Japanese Yen Strengthens
The Japanese yen rose to a one-month high on bets of interest rate hikes and possible action by authorities. The currency rallied to 155 against the dollar this morning, on track for its best session since the recent joint move by the US and Japan. Officials were checking rates, seen as a warning sign before intervention. The Bank of Japan is widely expected to raise rates at its September 18 meeting, reportedly leaning toward a quarter-point hike, and keeping the door open for faster hikes after that.
Euro Zone and China Data
Services activity in the Euro zone fell to a two-month low in August, though private-sector demand held up. The latest S&P Global PMI eased from July but stayed above 50, the line between growth and shrinking. New business rose, and jobs grew at the fastest pace in eight months. Price pressures stayed high. The composite index, which combines services and manufacturing, remained above 52.
Services activity in China improved, pointing to stronger domestic demand. The private-sector PMI rose above 51 as new business and employment picked up. Input prices kept rising, mainly for materials, fuel, and labor. Business confidence for the coming year improved.
Tomorrow's Market Movers
Three things to watch. First, earnings reactions to today's reports. Second, the market reaction to Tesla's (TSLA) Cybercab unveiling tonight. Morgan Stanley (MS) said in a note it expects the stock to regain some momentum after the event, but warned that a weak showing could push it lower. Tesla (TSLA) closed today up almost 5.5%.
The most important item is the jobs report. Economists expect non-farm payrolls to show about 56,000 jobs added in August, following a surprise drop of 23,000 jobs in July. That is the big potential market mover, with numbers due in the morning.
