s potential and other ideas related to this technology, the organization announced on Wednesday. The blockchain conference will take place in Paris (at the OECD’s HQ) on September 4-5, and it will be participated by Angel Gurria (the Secretary-General of the OECD) and some countries’ Prime Ministers. What’s interesting, the OECD’s conference will be broadcast live.

In this week’s commodity wrap we present you 4 markets that look interesting or/and have posted some major price moves: oil, corn, cocoa and gold

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EM comes back into the spotlight; USDCAD gains after data

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