Market Roundup
• US household debt $12.84 trln in Q2, up $552 bln from year ago - NY Fed.
• US Retail Sales MM Jul 0.6%, 0.4% forecast, 0.3% previous.
• US NY Fed Manufacturing Aug 25.20, 10.00 forecast, 9.80 previous.
• US Import Prices MM Jul 0.1%, 0.1% forecast, -0.2% previous.
• US Export Prices MM Jul 0.4%, 0.2% forecast, -0.2% previous.
• US Business Inventories MM Jun 0.5%, 0.4% forecast, 0.3% previous.
• US Retail Invty Ex Auto (R) Jun 0.5%, 0.5% previous.
• US NAHB Housing Market Idx Aug 68, 65 forecast, 64 previous.
• US economy seen growing 3.7% in Q3 vs 3.5% estimate Aug 9 - Atlanta Fed.
• US House tax chairman confident on reform, others less so.
• N. Korea delays Guam missile firing, US says dialogue up to Kim.
• US sanctions hit Russian hopes of a "Trump bump" for investment.
• Trump hits back at CEOs over the response to Virginia violence.
• Germany’s Schaeuble: ECB is not violating laws on monetary policy.
• UK inflation steady in July may be nearing peak.
• IMF: China 2018-2020 average annual growth forecast raised to 6.4% vs 6.0%.
• IMF: Downward pressure on Yuan has eased on strong economic growth, capital controls.
• Brazil's Goldfajn: Economy has stabilized and looks set for a gradual recovery.
Looking Ahead - Economic Data (GMT)
• 01:30 Australia Wage Price Index QQ Q2 0.5% forecast, 0.5% previous
• 01:30 Australia Wage Price Index YY Q2 1.9% forecast, 1.9% previous
Looking Ahead - Events, Other Releases (GMT)
• 18:00 Fed will release the minutes from its July FOMC meeting – Washington
Currency Summaries
EUR/USD is likely to find support at 1.1680 levels and currently trading at 1.1731 levels. The pair has made session high at 1.1740 and hit lows at 1.1688 levels. The euro declined against the dollar on Tuesday as the dollar gained strength after U.S. retail sales data showed the largest gain in seven months. Gains were also supported by news that North Korean leader Kim Jong Un had delayed a decision on firing missiles toward the U.S. Pacific territory of Guam. That was taken by markets as another sign the threats were rhetorical. U.S. retail sales recorded their biggest increase in seven months in July as consumers boosted purchases of motor vehicles as well as discretionary spending, suggesting the economy continued to gain momentum early in the third quarter. The Commerce Department said on Tuesday that retail sales jumped 0.6 percent last month. That was the largest gain since December 2016 and followed June's upwardly revised 0.3 percent rise. Also weighing on euro was the prospect of another increase in U.S. interest rates after an influential Federal Reserve official said on Monday he expected one more rise this year. Investors await minutes from the Fed's July meeting to be released on Wednesday for clues on when a rate hike is next likely.
GBP/USD is supported in the range of 1.2837 levels and currently trading at 1.2864 levels. It reached session high at 1.2871 and dropped to session low at 1.2837 levels. Sterling declined against the dollar on Tuesday as weak inflation data and concerns about protracted negotiations with euro zone authorities prompted investors to pile negative bets against the British currency. The pound fell 0.73 percent against the dollar at 1.2869, its lowest level since July 12th, 2017 on growing concerns that a struggling economy would force the central bank to stick to a dovish policy stance in the coming months. British consumer price inflation unexpectedly held steady last month, bucking market expectations for a renewed rise, after fuel prices fell and the effect of the pound's tumble after last year's Brexit vote started to fade. The pound reached $1.3267 per dollar on Aug. 3 on a brief surge in expectations that the Bank of England could raise interest rates over the next year. But the Bank's latest meeting and minutes quashed much of that talk in the market and a retreat in pricing on rates has weakened the pound since. Sterling has fallen nearly 3 percent since then.
USD/CAD is supported at 1.2712 levels and is trading at 1.2757 levels. It has made session high at 1.2703 and lows at 1.2653 levels. The Canadian dollar declined against its U.S. counterpart on Tuesday as loonie was pressured by lower oil prices and broader gains for the greenback, as North Korea tensions eased and data showed a jump in U.S. retail sales. The U.S. dollar climbed against a basket of major currencies after North Korea's leader delayed a decision on firing missiles towards Guam. Also aiding the greenback, U.S. retail sales recorded their biggest increase in seven months in July. Oil prices extended a heavy sell-off, weighed down by a stronger U.S. dollar and signs of weaker demand in China. On the data front, re-sales of Canadian homes fell 2.1 percent in July from June, the fourth straight monthly decline, as the cooling down of the Toronto housing market continued, the Canadian Real Estate Association said. The Canadian dollar was trading at C$1.2758 to the greenback, or 78.38 U.S. cents, down 0.3 percent. The currency's strongest level of the session was C$1.2720, while it touched its weakest since July 12 at C$1.2778.
USD/JPY is supported around 110.05 levels and currently trading at 110.52 levels. It peaked to hit session high at 110.83 and made session lows at 110.40 levels. The U.S. dollar strengthened against the Japanese yen on Tuesday as U.S. dollar climbed after solid U.S. retail data and as North Korea delayed a plan to fire missiles at Guam. Data for July showed the biggest increase in U.S. retail sales in seven months as consumers ramped up discretionary spending and boosted purchases of motor vehicles, suggesting the economy continued to gain momentum. North Korean leader Kim Jong Un said he would watch the United States' actions for a while longer before deciding whether to fire missiles towards the U.S. island territory of Guam, the nation's official news agency said. The dollar rose by more than 1 percent against the Japanese yen, touching its highest in more than a week and on pace for its largest daily rise against the yen since July 3. The dollar index was last up 0.45 percent at 93.848. It earlier touched its highest level since July 26.
Equities Recap
European shares rose modestly on Tuesday, recovering further as geopolitical tensions eased in holiday-thinned trading, with airlines supporting gains after Air Berlin filed for insolvency, prompting a rush from Lufthansa and peers to snap up its assets.
The UK's benchmark FTSE 100 closed up by 0.4 percent, FTSEurofirst 300 ended the day up by 0.09 percent, Germany's Dax ended up 0.1, and France’s CAC finished the day up by 0.4 percent.
U.S. stocks were flat on Tuesday as declines in Home Depot and other retailers following results offset upbeat U.S. retail sales data.
Dow Jones closed up by 0.04 percent, S&P 500 ended down 0.05 percent, Nasdaq finished the day down by 0.12 percent.
Treasuries Recap
U.S. benchmark Treasury yields rose to one-week highs on Tuesday as investors pared low-risk bond holdings on signs of easing U.S.-North Korean tensions and on strong domestic retail sales and regional factory activity data.
Benchmark U.S. 10-year Treasuries fell 12/32 in price to yield 2.26 percent, up from 2.2 percent on Monday.
Commodities Recap
Gold fell nearly 1 percent, down for a second day on Tuesday after better-than-expected U.S. economic data and easing tensions over North Korea encouraged investors to buy riskier assets, boosting stocks, the U.S. dollar and bond yields.
Spot gold was down 0.8 percent at $1,271.58 an ounce by 3:07 p.m. EDT (1907 GMT), taking losses since Friday's high to nearly 2 percent. U.S. gold futures 1 for December delivery fell 0.8 percent to settle at $1,279.70.
Oil prices settled little changed on Tuesday after slumping to three-week lows as the U.S. dollar climbed and signs of weaker petroleum demand in China weighed the market down for a second day.
Benchmark Brent crude settled up 7 cents a barrel at $50.80, after retreating to $50.02 during the session. U.S. light crude settled down 4 cents at $47.55, off a session low of $47.02, the lowest since July 25.
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