Market Roundup
• US Jul ADP Nonfarm Employment Change 167K, 1,500K forecast, 4,314K previous
• US Imports 208.95B, 199.49B previous
• US Exports 158.25B, 144.69B previous
• Canada Jun Exports 39.71B, 38.80B forecast, 33.90B previous
• US Jun Trade Balance -50.70B, -50.10B forecast, -54.80B previous
• US Jun Trade Balance -3.19B, -0.90B forecast, -1.33B
• US Jul Services PMI 50.0, 49.6 forecast, 47.9 previous
• US Jul Markit Composite PMI 50.0,50.3, 50.0, 47.9 previous
• US ISM Non-Manufacturing Business Activity 67.2, 60.0 forecast, 66.0 previous
• US Jul ISM Non-Manufacturing PMI 58.1, 55.0 forecast, 57.1 previous
• US Jul ISM Non-Manufacturing Employment 42.1, 43.1 previous
• US Jul ISM Non-Manufacturing Prices 67.7, 62.4 previous)
•US Jul ISM Non-Manufacturing New Orders 67.7, 61.6 previous
• US Crude Oil Inventories -7.373M,-3.001M forecast, -10.612M previous
• US Cushing Crude Oil Inventories 0.532M,1.309M previous
Looking ahead Economic Data (GMT)
• 22:45 New Zealand Labor Cost Index (QoQ) (Q2) 0.3% forecast, 0.3% previous
• 22:45 New Zealand Labor Cost Index (YoY) (Q2) 1.9% forecast, 2.4% previous
• 23:50 Japan Foreign Bonds Buying -565.0B previous
• 23:50 Japan Foreign Investments in Japanese Stocks 70.6B previous
• 03:00 New Zealand Labor Inflation Expectations (QoQ) 1.2% previous
Looking ahead other events and schedules (GMT)
• No significant events
Currencies Summaries
EUR/USD: The euro strengthened against dollar on Wednesday after economic data pointed to a return to growth in the bloc, while investors remained broadly cautious as they waited for Washington to agree on a fiscal plan for the United States.Euro zone business activity returned to growth in July, with Wednesday’s final Composite Purchasing Manager’s Index (PMI) at 54.9 in July, compared to June’s 48.5 and the flash estimate of 54.8.European retail sales rebounded to pre-pandemic levels, with online shopping falling for the first time this year in June as consumers returned to physical stores. Immediate resistance can be seen at 1.1922 (23.6% fib), an upside break can trigger rise towards 1.2000 (Psychological level).On the downside, immediate support is seen at 1.1801 (38.2 %fib), a break below could take the pair towards 1.1774 (9 DMA).
GBP/USD: Sterling edged 0.6% higher on Wednesday against a broadly weaker dollar as the U.S. coronavirus relief package stalled in Congress and U.S. bond yields sank. Sterling climbed back toward pre-pandemic highs and was advancing towards a five-month peak hit last week versus the greenback. The British currency rose as much as 0.6% against the dollar to $1.3150 by 1436 GMT and was down 0.1% against the euro at 90.40 pence. Sterling has had a strong recovery against the dollar in the past few weeks.. Immediate resistance can be seen at 1.3293 (Dec 31st high), an upside break can trigger rise towards 1.3174 (23.6%fib).On the downside, immediate support is seen at 1.3101 (5DMA), a break below could take the pair towards 1.2962 (38.2%fib).
USD/CAD: The Canadian dollar climbed to its highest in more than five months against its broadly weaker U.S. counterpart on Wednesday as oil prices rose, but some gains for the loonie were given back after domestic data showing a wider trade deficit.The loonie was trading 0.3% higher at 1.3280 to the greenback. The currency touched its strongest intraday level since Feb. 21 at 1.3230. Immediate resistance can be seen at 1.3333(Daily high), an upside break can trigger rise towards 1.3382 (38.2%fib).On the downside, immediate support is seen at 1.3218 (23.6%fib), a break below could take the pair towards 1.3053 (22nd Jan low).
USD/JPY: The dollar declined against the Japanese yen on Wednesday as investors are worried the U.S. response to the coronavirus pandemic is dealing a body blow to the dollar. Concerns that the U.S. economy is stalling amid a surge in coronavirus cases has increased calls for more fiscal aid, a move investors have welcomed.But after more than a week of talks and few signs of progress, top Democrats in Congress and White House officials were said to be aiming for a deal to be passed next week. Strong resistance can be seen at 105.88 (Daily high), an upside break can trigger rise towards 106.06 (38.2% fib).On the downside, immediate support is seen at 105.06 (38.2% fib), a break below could take the pair towards 104.16 (July 31st low).
Equities Recap
Positive earnings reports and a surge in commodities shares lifted European stock markets on Wednesday, but losses in defensive sectors and worries about surging coronavirus cases globally tempered the mood.
UK's benchmark FTSE 100 closed up by 1.14 percent, Germany's Dax ended up by 0.47 percent, France’s CAC finished the day up by 0.90 percent.
U.S. stocks climbed on Wednesday on the heels of a surprise quarterly profit from Disney and as investors stayed optimistic that a deal was near for a U.S. coronavirus fiscal aid package.
Dow Jones closed up by 1.39% percent, S&P 500 closed up by 0.64% percent, Nasdaq settled upby 0.52% percent.
Treasuries Recap
The U.S. government bond yield curve steepened on Wednesday as prices fell on the prospect of increased supply in longer-dated debt after the Treasury Department said it would borrow more in the third quarter than previously anticipated.
The benchmark 10-year yield was last up 3.6 basis points at 0.549% and the 30-year yield was up 3.8 basis points at 1.299%. The short end of the curve was roughly flat, with the two-year yield 0.1 basis point higher at 0.121%.
Commodities Recap
Gold pushed further past $2,000 an ounce on Wednesday in the face of a weak dollar and expectations of more stimulus measures for the pandemic-ravaged global economy, while stocks in Europe and on Wall Street rallied on encouraging corporate earnings.
Spot gold prices rose 1.1% to $2,039.59 an ounce, after earlier reaching a record $2,055.10. U.S. gold futures hit a record $2,070.30 and settled up 1.4% at $2,049.30.
Oil prices rose on Wednesday after inventory data showed a big drop in U.S. crude stocks although gains were capped by concerns over fuel demand with mounting global COVID-19 cases.
Brent crude was up by 31 cents, or 0.7%, at $44.74 a barrel by 0713 GMT. The contract rose 0.6% on Tuesday to its highest close since March 6.
