Market Roundup
•US Consumer confidence, new home sales jump
•Positive U.S.-China headlines bolster sentiment
•US Redbook (YoY) 4.1%, -2.8% previous
•US Redbook (MoM) 0.6%,2.8% previous
•US June House Price Index 289.9, 287.3 previous
•US June House Price Index (MoM ) 0.9%,-0.3% previous
•US June House Price Index (YoY) 5.7%,4.9% previous
•Belgium Aug NBB Business Climate -12.0,-11.5 forecsst, -13.9 previous
•US S&P/CS HPI Composite - 20 n.s.a. (YoY) 3.5%, 3.8% forecsst,3.7% previous
• US June S&P/CS HPI Composite - 20 n.s.a. (MoM) 0.2%,0.4% previous
• US Aug CB Consumer Confidence 84.8, 93.0 forecast, 92.6 previous
• US Aug Richmond Services Index 2, -14 previous
• US Aug Richmond Manufacturing Index 18, 10 previous
• US Aug Richmond Manufacturing Shipments 22, 23 previous
• US Jul New Home Sales 901K. 785K forecast, 776K previous
• US Jul New Home Sales (MoM) 13.9%, 1.3% forecast,13.8% previous
Looking Ahead – Economic Data (GMT)
•23:50 Japan Corporate Services Price Index (CSPI) (YoY) 0.8% previous
• 01:30 Australia Construction Work Done (QoQ) (Q2) -5.8% forecast, -1.0% previous
• 05:30 Japan Leading Index 85.0, 78.4 previous
Currencies Summaries
EUR/USD: The euro strengthened against dollar on Tuesday after a German business climate index rose more than expected in August as both manufacturing and services picked up steam, boosting hopes that Europe’s largest economy is set for a strong recovery following the massive coronavirus pandemic shock. Germany’s Ifo Institute said its business climate index rose to 92.6, its fourth straight monthly increase and stronger than economists had expected, lifting hopes that German companies are recovering from the coronavirus shock. The euro gained 0.41% on the day to $1.1835, after reaching $1.1965 on Monday, the highest since May 2018.Immediate resistance can be seen at 1.1844(38.2% fib), an upside break can trigger rise towards 1.1949(23.6%fib).On the downside, immediate support is seen at 1.1752 (50% fib), a break below could take the pair towards 1.1729 (30DMA).
GBP/USD: Sterling rose on Tuesday as the dollar slipped and investors shrugged off an unexpected drop in Britain’s monthly retail sales data.The dollar fell after investors returned to riskier currencies as a successful phone call between top trade officials in the United States and China boosted positive sentiment. Sterling was last up 0.4% at $1.3122 versus the greenback. It was little changed at 90.195 pence versus the euro. The pound rose in spite of the monthly retail sales balance falling to minus 6 in August, according to data from the Confederation of British Industry (CBI), far below forecasts Immediate resistance can be seen at 1.3154(Daily high), an upside break can trigger rise towards 1.3213 (23.6%fib).On the downside, immediate support is seen at 1.2983 (38.2% fib), a break below could take the pair towards 1.2950 (50%fib).
USD/CAD: The Canadian dollar rose against its broadly weaker U.S. counterpart on Tuesday, as oil prices climbed and signs of calmer trade relations between the United States and China bolstered investor sentiment. The loonie was trading 0.2% higher at 1.3186 to the greenback, or 75.84 U.S. cents. The currency, which on Monday touched a four-month low intraday at 1.3130, traded in a range of 1.3177 to 1.3239. Canada is a major exporter of oil and other commodities, so the loonie tends to be sensitive to the global flow of trade and capital.U.S. crude prices settled 1.7% higher at $43.35 a barrel, supported by production cuts in the U.S. Immediate resistance can be seen at 1.3266 (21DMA), an upside break can trigger rise towards 1.3334 (38.2% fib).On the downside, immediate support is seen at 1.3154 (23.6% fib), a break below could take the pair towards 1.3046 (Lower BB).
USD/JPY: The dollar strengthened against the Japanese yen on Tuesday as the U.S and China indicated progress in trade talks, and as hopes of new coronavirus treatments boosted broader sentiment among global investors. The upbeat sentiment followed reports that top U.S. and Chinese officials see progress in resolving concerns around the Phase 1 trade deal reached between the two countries in January.U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke with Chinese Vice Premier Liu He, the U.S. Treasury said in a statement on Tuesday. Strong resistance can be seen at 106.76 (50% fib), an upside break can trigger rise towards 107.24 (Higher BB).On the downside, immediate support is seen at 106.06 (5 DMA), a break below could take the pair towards 105.52 (38.2% fib).
Equities Recap
European shares fell on Tuesday, hurt by losses in British blue chips, while mixed economic data and continued growth in novel coronavirus cases cut short optimism over a possible COVID-19 treatment.
UK's benchmark FTSE 100 closed down by 1.13 percent, Germany's Dax ended down by 0.04 percent, France’s CAC finished the day up by 0.01 percent.
The S&P 500 edged higher on Tuesday, with a drop in Apple stock capping gains from positive developments in U.S.-China trade and fresh progress in the medical battle against the coronavirus pandemic.
Dow Jones closed down by 0.21% percent, S&P 500 closed up by 0.36% percent, Nasdaq settled up by 0.71% percent.
Treasuries Recap
Longer-term U.S. Treasury yields were higher on Tuesday and a closely watched part of the yield curve steepened as investors moved into riskier assets on trade hopes and a solid auction of 2-year notes.
The benchmark 10-year yield was up 3.9 basis points at 0.6851% in afternoon trading after reaching as high as 0.716% in the morning, its first time above 0.7% since Aug. 17.
Commodities Recap
Gold prices fell on Tuesday as hopes surrounding a potential COVID-19 vaccine and positive signals on the U.S.-China trade front buoyed risk sentiment and offset support for the metal from a weaker dollar.
Spot gold fell 0.3% to $1,926.06 per ounce by 1144 GMT. U.S. gold futures were down 0.2% to $1,936.10 per ounce.
Crude oil prices rose to a five-month high on Tuesday as U.S. producers shut most offshore output in the Gulf of Mexico ahead of Hurricane Laura even as rising coronavirus cases in Asia and Europe capped gains.
Brent futures rose 73 cents, or 1.6%, to settle at $45.86 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 73 cents, or 1.7%, to settle at $43.35.
