Focus on Jackson Hole, Korean Peninsula, dollar

The greenback stabilized after sliding against a basket of currencies on Monday as market watchers awaited clues on monetary policy direction from central bankers at Jackson Hole — although experts predict no surprises ahead.

The dollar index was mostly unchanged at 93.121 at 8:12 a.m. HK/SIN after falling as low as 92.997 in the overnight session. The U.S. currency edged up against the yen, with the greenback last fetching 109.12 yen after fetching as little as 108.86 yen overnight. The dollar had traded above the 110 handle at the end of last week.

European Central Bank President Mario Draghi will reportedly not be delivering any fresh policy messaging in his speech at Jackson Hole after his comments at a June forum in Portugal prompted traders to take the euro on a wild ride.

Despite that, the euro climbed more than 0.4 percent in the overnight session, likely on anticipation about a potential mention of ECB tapering in Draghi’s upcoming speech. The common currency was mostly flat at $1.1816 on Tuesday.

Markets appeared to be setting themselves up for a “buy the rumor, sell the fact” scenario in the euro, said IG Chief Market Strategist Chris Weston in a Tuesday note, adding that “the risk of disappointment is certainly growing.”

Beyond currency moves, markets will maintain an eye on developments on the Korean Peninsula as joint U.S.-South Korea military drills continue. Despite the decreased number of U.S. personnel participating in the war games — which are an annual occurrence — North Korea said the drills were a “reckless” development, Reuters reported.

On the earnings front, miner BHP announced its full-year profit rose nearly five-fold to $6.7 billion for the year that ended on June 30. Despite the jump, BHP’s profit missed a Thomson Reuters I/B/E/S forecast of $7.4 billion. BHP shares tacked on 0.78 percent in early trade.

In corporate news, Japan’s Fujitsu said it intended to sell its mobile phone operations, according to Nikkei Asian Review. The earliest round of bidding for the unit could take place as soon as September, Nikkei said. Fujitsu stock was up 0.82 percent in early trade.

Meanwhile, China’s Great Wall Motor established its interest in Fiat Chrysler Automobiles on Monday, Reuters reported. It was not apparent if Great Wall Motor wanted to acquire part or all of Fiat Chrysler, Reuters added.

Traders will also be looking to India’s Infosys after its shares tumbled more than 5 percent on Monday despite the company’s $2 billion share buyback plans announced at the weekend. The move followed Vishal Sikka’s departure from the CEO position at the IT services company.

On the energy front, oil prices climbed slightly after falling 2 percent on Monday. Global benchmark Brent crude advanced 0.25 percent to trade at $51.79 a barrel and U.S. West Texas Intermediate crude gained 0.32 percent to trade at $47.52.

Here’s the economic calendar for today (all times in HK/SIN):

  • 4:00 p.m.: Taiwan July jobless rate
  • 4:30 p.m.: Hong Kong July CPI
  • 5:00 p.m.: Bank Indonesia decision

Stocks stateside closed mixed on Monday, with a fall in tech and financial stocks capping gains.

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