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On March 3, leaders of more than a dozen European and EU countries, as well as Ukraine and Canada, held a summit in London, UK, on the 2nd to discuss the Ukrainian crisis and European defense issues. British Prime Minister Starmer announced four steps to support Ukraine after the summit: continue to provide military assistance to Ukraine and exert economic pressure on Russia; to achieve lasting peace, Ukraines sovereignty and security must be ensured, and Ukraine must participate; after reaching a peace agreement, continue to strengthen Ukraines defense capabilities to prevent any possible future security threats; and establish an alliance dedicated to defending the Ukrainian peace agreement and guaranteeing peace. Starmer said that the participating countries agreed that Britain, France and other countries would work with Ukraine to develop a ceasefire plan, and would discuss and promote this plan with the United States.Ukrainian President Zelensky: We are ready to sign a mineral deal, and I believe the United States will be ready as well. I believe our relationship with the United States will continue.On March 3, according to the Ukrainian News Agency, German Chancellor Scholz said in London that Ukraines partners will continue to support the country, and Russias demands for Ukraine to demilitarize and support a pro-Russian leadership are unacceptable. Scholz stressed: "All parties at the meeting confirmed their willingness to support Ukraine." He reiterated that peace talks must follow a basic principle: no decision can be made without Ukraines participation. Scholz stressed that this means that Ukraines sovereignty and independence must be maintained, and only Ukraine itself can decide its own future, not others for it or on its behalf.On March 3, local time on March 2, leaders of many countries held a meeting in London on the Ukrainian crisis and European defense issues. After the meeting, British Prime Minister Starmer held a press conference and announced that Ukraine would be allowed to use 1.6 billion pounds of export financing to purchase 5,000 air defense missiles. Starmer also said that the United States is not an "unreliable ally."Ukrainian President Zelensky: European solidarity has reached an extremely high level, which has not been seen for a long time. We are committed to working together in Europe to lay a solid foundation for achieving peace in cooperation with the United States.

AUD/USD falls to 0.68 on dismal Aussie/China statistics and risk aversion

Alina Haynes

Sep 01, 2022 15:16

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As bears cheer on weak Australian statistics and a risk-off mindset on Thursday, the AUD/USD drops to a new 1.5-month low near 0.6800. Yet, adverse concerns about China, its major customer, may also be to blame for the current weakness of the Aussie pair.

 

Caixin Manufacturing PMI in China fell to 49.5 from 50.2 predicted and 50.4 earlier, signaling the steepest decline in activity in three months.

 

In other news, Home Loans in Australia dropped by -7.0% in July, worse than the -3.0% drop forecast and the 3.3% drop seen in June. For the same time period, Investment Lending for Homes fell by -11.2%, compared to a drop of 6.3% in the previous month. It should be noted that contrary to projections of a 1.5% expansion, private capital expenditure in Australia shrank by 0.3% in the second quarter (Q2).

 

The risk premium on 10-year US Treasuries has risen to a two-month high of about 3.21 percent, and the risk premium on 2-year bond coupons has risen to its highest level since at least 2007. The S&P 500 Futures were trading at 3,930, down 0.36 percent intraday, their lowest level since late July as of publishing.

 

Recent market sentiment has been pushed down by worries about another ship blocking the Suez Canal, skepticism about China's covid circumstances, poor data, and conflicts with the United States over Taiwan. The president of Taiwan, Tsai Ing-Wen, has recently expressed an interest in bolstering ties with the United States in the semiconductor industry.

 

In light of the Fed's recent aggressive posture, despite conflicting data, AUD/USD bears are likely to hold control as China-related news is also unfavorable. Before Friday's release of the US Nonfarm Payrolls report, traders may find some diversion in today's release of the US ISM Manufacturing PMI for August, which is expected to be 52.8 from 52.0 before (NFP).

 

If the AUD/USD drops below May's low at 0.6830, the next major support is seen in early July near 0.6760. Alternately, a support-turned-resistance line from early August, near 0.6850, will join the 0.6830 barrier to probe the pair's corrective slide.

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