Market Roundup
• Trade truce unlikely before 2020 U.S. election: Goldman
• U.S.-China trade war stokes concerns over global growth
• Traders look to U.S. inventory data
• US Redbook (MoM) 1.1% ,- 1.0% previous
• US Redbook (YoY) 5.1% , 4.5% previous
• Russia CPI YoY 4.6, 4.6 forecast, 4.7 previous
• Russia CPI MoM 4.6, 4.6 forecast, 4.7 previous
• US Jul JOLTs Job Openings -7.348M, 7.450M forecast, 7.384M previous
• Brazil Jul Auto Production (MoM) 14.2%,-15.5% previous
• Brazil Jul Auto Sales (MoM) 9.1%,-9.1% previous
• New Zealand GlobalDairyTrade Price Index -2.6%,2.7% previous
Looking Ahead - Economic Data (GMT)
• 22:00 Australia Jul AIG Construction Index 43% previous
• 23:50 Japan Jul Foreign Reserves (USD) 1,322.3B previous
• 01:30 Australia Jun Home Loans (MoM) 0.6% previous, 0.0% previous
• 02:00 New Zealand RBNZ Interest Rate Decision1.25% forecast, 1.50 % previous
Looking Ahead - Events, Other Releases (GMT)
• 02:00 RBNZ Monetary Policy Statement
• 03:00 RBNZ Press Conference
Currency Summaries
EUR/USD: The euro was little changed against the U.S. dollar on Tuesday, as rising concern about a global trade war between United States and China kept investors cautious. A year-long U.S.-China trade war boiled over on Monday as Washington accused Beijing of manipulating its currency after China let the yuan drop to its lowest point in more than a decade.The latest developments have exacerbated concern about the global economic outlook and reinforced expectations for rate cuts and further stimulus measures from major central banks. The euro was down 0.06 percent at $1.1196. An index that tracks the dollar versus a basket of six major currencies was up 0.26 at 97.65. Immediate resistance can be seen at 1.1238 (50 DMA), an upside break can trigger rise towards 1.1303 (Higher Bollinger Band).On the downside, immediate support is seen at 1.1185 (21 DMA), a break below could take the pair towards 1.1138 (9 DMA).
The British pound rebounded against dollar on Tuesday to hold above recent lows, although it remained vulnerable as traders still worry that Britain is headed for a no-deal Brexit. Sterling hit a new, almost two-year low against the euro overnight, with the losses largely down to strength in the single currency rather than more Brexit-related worries.The Guardian newspaper reported late on Monday that Brussels diplomats, briefed after a meeting with British Prime Minister Boris Johnson’s chief European envoy, said it was clear Johnson had no intention of renegotiating the withdrawal agreement. But markets believe the risk of a no-deal Brexit in October has surged in recent weeks under Johnson, and such fears have hammered the pound to its lowest in more than two years. Immediate resistance can be seen at 1.2205 (9 DMA), an upside break can trigger rise towards Sterling rose 0.19% against the dollar to $1.2162 , away from the 31-month low of $1.2080 hit last week 1.2261 (11 DMA).On the downside, immediate support is seen at 1.2067 (Lower Bollinger Band), a break below could take the pair towards 1.2000 (Psychological level).
USD/CAD:The Canadian dollar hovered near a six-week low against dollar on Friday, as investors worried about rising trade tensions between the United States and China. A yearlong U.S.-China trade war has boiled over as Washington accused Beijing of manipulating its currency after China let the yuan drop to its lowest point in more than a decade. Meanwhile, the price of oil rebounded slightly on Tuesday from big falls in recent sessions amid escalating trade tensions. U.S. crude oil futures CLc1 were up 0.4% at $54.88 a barrel. At (1951 GMT), the Canadian dollar was trading down 0.55% at 1.3274 to the greenback. The currency traded in a range of 1.3188 to 1.3289. Immediate resistance can be seen at 1.3294 (Higher Bollinger Band), an upside break can trigger rise towards 1.3314 (Ichimoku Cloud Top).On the downside, immediate support is seen at 1.3187 (9 DMA), a break below could take the pair towards 1.3100 (Psychological level).
USD/JPY: The dollar gained against the Japanese yen on Tuesday, after Washington labelled Beijing a currency manipulator, marking a sharp escalation in the year-long trade dispute between the two economies. However, gains were capped as rising tensions between the United States and China threatened global economic growth. The trade war between the world’s top economies remained close to boiling point, but the heat was reduced enough to steady some nerves when China’s central bank fixed the yuan at a slightly stronger rate .That decision from Beijing, together with Chinese state media saying on Monday local companies suspended their purchases of American agricultural goods, touched off a massive sell-off in stock markets around the world.The dollar was 0.50 percent higher versus the Japanese yen at 106.51. Strong resistance can be seen at 107.08 (Daily High), an upside break can trigger rise towards 107.99 (Ichimoku Cloud Bottom).On the downside, immediate support is seen at 108.33 (23.6 % retracement level), a break below could take the pair towards 112.97 (Ichimoku Cloud Top).
Equities Recap
European shares finished lower on Tuesday weighed down by trade worries as support from upbeat German data and China stepping in to stabilize its currency proved to be temporary.
The UK's benchmark FTSE 100 closed down by 0.07 percent, FTSEurofirst 300 ended the day down by 0.26 percent, Germany's Dax ended down by 0.49 percent, and France’s CAC finished the down by 0.18 percent.
U.S. stocks bounced back on Tuesday, led by gains in technology shares, as China stepped in to stabilize the yuan, a day after Wall Street’s main indexes racked up their steepest one-day percentage fall of the year.
Dow Jones closed up by 1.21 percent, S&P 500 ended up 1.30 percent, Nasdaq finished the day up by 1.39 percent.
Treasuries Recap
U.S. Treasury yields edged higher on Tuesday, as traders trimmed their bond holdings in advance of a $38 billion auction of three-year notes, the first leg of this week's $84 billion quarterly refunding.
The benchmark 10-year yields were up 1.7 basis points at 1.753%. The yields on other Treasuries maturities also rebounded from their recent lows. The two-year yield, which is sensitive to traders' view on Fed policy, was up 2 basis points at 1.603% after hitting 1.529%, which was its lowest level since October 2017.
Gold prices strengthened on Tuesday, consolidating near the highest in more than six years as an intensifying U.S.-China trade war threatened global economic growth.
Spot gold rose 0.5% to $1,470.96 an ounce as of 2:08 p.m. EDT (1808 GMT), after hitting $1,474.81, the highest since May 2013. The previous session, gold jumped as much as 2%.U.S. gold futures settled up 0.52% at $1,484.20.
Oil prices fell slightly on Tuesday, with Brent crude remaining near seven-month lows just below $60 a barrel because of increasing trade tensions between China and the United States.
International benchmark Brent futures fell 58 cents to $59.23 a barrel by 2:25 p.m. EDT [1825 GMT], having dipped earlier in the session to their lowest since Jan. 14 at $59.07. West Texas Intermediate crude futures were down 78 cents a barrel at $53.92.
