Market Roundup
•US Jul S&P Global Composite PMI 47.5 forecast, 47.5 previous
•US Jun US Factory Orders (MoM) 2.0%, 1.1% forecast, 1.6% previous
•US Jul Services PMI 47.3 ,52.7 forecast, 47.0 previous
•US ISM Non-Manufacturing PMI 56.7 ,53.5 forecast, 55.3 previous
•US Jul ISM Non-Manufacturing Prices 72.3, 80.1 previous
•US Jul ISM Non-Manufacturing Business Activity 59.9, 54.0 forecast, 56.1 previous
•US Cushing Crude Oil Inventories 0.926M ,0.751M previous
• US Crude Oil Inventories 4.467M ,-0.629M forecast, -4.523M previous
• US Crude Oil Imports 2.214M ,-1.144M previous
Looking Ahead - Economic Data (GMT)
•01:30 Australia Jun Imports (MoM) 6% previous
• 01:30 Australia Jun Exports (MoM) 9% previous
• 01:30 Australia Jun Trade Balance 14.000B forecast, 15.965B previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Fxbeat
EUR/USD: The euro dipped on Wednesday as dollar strenthed on surprise pick up in the U.S. service sector in July, supporting views that the U.S. economy was not in recession. Economic data showed an unexpected acceleration of services activity and a robust increase in factory orders, suggesting that the economy was healthy enough to withstand the hawkish monetary policy from the U.S. Federal Reserve. The Institute for Supply Management said its non-manufacturing PMI rebounded to a reading of 56.7 last month from 55.3 in June, ending three straight monthly declines. Investors continued to follow the developments on the geopolitical front where U.S. House Speaker Nancy Pelosi's visit to Taiwan has raised concerns about fresh tensions between the two superpowers, the U.S. and China. Immediate resistance can be seen at 1.0194(11DMA), an upside break can trigger rise towards 1.0282(38.2%fib).On the downside, immediate support is seen at 1.0110(23.6%fib, a break below could take the pair towards 1.0032(Lower BB).
GBP/USD: The British pound nudged higher on Wednesday against as investor focus remained on the Bank of England policy meeting on Thursday, at which the central bank is expected to raise rates for the sixth consecutive time. Money markets are currently pricing in a greater than 90% chance of an outsized 50 basis point rate hike at Thursday’s meeting, as the central bank attempts to cool inflation from a four-decade high of 9.4%.More than 70% of 65 analysts and economists surveyed by Reuters also expect a half-point increase from the bank’s Monetary Policy Committee this week, a poll conducted between July 27 and Aug. 1 found. Immediate resistance can be seen at 1.2214(38.2%fib), an upside break can trigger rise towards 1.2308(23.6%fib).On the downside, immediate support is seen at 1.2131(50%fib),a break below could take the pair towards 1.2049(61.8%fib).
USD/CAD: The Canadian dollar strengthened against the greenback on Wednesday as worries about a possible recession eased following encouraging economic data from the United States, Canada’s largest trading partner, offsetting a slide in oil prices. Wall Street rallied as data showed that the U.S. services sector rebounded unexpectedly in July and orders for U.S.-manufactured goods increased solidly in June. Canada sends about 75% of its exports to the United States, including oil.U.S. crude oil futures settled nearly 4% lower at $90.66 a barrel after U.S. data showed crude and gasoline stockpiles unexpectedly surged last week and as OPEC+ said it would raise its oil output target by 100,000 barrels per day. The Canadian dollar gained 0.3% to 1.2838 per greenback , after trading in a range of 1.2833 to 1.2891. Immediate resistance can be seen at 1.2866(38.2%fib), an upside break can trigger rise towards 1.2912 (21DMA).On the downside, immediate support is seen at 1.2833 (5DMA), a break below could take the pair towards 1.2783 (50%fib).
USD/JPY: The dollar steadied against yen on Wednesday as dollar advanced after data showed a surprise pickup in the U.S. services industry in July, while hawkish comments from Federal Reserve officials this week also supported the greenback. The Institute for Supply Management said its non-manufacturing PMI rebounded last month from June. The increase ended three straight monthly declines. It also showed supply bottlenecks and price pressures eased, and backed up the view that the economy is not in a recession. The greenback rallied on Tuesday after a trio of Fed officials signaled that the central bank remains "completely united" on increasing rates to a level that will put a dent in the highest U.S. inflation since the 1980’s.Strong resistance can be seen at 134.97(11DMA), an upside break can trigger rise towards 136.19(July 5th high).On the downside, immediate support is seen at 132.20 (5DMA), a break below could take the pair towards 131.76 (50%fib).
Equities Recap
European stocks shrugged off a weak start and moved higher as the session progressed on Wednesday to eventually close with fairly solid gains.
UK's benchmark FTSE 100 closed up by 0.49 percent, Germany's Dax ended up by 1.03 percent, France’s CAC finished the day up by 0.97 percent.
U.S. stocks jumped to a sharply higher close and Treasury yields touched two-week highs on Wednesday as robust economic data, upbeat corporate guidance and easing geopolitical concerns boosted investor risk appetite.
Dow Jones closed up by 1.29% percent, S&P 500 closed down by 1.56% percent, Nasdaq settled up by 2.58% percent.
Treasuries Recap
U.S. Treasury yields slipped from two-week highs on Wednesday in choppy trading, as investors digested strong U.S. economic data and hawkish comments from Federal Reserve officials that suggested more rate hikes are on the horizon.
The yield on 10-year Treasury notes fell 2.9 bps to 2.7137%, after earlier hitting a two-week high of 2.851%.
The two-year U.S. Treasury yield, which typically tracks rate expectations, was little changed at 3.0774%. Earlier, that yield touched a two-week peak of 3.2%.
Commodities Recap
Gold prices traded in a tight range on Wednesday, pressured by a stronger dollar and Treasury yields as hawkish comments from U.S. Federal Reserve officials pulled the metal further away from last session's one-month peak.
Spot gold rose 0.1% to $1,761.76 per ounce by 2:37 p.m. ET (1837 GMT), seesawing in a roughly $20 range, while U.S. gold futures fell 0.7% to $1,776.4.
Oil prices slid about 4% on Wednesday to almost six-month lows, after U.S. data showed crude and gasoline stockpiles unexpectedly surged last week and as OPEC+ said it would raise its oil output target by 100,000 barrels per day (bpd).
Brent crude futures settled down $3.76, or 3.7%, at $96.78 a barrel. That was its lowest settlement since Feb. 21.
West Texas Intermediate (WTI) crude futures fell $3.76, or 4%, to $90.66, the lowest settlement since Feb. 10. The contract reached a session low of $90.38 a barrel, weakest since Feb. 25.
