The capital markets are quieter today. Equities remain heavy, but losses are comparatively mild.  Core bond yields are slightly softer.  The US dollar is firmer against the major and most emerging market currencies.  

The news stream is light and the main focus before the ECB meeting tomorrow is the US ADP employment estimate. A 200k increase is expected after 185k in July. The Bloomberg consensus is for a 218k increase in nonfarm payrolls when reported on Friday.  

The EIA energy report also will draw attention. The crude stockpile is expected to rise by 900k barrels.  Even if US production is not what it was estimated under the previous methodology, output is still trending higher than consumption.  Last week’s run-up to almost $50 a barrel for the Oct light sweet crude contract is a distant memory.  The nearly $1 loss today brings the contract to nearly $43.50, which is a 50% retracement of the rally off of the spike low on August 24.  The next retracement level is near $42.15.

Australia reported Q2 growth was half of what the consensus expected at 02% on the quarter. The Australian dollar was pushed below $.7000 for the first time in six years. It recovered to $0.7050 were it was sold again. A break of $0.6980 targets $0.6950. On Thursday, Australia reports retail sales and trade figures.  The derivatives markets are pricing in about a 50% chance of a November rat cut.  

The UK reported a less than expected improvement in construction PMI.  The August reading stands at 57.3, up from 57.1 in July, but shy of the 57.5 consensus forecast.  Sterling has under-performed this week, despite BOE’s Carney signaling higher rates in the UK at Jackson Hole last weekend. After the Aussie and Kiwi’s 2% loss over the past three sessions, sterling is the weakest of the majors, shedding about 0.75%.  It has been pushed through $1.53 for the first time since early June.The initial approach of support near $1.5250 has spurred some buying. It that level goes, stronger support is seen near $1.5200.