Morning wrap (01.09.2023)

• US indices finished yesterday's trading mostly lower. S&P 500 dropped 0.16%, Dow Jones moved 0.48% lower and Nasdaq gained 0.11%. Small-cap Russell 2000 finished almost 0.4% lower
• Indices from Asia-Pacific traded mostly higher today. Nikkei gained 0.5%, Kospi moved 0.4% higher, Nifty 50 gained almost 0.50% while S&P/ASX 200 traded 0.3% lower. Indices from China gained 0.2-0.7%
• Trading session in Hong Kong was canceled amid approaching supertyphoon. As a results trading on CHNComp, HKcomp, HK.cash and CNH.cash was suspended
• European index futures point to a more or less flat opening for blue chips indices from the Old Continent
• The People's Bank of China cut the FX reserve requirement ratio for banks to 4% from 6%. Cut will become effective on September 15, 2023
• RRR cut will free up some of the FX reserves held by banks, which can be later used to support yuan
• It is rumored that Saudi Arabia and Russia may announce extension to their supply and exports cuts through October as soon as next week
• Chinese manufacturing PMI (Caixin/S&P Global) unexpectedly returned to expansion territory in August, jumping from 49.2 to 51.0 (exp. 49.3)
• Indian manufacturing PMI index moved from 57.7 to 58.6 in August (exp. 57.6)
• JP Morgan revised its US GDP forecast higher and now expects annualized Q3 GDP growth to reach 3.5%, up from previous forecast of 2.5%
• Goldman Sachs estimates risk of US recession over the next 12 months at 20%
• Major cryptocurrencies are trading little changed - Bitcoin and Ripple trade flat while Ethereum gains 0.1%
• Energy commodities are trading mixed - oil gains 0.2% while US natural gas prices drop 0.2%
• Precious metals trade mixed - gold trades flat, silver gains 0.4%, platinum drops 0.1% and palladium declines 0.3%
• EUR and CAD are the best performing major currencies while AUD and NZD lag the most

USDCNH slumped following PBoC's announcement of FX RRR cuts. However, yuan has given back almost all of the gains later on and the pair is now attempting to climb back above the lower limit of a previously broken trading range. Source: xStation5