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America's Roundup: Dollar fades from 13-month high, Wall Street ends lower, Gold hits more than 18-month low, Oil tumbles on surprise build in U.S. crude inventories-August 16th, 2018

Market Roundup

• Turkey doubles tariffs on some U.S. imports; lira rallies.

• Turkish lira undershooting fair value -Institute of International Finance.

• U.S. Jul Retail Sales m/m, 0.5%, 0.1% forecast, 0.5% previous, 0.2% revised.

• U.S. Jul Industrial Production m/m, 0.1%, 0.3% previous, 0.6% previous, 1.0% revised.

• U.S. Jun Business Inventories m/m, 0.1%, 0.1% forecast, 0.4% previous, 0.3% revised.

• Ex-Trump aide Manafort had 'huge dumpster of hidden money,' court told.

• Canadian home sales rise in July from June - real estate group.

• Trump adviser Bolton to meet Russian officials next week –Kremlin.

• U.S. targets Chinese and Russian firms with breach of North Korea sanctions.

• Significant short-term market impact to no-deal Brexit -UK's Hunt.

Looking Ahead - Economic Data (GMT)

• 15 Aug 23:50 Japan Jul Exports y/y, 6.3% forecast, 6.7% previous

• 15 Aug 23:50 Japan Jul Imports y/y, 14.4% forecast, 2.5% previous

• 15 Aug 23:50 Japan Jul Trade Balance Total Yen, -50.0b forecast, 721.4b previous

• 16 Aug 01:30 Australia Jul Employment, 15k forecast, 50.9k previous

• 16 Aug 01:30 Australia Jul Participation rate, 65.7% forecast, 65.7% previous

• 16 Aug 01:30 Australia Jul Unemployment Rate, 5.4% forecast, 5.4% previous 

• 16 Aug N/A China  Jul FDI YTD, 1.10% previous 

Looking Ahead - Events, Other Releases (GMT)

• 08:00 Norway Central Bank announces interest rate decision-Oslo

• N/A Swedish Finance Minister Magdalena Andersson presents new economic forecasts and spending for coming years-Sweden

Currency Summaries

EUR/USD is likely to find support at 1.1289 levels and currently trading at 1.1350 levels. The pair has made session high at 1.1354 and hit lows at 1.1297 levels. The euro was little against dollar on Wednesday as trade tensions heated up as Turkish President Tayyip Erdogan doubled tariffs on some U.S. imports, and China lodged a complaint against American trade policies with the World Trade Organization. The lira has lost more than 40 percent of its value against the dollar this year, hit by worries over President Tayyip Erdogan's calls for lower interest rates and his fraying ties with the United States. Markets are concerned by Erdogan's influence over the economy and his resistance to interest rate increases to tackle double-digit inflation. The rally in the dollar prompted selling in both the euro and the British pound. The single currency drifted down toward $1.13 for the first time since July 2017 and sterling dipped below $1.27 for the first time since June last year. The euro is under pressure because of the impact of the Turkish lira collapse on euro zone banks with exposure to Turkey and due to concerns about a fiscal spending spree by the Italian government which is involved in a standoff with Brussels. An index that tracks the dollar against six major currencies was up 0.16 percent at 96.885 after hitting 96.984 earlier, the highest since June 2017.

GBP/USD is supported in the range of 1.2655 levels and currently trading at 1.2699 levels. It reached session high at 1.2709 and dropped to session low at 1.2656 levels. Britain's pound declined against the dollar on Wednesday as greenback strengthened, leaving the pound at its weakest since June 2017 and facing its longest losing streak since the depths of the financial crisis in 2008.Sterling has weakened sharply in August as traders grow increasingly worried that Britain will crash out of the European Union next year without a trade deal, and as the dollar has surged.On Wednesday the pound slipped further to as low as $1.2689, its weakest since June 22, 2017, as the dollar extended its rally and after British inflation data for the month of July came in as expected. A 12th session of losses would match the pound's losing run of August 2008.The pound also fell versus the euro after earlier gains, and was down 0.1 percent at 89.340 pence per euro. Consumer price inflation nudged up to 2.5 percent year-on-year in July from 2.4 percent the previous month, in line with a poll of analysts, data showed on Wednesday. The rise is the first time inflation has picked up in 2018 and leaves many British households still feeling squeezed - workers' wagers have failed to keep up with inflation for much of the past decade.Data on Tuesday showed British workers' wages rising at their slowest rate for nine months, up 2.4 percent annually, although there was also a surprise fall in the unemployment rate.

USD/CAD is supported at 1.3048 levels and is trading at 1.3128 levels. It has made session high at 1.3174 and lows at 1.3100 levels. The Canadian dollar weakened against its U.S. counterpart on Wednesday as oil prices fell and stronger greenback weighed on Canadian dollar. Stocks have been volatile in recent days due to the prospect of an economic crisis in Turkey spreading to other emerging market countries, particularly those that borrow in U.S. dollars. The greenback   rose against a basket of major currencies as data showed U.S. retail sales grew more than forecast in July. Canada exports many commodities and runs a current account deficit so its economy could be hurt if the flow of trade or capital slows.The price of oil, one of Canada's major exports, was pressured by a weakening global economic growth outlook and data showing rising U.S. crude inventories. Resales of Canadian homes rose 1.9 percent in July from June, notching the third straight monthly rise but remaining below the highs seen in recent years, the Canadian Real Estate Association said. Canada's manufacturing sales data for June is due on Thursday and the July inflation report on Friday. The Canadian dollar was last trading 0.4 percent lower at C$1.3127 to the greenback. The currency, which touched a near 3-week low of C$1.3179 on Monday, traded in a range of C$1.3070 to C$1.3174.

AUD/USD is supported around 0.7200 levels and currently trading at 0.7236 levels. It hit session high at 0.7246 and made session lows at 0.7205 levels. The Australian dollar declined against the US dollar on Wednesday as strains in emerging markets darkened the outlook for global growth, while a strengthening U.S. currency piled pressure on commodity prices. The Aussie dollar retreated to its lowest since early 2017 at $0.7202 having shed more than two cents since the slide in the Turkish lira started grabbing headlines last week. Bears were now eyeing a $0.7160 trough from December 2016 and another at $0.7145 hit in May of the same year. Australia dollar is heavily reliant on resource exports and are leveraged to world demand. It is easily traded currencies which investors use to hedge risks in emerging markets. With the Turkish lira, Argentine peso, South African rand, Chinese yuan and Indian rupee all under pressure, the inclination has been to sell Aussie. The Aussie also got some unhelpful news at home when data on wages for the second quarter showed annual growth stuck at a miserly 2.1 percent, well below levels that would ensure a much-needed acceleration in inflation. The head of the Reserve Bank of Australia (RBA) has argued that wages need to be growing around 3.5 percent for inflation to reach even the midpoint of the central bank's 2 to 3 percent target band.

Equities Recap

European shares sold off sharply on Wednesday after Turkey doubled tariffs on some U.S. imports, and miners had their worst day since Britain's 2016 Brexit vote on sliding commodity prices.

UK's benchmark FTSE 100 closed up by 0.8 percent, the pan-European FTSEurofirst 300 ended the day down by 1.59 percent, Germany's Dax ended down by 1.9 percent, France’s CAC finished the day down by 2.1 percent.

U.S. stocks closed lower on Wednesday, with the S&P 500 posting its biggest daily percentage decline since June, as investors turned risk averse on a series of disappointing earnings and escalating global tariff worries.

Dow Jones closed down by 0.56 percent, S&P 500 ended down by 0.77 percent, Nasdaq finished the day down by 1.25 percent.

Treasuries Recap

U.S. Treasury yields fell on Wednesday after two straight days of gains as risk appetite soured amid nagging concerns about fallout from the Turkish crisis hitting other emerging markets.

In afternoon trading, U.S. 10-year yields fell to 2.849 percent, down from Tuesday's 2.895 percent. U.S. 30-year yields slid to 3.022 percent, from 3.062 percent late on Tuesday.

On the front end of the curve, U.S. 2-year yields eased to 2.604 percent from 2.633 percent on Tuesday.

Commodities Recap

Oil futures slid on Wednesday, with U.S. crude settling 3 percent lower after government data showed a surprise weekly increase in domestic crude stockpiles, compounding worries about the global economic growth outlook.

U.S. crude futures settled at $65.01 a barrel, down $2.03, or 3 percent. Brent crude futures were down $1.70, or 2.35 percent, at $70.76 a barrel.

Gold fell to a more than 18-month low on Wednesday as the dollar climbed towards its highest in over a year on concerns about global market contagion triggered by recent declines in the Turkish lira.

Spot gold lost 1.3 percent at $1,178.33 per ounce by 1:44 p.m. EDT (1744 GMT), after hitting its lowest since early January 2017 at $1,174.35.

U.S. gold futures for December delivery settled down $15.70, or 1.3 percent, at $1,185 per ounce.
 

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September 24 19:00 UTC Released

USFCOJ Stock

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0.633 Pounds B

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0.691 Pounds B

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503.449 Pounds M

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485.007 Pounds M

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-1541 %

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-1541 %

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2016 bln ARS

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Bln AR bln ARS

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January 31 00:00 UTC 341377341377m

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