Market Roundup
•US Redbook (YoY) 4.6%, 0.6% previous
•US Redbook (MoM) 5.8%,4.1% previous
•Brazil Aug Markit Manufacturing PMI 64.7 , 58.2 previous
•Canada Aug RBC Manufacturing PMI 55.1, 52.9 previous
•US Aug Manufacturing PMI 53.1, 53.6 forecast, 50.9 previous
•US Jul Construction Spending (MoM) 0.1%, 1.0% forecast ,-0.7% previous
•US Aug ISM Manufacturing New Orders Index 67.6, 61.5 previous
•US Aug ISM Manufacturing PMI 56.0, 54.5 forecast, 54.2 previous
•US Aug ISM Manufacturing Employment 46.4, 45.8 forecast, 44.3 previous
•US Aug ISM Manufacturing Prices 59.5, 54.0 forecast, 53.2 previous
•US Aug Texas Services Sector Outlook -26.7 previous
•New Zealand GlobalDairyTrade Price Index-1.7% previous
•Canada Aug RBC Manufacturing PMI 55.1, 52.9 previous
Looking Ahead Economic Data
•22:45 New Zealand Terms of Trade - Exports Prices (Q2) -1.6%,-0.2 previous
•22:45 New Zealand Terms of Trade - Imports Prices (Q2) 0.80, previous ,-0.7% previous
•22:45 New Zealand Terms of Trade - Exports Volume (QoQ) (Q2) -4.3%,1.8% previous
•23:30 US Total Vehicle Sales 1 4.50M previous
•01:30 Australia GDP (QoQ) (Q2) -6.0%,-0.3% previous
•01:30 Australia GDP Capital Expenditure (Q2) -0.8% previous
•01:30 Australia GDP Chain Price Index (Q2) 1.1 previous
•01:30 Australia GDP (YoY) (Q2) -5.3%, 1.4% previous
•01:30 Australia GDP Final Consumption (Q2) -0.4% previous
Looking Ahead - Events, Other Releases (GMT)
•No significant events
Currency Recap
EUR/USD: The euro broke through the $1.20 mark for the first time since 2018 on Tuesday and the dollar slipped to a multi-year low as investors bet the Federal Reserve’s policy framework meant U.S. rates would stay low for longer. The euro reached $1.2011 EUR= in North American trade, a 28-month high, but pared gains shortly after.The Fed’s announcement last week that it would tolerate periods of higher inflation and focus more on employment has encouraged traders to sell the dollar, with the euro the biggest beneficiary. Immediate resistance can be seen at 1.1950 (23.6%fib), an upside break can trigger rise towards 1.2000 (Psychological level).On the downside, immediate support is seen at 1.1884 (Daily low), a break below could take the pair towards 1.1842 (38.2% fib).
GBP/USD: The British pound scaled eight-month highs above $1.34 on Tuesday as broad-based dollar weakness deepened in the wake of a new Federal Reserve policy framework that suggests U.S. interest rates will remain at record lows for the foreseeable future.However, gains were capped amid deadlock in Brexit negotiations and ahead of a mid-week speech by Bank of England Governor Andrew Bailey, before the central bank’s next monetary policy announcement on Sept. 17. The pound strengthened 0.3% to $1.3415, its highest level since mid-December 2019.Immediate resistance can be seen at 1.3400 (Psychological level), an upside break can trigger rise towards 1.3526 (Dec 13th 2019 high).On the downside, immediate support is seen at 1.3305 (23.6% fib), a break below could take the pair towards 1.3181 (23.6%fib).
USD/CAD: The Canadian dollar strengthened to a near eight-month high against its U.S. counterpart on Tuesday as the price of oil, one of Canada's major exports, rose and the prospect of an extended period of low interest rates weighed on the greenback. U.S. crude oil futures were up 1.1% at $43.06 a barrel as data in China and Europe showed manufacturing demand rebounding from coronavirus-induced lows. The Canadian dollar was trading 0.1% higher at 1.3032 to the greenback. The currency touched its strongest intraday level since Jan. 8 at 1.2994.In August, the loonie notched its biggest monthly advance since June 2019, ending 2.8% higher. Immediate resistance can be seen at 1.3084 (5DMA), an upside break can trigger rise towards 1.3130 (38.2%fib).On the downside, immediate support is seen at 1.3009 (23.6% fib), a break below could take the pair towards 1.3996 (Jan 6th Low).
USD/JPY: The dollar strengthened against the Japanese yen on Tuesday as investors placed bets on who will become Japan’s new prime minister. The largest faction in the ruling Liberal Democratic Party has thrown its support behind Yoshihide Suga, who currently serves as chief cabinet secretary. Suga is a close ally of Abe and is likely to continue many of Abe’s policies if he becomes the new prime minister. The Japanese yen weakened 0.04% versus the greenback at 105.94 per dollar. Strong resistance can be seen at 106.42 (50DMA), an upside break can trigger rise towards 106.86(50% fib).On the downside, immediate support is seen at 105.15 (Lower BB), a break below could take the pair towards 105.00 (Psychological level).
Equities Recap
European shares fell for a fourth straight session on Tuesday due to losses in British blue chips and weak euro zone inflation data, while the technology sector outperformed on gains in major Apple suppliers.
UK's benchmark FTSE 100 closed down by 1.71 percent, Germany's Dax ended up by 0.22 percent, France’s CAC finished the day down by 0.18 percent.
The S&P 500 and the Nasdaq hit new highs on Tuesday with technology leading the charge as Apple and Zoom Video soared and better-than-expected U.S. manufacturing sector data fueled optimism about the economic recovery.
Dow Jones closed up by 0.66% percent, S&P 500 closed up by 0.63 % percent, Nasdaq settled up by 1.30% percent.
Treasuries Recap
U.S. Treasury yields rose on Tuesday ahead of the release of manufacturing data and as higher stock index futures indicated investors were still in the mood for risk.
The benchmark 10-year yield was last up 1.8 basis points at 0.7113%.
Commodities Recap
Gold prices jumped more than 1% on Tuesday to a near two-week high, following the steepest fall inthe dollar in more than two years as investors bet on U.S. interest rates staying lower for longer.
Spot gold was up 1% to $1,989.78 per ounce by 1203 GMT, having earlier hit its highest since Aug. 19 at $1,991.91.U.S. gold futures also rose nearly 1% to $1,997.30.
Oil prices edged higher on Tuesday as better-than-expected U.S. manufacturing activity data spurred hope for a post-pandemic economic recovery, and as analysts forecast a sixth weekly drawdown in U.S. crude inventories.
Brent crude futures settled up 30 cents at $45.58 a barrel. U.S. West Texas Intermediate futures settled at $42.76 a barrel, up 15 cents.
