Is This a Relief Rally: $SPY $USO $GLD

The Chinese central bank on Tuesday pumped the most funds into the financial system in open market operations since January 2014 amid efforts to ease a liquidity strain.

The People’s Bank of China (PBOC) conducted 150 billion yuan (23.4 billion) of seven-day reverse repurchase agreements (repo), a process in which central banks purchase securities from banks with an agreement to resell them in the future.

The reverse repo was priced to yield 2.5 percent, unchanged from the yield on a net injection last week of 150 billion yuan using reverse repos, according to a PBOC’s statement.

Liquidity in the money market has tightened due to dropping new yuan funds outstanding for foreign exchange and a depreciating Chinese yuan.

MARKET PULSE

The USD headed for its first weekly advance against the euro in 1M
USD appreciated 1.2 % during the past week to $1.1263 vs. EUR
U.S. data: 2Q GDP 3.7% vs estimated 3.2%
U.S. personal consumption 3.1% in line with estimates
U.S. weekly jobless claims 271k vs estimated274k
U.S. pending home sales 0.5% vs estimated 1.0%, y/y
U.S. GDP shows divide between rebound in growth and incomes
Fed’s Jackson Hole symposium kicks off
Kansas City Fed President George: ” Too soon to tell if market volatility will affect the U.S”
Today: Euro-zone economic confidence, U.K. GDP and German inflation data
France’s Macron pledges to make labor market more flexible
Ukraine wins debt relief as Russia refuses to join agreement
Inflation vanishes in Japan for 3rd time this year as oil drops
China expands debt swap quota to 3.2 trillion CNY ($500b)
Relief rally spreads across markets as oil jumps most in 6 years
Today: China industrial profits & Japan jobless and CPI
China FM Lou : China will struggle to meet 2015 fiscal revenue target
IMF could contribute a 5th to Greek bailou: ESM’s Regling
Greece’s Thanou sworn in as caretaker PM ahead of elections (First female PM)
EU’s Moscovici sees 2015 euro region growth around 1.5%
India -July key industries output data expected, prior was +3.0% y/y
WTI heads for biggest wkly advance since April after rising most in 6Y
Saudi King to visit Obama as Congress ponders Iran nuclear deal
Total CEO:”Crude prices to stay low for ‘some time’”
Venezuela pushes for emergency meeting on falling oil price
No change in oil products imports policy: Libya Tripoli NOC
Iran Oil Minister: Iran seeks return as OPEC No. 2
Today Baker Hughes U.S. rig count for Aug 28, prior 885
Crude inventories in U.S, fell by 5.45 M barrels to 450.8 M
Crude remain about 90 M barrels above the5-year seasonal average

FOREIGN EXCHANGE
MARKETS

USD on its first weekly advance against the EUR in more than a month
USD/JPY -0.06% at 120.96 (range 120.93-121.31)
EUR/USD +0.17% at 1.1265 (range 1.1232-1.1265)
AUD/USD +0.18% at 0.7179 (range 0.7164-0.7206)
USD/CAD -0.14% at 1.3181 (range 1.3167-1.3206)
GBP/USD +0.22% at 1.5437 (range 1.5401-1.5442)
USD/CHF -0.14% at 0.9649 (range 0.9647-0.9667)
U.S. Treasuries gain, with 10-year yield down 1 bp at 2.177%

FACTORS

The USD headed for its first weekly advance against the euro in 1M
USD appreciated 1.2 % during the past week to $1.1263
U.S. data: 2Q GDP 3.7% vs estimated 3.2%
U.S. personal consumption 3.1% in line with estimates
U.S. weekly jobless claims 271k vs estimated274k
U.S. pending home sales 0.5% vs estimated 1.0%, y/y
U.S. GDP shows divide between rebound in growth and incomes
Fed’s Jackson Hole symposium kicks off
Kansas City Fed President George: ” Too soon to tell if market volatility will affect the U.S”
Today: Euro-zone economic confidence, U.K. GDP and German inflation data
France’s Macron pledges to make labor market more flexible
Ukraine wins debt relief as Russia refuses to join agreement
Inflation vanishes in Japan for 3rd time this year as oil drops
China expands debt swap quota to 3.2 trillion CNY ($500b)
Relief rally spreads across markets as oil jumps most in 6 years
Today: China industrial profits & Japan jobless and CPI
China FM Lou : China will struggle to meet 2015 fiscal revenue target
IMF could contribute a 5th to Greek bailou: ESM’s Regling
Greece’s Thanou sworn in as caretaker PM ahead of elections (First female PM)
EU’s Moscovici sees 2015 euro region growth around 1.5%

GOLD
MARKETS

Gold fell 2.7 % this week, the first weekly loss in 3 weeks
Gold spot flat at $1,126.27 in Asian hours
Gold futures Dec added 0.3 % to $1,126 a 2.9 % weekly decline
Silver spot climbed 0.4 % to $14.5530

FACTORS

Gold headed for the biggest weekly decline in a month
A report showed the U.S. economy grew stronger than expected in Q2
ANZ:”The stronger USD and improving sentiment saw support for gold wane,”

CRUDE OIL
MARKETS

WTI rises as much as 2.1%, extending wkly advance
Brent Oct rose 89 cents, or 1.9 %, to $48.45
Brent Oct up 6.5 % this week most since April
Brent traded at a premium of $5 to WTI, vs. $5.01 on Aug. 21
WTI Oct up 90 cents to $43.46, opened at $43.41 in Asia
WTI rose $3.96 to $42.56 on Thu
WTI prices have climbed 7.3 % this week.
Volume of all futures traded was double the 100-day average

FACTORS

WTI heads for biggest wkly advance since April after rising most in 6Y
Saudi King to visit Obama as Congress ponders Iran nuclear deal
Total CEO:”Crude prices to stay low for ‘some time’”
Venezuela pushes for emergency meeting on falling oil price
No change in oil products imports policy: Libya Tripoli NOC
Iran Oil Minister: Iran seeks return as OPEC No. 2
Today Baker Hughes U.S. rig count for Aug 28, prior 885
Crude inventories in U.S, fell by 5.45 M barrels to 450.8 M
Crude remain about 90 M barrels above the5-year seasonal average

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