European FX Open - A Swiss morning & the ISM

USD/YEN pulls back from rebound highs of 147.17-21 into a key US data week.

USD/YEN opens about -0.5% lower as a T. Rowe official warned that investors have 'just seen the first shift” and they’re ignoring a mountain of Japanese money that may flow back home as rates rise.

And, Pimco Japan stated it expects the BOJ to raise rates again as early as January and is ready to invest in ultra long-term government bonds.

Ahead, it looks a Swiss morning.

CPI for August Tuesday dominates the agenda, with the core remaining at 1.1% y/y in July. Also, Q2 GDP is due, forecast at 0.5% q/q.

Ahead, the SNB is tipped to cut rates again in late September and the only question is whether the SNB cuts by -25BPs again or by the more aggressive -50BPs. We suspect the former at this stage even after a technical move from the SNB last week points to the dovish side when cutting the threshold factor on the remuneration of sight deposits. More of the banking sector's CHF sight deposits would be subject to a discount factor.

As North American players return to the fray, US ISM manufacturing dominates. Seen at 47.5 in August vs 46.8 the month previous and a likely fifth straight contractionary number. Components wise and in payrolls week, employment is also expected to stay deep in negative territory.

On the central bank front, the Riksbank governor Thedeen and BOE's Breeden are scheduled speakers, with ECB's Nagel coming after hours.

Elsewhere, US stock futures all stand in the red at the time of writing, led by the -0.4% NASDAQ.

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