Market Roundup
•Canada Jul Building Permits (MoM) -3.0% , 5.7% previous
• Canada Jul IPPI (YoY) -2.3%,-3.3% previous
• Canada Jul RMPI (YoY) -12.1%,-13.5% previous
• Canada Jul RMPI (MoM) 3.0%,6.9% forecast, 7.5% previous
•French 3-Month BTF Auction -0.568%, -0.568% previous
•French 6-Month BTF Auction -0.579%,-0.606% previous
•French 12-Month BTF Auction -0.567%,-0.578% previous
•US Aug Dallas Fed Mfg Business Index 8.0, -3.0 previous
•Canada Jun Budget Balance -33.58B, -33.58B previous
•Canada Jun Budget Balance (YoY) -86.77B previous
•US 6-Month Bill Auction 0.105% ,0.120% previous
•US 3-Month Bill Auction 0.115%, 0.100% previous
Looking Ahead Economic Data
• 00:30 Japan Aug Manufacturing PMI 46.6 previous
•01:30 Australia Jul Private House Approvals -5.7% previous
•01:30 Australia Jul Building Approvals (MoM) -2.0% forecast,-4.9% previous
•01:30 Australia Net Exports Contribution (Q2) 1.1% forecast,0.5% previous
•01:30 Australia Current Account (Q2) 13.0B forecast, 8.4B previous
Looking Ahead - Economic events and other releases (GMT)
•04:30 Australia Sep RBA Interest Rate Decision 0.25% forecast, 0.25% previous
•04:30 Australia RBA Rate Statement
Fxbeat
EUR/USD: The euro gained on Monday as dollar declined in the wake of the U.S. Federal Reserve’s policy shift on inflation. Investors are adjusting to a speech last Thursday in which Federal Reserve Chair Jerome Powell outlined an accommodative policy change that is believed could result in inflation moving slightly higher and interest rates staying lower for longer. The euro, which makes up the majority of the basket against which the dollar index is weighted, was up 0.35% at $1.195, having gained 1.45% in August, also its fourth straight month of increase .Immediate resistance can be seen at 1.1950 (23.6%fib), an upside break can trigger rise towards 1.2000 (Psychological level).On the downside, immediate support is seen at 1.1884 (Daily low), a break below could take the pair towards 1.1842 (38.2% fib).
GBP/USD: Sterling held near eight-month high on Monday as the dollar fell across the board in the aftermath of a speech by Federal Reserve Chairman Jerome Powell. The pound was last trading up more than 1% at $1.3317, its highest since mid-December. Traders are shying away from taking strong views on the pound, however, with most investors remaining on the sidelines in thin August trading, but things may change this week when many people return from summer holidays. Immediate resistance can be seen at 1.3400 (Psychological level), an upside break can trigger rise towards 1.3526 (Dec 13th 2019 high).On the downside, immediate support is seen at 1.3305 (23.6% fib), a break below could take the pair towards 1.3181 (23.6%fib).
USD/CAD: The Canadian dollar rose on Monday to a near eight-month high against its U.S. counterpart and posted its largest monthly gain since June 2019, as signs of domestic economic recovery and improvement in investor risk appetite supported the currency. The loonie has also benefited from signs of a sharp rebound in Canada’s economy after it was pummeled by the coronavirus crisis. The loonie was trading 0.5% higher at 1.3035 to the greenback, or 76.72 U.S. cents. The currency touched its strongest intraday level since Jan. 8 at 1.3016.For the month, the loonie was up 2.9%. Among G10 currencies, it was bettered only by the Norwegian crown and the Australian dollar. Immediate resistance can be seen at 1.3084 (5DMA), an upside break can trigger rise towards 1.3130 (38.2%fib).On the downside, immediate support is seen at 1.3009 (23.6% fib), a break below could take the pair towards 1.3996 (Jan 6th Low).
USD/JPY: The dollar strengthened against the Japanese yen on Monday as investors bet that Japan’s next leader will stay the course on the ‘Abenomics’ economic revival programme. Chief Cabinet Secretary Yoshihide Suga, a long-time lieutenant of Shinzo Abe is in a favourable position, Japanese media reported, as he is expected to get the backing of important factions within his ruling party. The yen weakened by 0.48% to 105.99 per dollar. The yen climbed to 104.195 on Friday after Shinzo Abe’s resignation as prime minister for health reasons. Strong resistance can be seen at 106.42 (50DMA), an upside break can trigger rise towards 106.86(50% fib).On the downside, immediate support is seen at 105.15 (Lower BB), a break below could take the pair towards 105.00 (Psychological level).
Equities Recap
European shares ended Monday lower, weighed down by weak financial stocks after disappointing German and Italian inflation data, but closed August higher thanks to optimism over new stimulus measures and a COVID-19 vaccine.
UK's benchmark FTSE 100 closed down by 0.61 percent, Germany's Dax ended down by 0.67 percent, France’s CAC finished the day down by 1.11 percent.
The S&P 500 was set to open at a record high on Monday for the sixth straight session, as bets on an economic revival due to prolonged central bank support put it on course for its best August in decades.
Dow Jones closed down by 0.78% percent, S&P 500 closed down by 0.22 % percent, Nasdaq settled up by 0.68% percent.
Treasuries Recap
U.S. Treasury yields on the longer end of the curve fell on Monday with investors scurrying back to the market following last week's run-up in yields in the wake of the Federal Reserve's new policy framework announcement.
The benchmark 10-year yield was last down 3.1 basis points at 0.6982%.The 30-year yield, which on Friday reached 1.577%, its highest level since mid-June, was last down 4.3 basis points at 1.4648%.
Commodities Recap
Gold traded in a narrow $20 range on Monday as it headed for its first monthly decline in five, although a weaker dollar offset pressure from increased appetite for risk. Spot gold edged up 0.1% to $1,966.96 per ounce by 1302 GMT.
Oil prices dropped on Monday, with Brent slipping from a five-month high as global demand remained below pre-COVID levels while U.S. production edged up.
Brent crude futures settled at $45.28 a barrel, down 53 cents, or 1.2%. U.S. West Texas Intermediate crude settled at $42.61 a barrel, down 36 cents, or 0.8%.
