Market Roundup
•Dollar takes fresh hit, gives gold a fillip
•Oil gives up some gains after output cut
•US Jul Building Permits (MoM) 18.8%, 3.5% previous
•US Jul Building Permits 1.495M, 1.320M forecast, 1.258M previous
•US Jul Housing Starts1.496M, 1.240M forecast, 1.186M previous
•US Jul Housing Starts (MoM) 22.6%,17.3% previous
•US Redbook (MoM) 2.8%,2.5% previous
•US Redbook (YoY) -2.8%, -3.4% previous
•Russia Jul PPI (YoY) -2.2%,-8.3% previous
•Russia Jul PPI (MoM) 4.3%, 6.1% previous
•New Zealand GlobalDairyTrade Price Index -1.7%, -5.1% previous
Looking Ahead – Economic Data (GMT)
•22:45 New Zealand PPI Output (QoQ) (Q2) 0.1% previous
•22:45 New Zealand PPI Input (QoQ) (Q2) -0.3% previous
•23:50 Japan Jun Core Machinery Orders (YoY)
•23:50 Japan Jul Exports (YoY) -21.0%forecast,-26.2% previous
•23:50 Japan Jul Imports (YoY) previous
•23:50 Japan Jul Trade Balance -77.6B forecast, -269.3B previous
•23:50 Japan Jun Core Machinery Orders (MoM) 2.0% forecast, 1.7% previous
•23:50 Japan Adjusted Trade Balance -0.421 previous
•00:50 Japan MI Leading Index (MoM) 0.4% previous
Looking Ahead - Events, Other Releases (GMT)
•No significant events
Currencies Summaries
EUR/USD: The euro strengthened on Tuesday as dollar slid on concern further U.S. fiscal stimulus could face political deadlock. The dollar dipped as a deadlock on further policy stimulus and concerns about escalating tensions between Washington and Beijing cast a shadow over the greenback’s medium-term outlook. The prospects of a weakening dollar and negative inflation-adjusted yields thanks to the Fed’s unprecedented stimulus measures in recent months have dented demand from investors in Japan and Europe in recent months. Immediate resistance can be seen at 1.1929 (23.6% fib), an upside break can trigger rise towards 1.1100 (Psychological level).On the downside, immediate support is seen at 1.1848 (5DMA), a break below could take the pair towards 1.1806 (38.2%fib).
GBP/USD The pound hit 8-month highs versus the dollar on Tuesday, driven by weakness in the U.S. currency, but analysts were cautious about the outlook for sterling as a new round of Brexit talks began. Britain left the EU in January and is in a transition period during which the country remains in the bloc’s single market and customs union. The transition period will finish at the end of 2020 whether or not a trade deal has been reached.At 1900 GMT, the pound was at $1.3239, up 1.09%. As the dollar weakened sterling hit $1.3276, its strongest since the last day of 2019.Immediate resistance can be seen at 1.3283 (Higher BB), an upside break can trigger rise towards 1.3300 (Psychological level).On the downside, immediate support is seen at 1.3200 (23.6%fib), a break below could take the pair towards 1.3092 (5DMA).
USD/CAD: The Canadian dollar strengthened to its highest level in nearly seven months against its U.S.counterpart on Tuesday as the greenback broadly declined and investors weighed reports of who will replace Bill Morneau as Canada's finance minister. Canadian Prime Minister Justin Trudeau will tap Deputy Prime Minister Chrystia Freeland, a former journalist and his most trusted ally, to be his new finance minister after Morneau resigned on Monday, Canadian media reported. Immediate resistance can be seen at 1.3348 (Higher Bollinger Band), an upside break can trigger rise towards 1.3400 (Psychological level).On the downside, immediate support is seen at 1.3240 (5 DMA), a break below could take the pair towards 1.3196 (11 DMA).
USD/JPY: The dollar dipped against the Japanese yen Tuesday as weaker dollar fuelled demand for safe haven yen. The dollar fell to a fresh two-year low against its rivals on Tuesday as a deadlock on further policy stimulus and concerns about escalating tensions between Washington and Beijing weighed on the greenback’s medium-term outlook. Moves were generally cautious ahead of Wednesday’s release of the Federal Reserve minutes, with speculation that the Fed will adopt an average inflation target, which would seek to push inflation above 2% for some time. Strong resistance can be seen at 105.52 (38.2%fib), an upside break can trigger rise towards 105.98(5 DMA).On the downside, immediate support is seen at 105.00 (Psychological level), a break below could take the pair towards 104.58(Lower BB).
Equities Recap.
European shares ended lower on Tuesday, with banking and energy stocks leading the losses on worries about escalating U.S.-China tensions even as a tech-powered rally saw New York’s S&P 500 hit an all-time high.
UK's benchmark FTSE 100 closed down by 0.83 percent, Germany's Dax ended up by 0.30 percent, France’s CAC finished the day down by 0.68 percent.
The S&P 500 climbed to a record on Tuesday, surpassing a level hit in February before the coronavirus crisis and crowning one of the most dramatic recoveries in the index’s history.
Dow Jones closed down by 0.24 percent, S&P 500 ended up by 0.22 percent, Nasdaq finished the day up by 0.73 percent.
Treasuries Recap
U.S. Treasury yields moved a touch lower on Tuesday as the market largely snubbed strong housing data and looked for signs that a political impasse over a new round of aid to bolster the coronavirus-hit economy was easing.
The benchmark 10-year yield was last down less than a basis point at 0.6785%.
Commodities Recap
Gold prices rose on Tuesday as the dollar plunged to two-year lows and the U.S. Treasury yields ticked lower, but the metal slipped below the key $2,000 an ounce mark after the S&P 500 touched record highs.
Spot gold rose 0.7% at $1,999.76 per ounce by 11:34 a.m. EDT (1534 GMT), after hitting a one-week peak of $2,014.97. U.S. gold futures were up 0.4% at $2,006.10.
Oil prices steadied on Tuesday as high compliance with supply cuts from the OPEC+ producer group offset demand fears from the new coronavirus.
Brent crude futures rose 9 cents to settle at $45.46 a barrel. U.S. West Texas Intermediate (WTI) crude futures settled flat at $42.89 a barrel.
