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America's Roundup: Dollar climbs to two-week high as U.S.-China trade tensions ease, Gold falls, Oil steadies on OPEC cuts, but oversupply fears persist-July 2nd,2019

Market Roundup

• Trump says China trade talks 'back on track,' new tariffs on hold

• U.S.-China trade agreement takes little pressure off Fed to cut rates

• US June ISM Manufacturing PMI, 51.7, 51.0 forecast, 52.1 previous

• US May Construction Spending MM, -0.8%, 0.1% forecast, 0.0% previous

• US June Markit Mfg PMI Final, 50.6, 50.1 previous

• US June ISM Mfg Prices Paid, 47.9, 53.0 forecast, 53.2 previous

• OPEC extends oil cut to prop up prices as economy weakens

• Iran amasses more enriched uranium than allowed by nuclear deal

Looking Ahead - Economic Data (GMT)

• 04:30 Australia July RBA Cash Rate, 1.00% forecast, 1.25% previous

Looking Ahead - Events, Other Releases (GMT)

• 07:00 Executive Board meeting, monetary policy meeting no. 3 in Stockholm

• 08:30 Dutch central bank president Klaas Knot and Lithuanian central bank governor Vitas Vasiliauskas, both members of the rate-setting body at the European Central Bank, speak in Vilnius

• 14:05 BoE's Mark Carney attends Local Government Association Annual Conference and Exhibition, Bournemouth, during regional visit to Central Southern in London

• 15:00 Cleveland Fed's Loretta Mester participates in Distinguished Speakers Seminar, European Economics and Financial Centre in London

Currency Summaries

EUR/USD: The euro slipped lower against the U.S. dollar on Monday, as dollar was boosted after the United States and China agreed to resume trade talks, easing tensions between the world's two largest economies. While reports of an agreement had been flagged ahead of U.S. President Donald Trump and Chinese counterparty Xi Jinping's meeting on the sidelines of the G20 meeting in Osaka, Japan, the outcome was more positive than investors had expected. Trump said he would hold back on new tariffs and China will buy more farm products, and he offered to ease restrictions on tech company Huawei. An index that tracks the dollar versus a basket of six major currencies was up 0.71 at of 96.81 on Monday. Immediate resistance can be seen at 1.1312 (11 DMA), an upside break can trigger rise towards 1.1353 (5 DMA).On the downside, immediate support is seen at 1.1280 (Daily low), a break below could take the pair towards 1.1226 (50 DMA).

GBP/USD: The British pound declined against the dollar on Monday, as a broadly resurgent dollar sapped appetite for the British currency after the United States and China agreed at a G20 summit in Japan to restart trade talks.That deal came after U.S. President Donald Trump offered concessions to his Chinese counterpart Xi Jinping when the two met on the sidelines of a Group of 20 summit in Japan. The ruling Conservative Party will elect its next leader by the end of July, giving them only a few months to try to renegotiate the Brexit withdrawal agreement. The pound slipped 0.44% to a low of $1.2638, bringing losses since early-May to nearly 5% and to its lowest levels since June 19.Immediate resistance can be seen at 1.2733 (Daily high), an upside break can trigger rise towards 1.2808 (Higher Bollinger Band).On the downside, immediate support is seen at 1.2600 (Psychological level), a break below could take the pair towards 1.2536 (Lower Bollinger Band).

USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Monday, as investors flocked to riskier assets after the United States and China agreed to resume trade talks, while the prospect of no U.S. sanctions on Turkey helped its markets outperform. President Donald Trump offered concessions to China including no new tariffs and an easing of restrictions on tech company Huawei, at the G20 summit in Osaka, Japan over the weekend. Trump said China agreed to make unspecified new purchases of U.S. farm products and return to the negotiating table. At (2005 GMT), the Canadian dollar  traded 0.34 percent lower at 1.3138 to the greenback. Immediate resistance can be seen at 1.3147 (38.2% retracement level), an upside break can trigger rise towards 1.3200 (Psychological level).On the downside, immediate support is seen at 1.3070  (5 DMA), a break below could take the pair towards 1.3000 (Psychological level).

USD/JPY: The U.S. dollar strengthened against the yen on Monday, as appetite for risk-sensitive currencies improved after the United States and China agreed to restart their troubled trade talks. After meeting Chinese President Xi Jinping in Japan on Saturday on the sidelines of Group of 20 summit, U.S. President Donald Trump said he would hold back on new tariffs and that China will buy more farm products. Trump also said the U.S. Commerce Department would study over the next few days whether to take Huawei HWT.UL off the list of firms banned from buying components and technology from U.S. companies without government approval. The dollar was up 0.3% at 108.235 yen   after going as high as 108.510.Strong resistance can be seen at 108.54 (Daily high), an upside break can trigger rise towards 109.32 (50 DMA).On the downside, immediate support is seen at 107.79 (11 DMA), a break below could take the pair towards 107.00 (Psychological level). 

Equities Recap

European shares surged on Monday to their highest in nearly two months, led by trade-sensitive technology stocks after the United States and China agreed to restart trade negotiations.

The UK's benchmark FTSE 100 closed up by 1  percent, FTSEurofirst 300 ended the day up  by 0.84 percent, France’s CAC finished the up by 0.6 percent. Germany's Dax finished the day up by 1 percent .

U.S. stocks climbed on Monday, but finished off earlier highs, led by gains in technology stocks on optimism for progress in U.S.-China trade talks and signs of a likely reprieve for Chinese telecom company Huawei.

Dow Jones closed up by 0.42 percent, S&P 500 ended up 0.72 percent, Nasdaq finished the day up by 1.04 percent.

Treasuries Recap

U.S. Treasury yields rose on Monday as China and the United States' agreement to restart trade talks caused investors to pare their safe-haven holdings of bonds, although the selling was limited by worries about global economic growth.

Commodities Recap

Gold slid by as much as 2% on Monday as the dollar rallied and investors flocked to higher-risk assets after the agreement to resume of trade talks between the United States and China.

Spot gold was down 1.66% to $1,385.75 per ounce at 1:46 p.m. EDT (1746 GMT), after earlier falling to $1,381.51, its lowest since June 20.U.S. gold futures settled 1.7% lower to $1,389.30 per ounce.

Oil prices pared gains on Monday after worries about oversupply persisted, pulling back from an early rally as OPEC extended supply cuts until March 2020 during a meeting in Vienna.

Brent crude futures for September delivery settled up 32 cents a barrel at $65.06. During the session, they touched an intraday high of $66.75. The August delivery contract closed at $66.55 a barrel on Friday.

U.S. crude futures for August climbed 62 cents to settle at $59.09 a barrel, after earlier touching their highest in over five weeks at $60.28.
 

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