European FX Open - Germany turns to the right

Canada and the US both enjoy public holidays today for Labour Day.

The USD starts the new week largely firmer, particularly vs the YEN.

In Europe, final manufacturing PMIs for August will be the focus with the likes of Germany under the spotlight.

Swiss retail sales and Italian final Q2 GDP and July PPI are among other data releases this morning.

Overnight, Japan Q2 capital spending rose 7.4% y/y vs the 10.0% estimate and 6.8% the month previous as firms boosted investment, reaffirming signs of confidence that the economy is recovering slowly with the help of an uptick in domestic demand-led activity (Bbg).

In China, there was ongoing divergence in official and private manufacturing PMIs. The former slipped to 49.1 in August, a softest since February, and rose to 50.4 in the latter.

On the central bank front, Swiss sight deposits are also scheduled.

And, RBA D-G Hauser said Australian interest rates are likely to stay unchanged in the near future because inflation is 'a bit stickier' than in the US, highlighting a global divergence as the Fed prepares to ease policy.

The big news to start the week comes from Germany and BBC News report the country's anti-immigration Alternative for Germany (AfD) is celebrating a 'historic success', with a big victory for the far-right party in the eastern state of Thuringia. The AfD won almost a third of the vote, nine points ahead of the conservative CDU, and far in front of Germany's three governing parties.

Staying with politics, in France, President Macron will meet today with Bernard Cazeneuve, a former Socialist Party official and ex-premier, as he heads toward naming France’s next PM.

And in the US, an EPIC MRA poll showed Kamala Harris erased most of Donald Trump’s lead among likely voters in Michigan with 45% support vs the ex-president's 46%.

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