European FX Open - AUD ticks lower, risk off

US stock futures all stand in the red at the time of writing, led by the -0.8% NASDAQ amid a Nvidia slide and a worst day for US stocks generally in near a month.

Risk-off looks to be the theme with the YEN starting the day a little firmer and AUD/USD a touch softer. The latter's latest moves coincide with an as forecast 0.2% q/q Australia Q2 GDP release as well as a slightly softer than expected household spending number for July (2.9% y/y vs 3.3% forecast). Consumers are seemingly exercising caution in the backdrop of continued elevated borrowing costs and stubbornly sticky inflation.

Meanwhile, China’s services activity expanded less than expected, the private Caixin survey coming in at 51.6 overnight vs the 51.8 consensus and 52.1 result the month previous, adding to worries over the economy’s strength.

The morning should be dominated by final services and composite PMIs for August across the continent.

After yesterday's ISM miss of 47.2, the US slate includes the trade balance, JOLTS job openings, durable goods and factory orders.

The BOC is also expected to cut interest rates by a further -25BPs to 4.25%. Thanks to BofA Global Research who wrote ahead the BOC will remain data dependent. Activity remains weak, unemployment is rising, and inflation is falling. The risk is for a -50BPs cut, but it is a low risk and USD/CAD is unlikely to move much in response to the Bank's action.

Also on the central bank front, speeches from Riksbank and ECB members are scheduled this session, with the Fed's Beige Book out tonight. The latter could show most districts continued to register slight to moderate growth.

Meanwhile, Bbg reports US Democratic presidential candidate Kamala Harris is proposing a ten-fold increase in the small business tax deduction for startup costs, a new weapon in her arsenal as she vies with Donald Trump to show voters who can best assuage their anxieties about the economy. And, GOLDMAN SACHS suggested US GDP faces a hit in the case of a win for Donald Trump and a boost if the Democrat Party sweep.

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