US stocks ended the session little changed as oil refinery stocks gained after Hurricane Harvey forced refineries in Houston, Texas to shut down. The Hurricane also weighed on US crude futures, which settled lower by $1.30 at $46.57 a barrel. Of note, sources said Saudi Arabia and Russia are pushing to extend their deal to limit crude oil production for another three months. In FX, the Euro continued to strengthen in the US session after hitting more than a 2½ year high versus the Greenback, while the Dollar index sunk to around a 6-month low following Friday’s comments from ECB President Draghi and Fed Chair Janet Yellen, while the Greenback was also on the back foot after the aforementioned Hurricane. In fixed, Treasury yields were mixed as investors digested the results of a 5-year note auction and the latest economic news and data. For the record, the US sold $34.0 Bln of 5-year notes at a high yield of 1.742% and with a bid-to-cover of 2.58.
Ahead of the Asian open, North Korea launched a ballistic missile which flew over Japanese airspace and landed into waters off Hokkaido, Northern Japan. In reaction, Japanese PM Abe said North Korea’s missile launch is an unprecedented serious and grave threat to Japan, adding they will request the UN strengthen pressures on North Korea. Meanwhile, the Pentagon said the North Korean missile did not pose a threat to the US and North America, adding the US military in in the process of collecting additional information. Perceived safe-haven assets, such as the Yen and Gold, saw a substantial shift higher with Usd/Jpy falling to 108.37. Elsewhere, German Finance Minister Schaeuble said a debt cut is not currently on the agenda for Greece.
Looking ahead, we get Japan’s jobless rate and overall household spending, as well as Australia’s weekly consumer confidence index.