Major Overnight Headlines
• INR falls to record low versus USD overnight, Asian equity markets slump
• RBNZ’s Wheeler says will impose home loan lending limt from October, Thomson Reuters
• Norway’s Q2 real mainland GDP rises just 0.2% QoQ keeping weakening trend intact; NOK falls
Within the developed market FX space, the weaker NOK was really the only macro story to speak of this morning in London, whilst the spillover on major USD pairs from the distress overnight in Asia at best appeared indiscriminate, and rather haphazard. Judging by the anecdotal evidence and price action alone, trading conditions within the major pairs (specifically EUR/USD) appear too illiquid at present to “multi-task”; in other words, to reflect a broad macro view and handle one-off non-macro related flows or carry trade unwinds simultaneously without causing distortions.
Read the full report: FX Daily
BMO