Market Roundup
- China Q2 GDP growth at 6.9% y/y, unchanged from Q1
- Factory output grew 7.6% in Jun from a year earlier
- Jun retail sales rose 11.0% vs forecast of 10.6%
- China Q2 property investment +8.2% y/y vs +9.1% in Q1
- New Zealand CPI seen rising 1.9% y/y in Q2, was 2.2 pct in Q1
- New Zealand services index s/adj dipped to 58.6 in Jun vs. 58.8 in May
- Australia moves to dial down financial stability risks in home loans
- Round 1: Brexit talks start in Brussels with 20 months to go
- UK house prices stabilize, but buyers still wary -Rightmove
- S. Korea's new govt proposes military talks with No. Korea
- Speculators trim net long U.S. dollar bets, up yen short bets: CFTC
Economic Data Ahead
- (0500 ET/0900 GMT) Eurozone Jun Inflation Final, 0.0% m/m, 1.30% y/y eyed; last -0.10%, 1.30%
- (0500 ET/0900 GMT) Eurozone Jun Infl Ex Food & Energy, 0.20% m/m, 1.10% y/y eyed; last 0.0%, 1.0%
- (0830 ET/1230 GMT) United States Jul NY Fed Manufacturing, 15.00 eyed, last 19.80
Key Events Ahead
- N/A EU foreign affairs council meeting in Brussels
FX Beat
DXY: The dollar rebounded from multi-week lows versus its major peers following a rise in the U.S. Treasury yields. The greenback against a basket of currencies traded 0.1 percent up at 95.21, having touched a low of 95.07 earlier, it’s lowest since Sept. 22 FxWirePro's Hourly Dollar Strength Index stood at -127.00 (Highly Bearish) by 0500 GMT.
EUR/USD: The euro eased as Friday’s ECB headlines, citing that the central bank remains wary of putting an end-date in its QE asset purchases program, continued to hurt the sentiment around the major. The European currency traded down at 1.1461, having touched a high of 1.1489 on Wednesday, its highest since May 5, 2016. FxWirePro's Hourly Euro Strength Index stood at -19.40 (Neutral) by 0400 GMT. Investors’ attention will remain on Eurozone final CPI figures ahead of the Empire State manufacturing index. Immediate resistance is located at 1.1500, a break above targets 1.1530. On the downside, support is seen at 1.1428 (Previous Session Low), a break below could drag it near 1.1402 (10-DMA).
USD/JPY: The dollar rebounded from a 2-week low after upbeat Chinese data renewed risk-on wave across the global markets. The Chinese economic data surpassed forecasts with second-quarter gross domestic product rising 6.9 percent on the year, while strength in the retail sale and industrial output helped offset a weak start for Shanghai stocks. The major traded 0.1 percent up at 112.62, having hit a high of 114.49 last week, its highest since March 15. FxWirePro's Hourly Yen Strength Index stood at 64.24 (Bullish) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of the Empire State manufacturing index for further clues on the par. Immediate resistance is located at 113.00, a break above targets 113.39 (10-DMA). On the downside, support is seen at 112.26 (Previous Session Low), a break below could take it near 112.00.
GBP/USD: Sterling slightly edged down after rising to a 10-months peak in the prior session on weaker-than-expected U.S. economic data, which undermined expectations for more hikes in Fed interest rates. The major traded 0.1 percent down at 1.3092, having hit a high of 1.3113 on Friday, its highest since Sept. 22. FxWirePro's Hourly Sterling Strength Index stood at 116.02 (Highly Bullish) by 0400 GMT. Investors’ focus will remain on the U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.3120 (Sept. 22 High), a break above could take it near 1.3200. On the downside, support is seen at 1.3052 (78.6% retrace of 1.2816 and 1.3113), a break below targets 1.3001 (61.8% retrace). Against the euro, the pound traded down at 87.53 pence, having hit a 3-week high of 87.42 on Friday.
AUD/USD: The Australian dollar eased after rising to a 2-year high in the previous session on diminishing worries of aggressive policy tightening in the United States. The pair struggled to extend gains despite upbeat Chinese data, which showed China’s Apr to June GDP at 6.9 percent, beating the estimate of 6.8 percent. The Aussie trades 0.1 percent down at 0.7814, having hit a high of 0.7834 on Friday, it’s highest since Jun. 18, 2015. FxWirePro's Hourly Aussie Strength Index stood at 105.00 (Highly Bullish) by 0500 GMT. Investors will continue to track broad based market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7776 (78.6% retracement of 0.7571 and 0.7834), a break below targets 0.7733 (61.8% retrace). On the upside, resistance is located at 0.7850, a break above could take it near 0.7880.
NZD/USD: The New Zealand dollar declined, halting a 3-day winning streak ahead of domestic second-quarter inflation data due on Tuesday. The economy's consumer prices are likely to rise 0.2 percent from the January-March period, while the annual pace is expected to slow to 1.9 percent, which might support the central bank's stance to keep interest rates at record lows in near term. The Kiwi trades 0.2 percent down at 0.7331, having touched a high of 0.7368 last week, its highest level since Feb. 2. FxWirePro's Hourly Kiwi Strength Index was at 28.30 (Neutral) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7346 (June 30 High), a break above could take it near 0.7370. On the downside, support is seen at 0.7300, a break below could drag it lower 0.7291 (June 30 Low).
Equities Recap
Asian shares rallied to a fresh two-year high, strengthened by stronger-than-expected economic growth in China and speculations that downbeat U.S. data will keep the Federal Reserve cautious about the pace of further policy tightening.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent.
Tokyo's Nikkei edged up 0.1 percent to 20,118.86 points, Australia's S&P/ASX 200 index eased 0.03 percent to 5,763.50 points and South Korea's KOSPI advanced 0.3 percent to 2,422.81 points.
Shanghai composite index lost 0.7 percent to 3,200.85 points, while CSI300 index was trading 0.3 percent down at 3,690.53 points.
Hong Kong’s Hang Seng was trading 0.5 percent higher at 26,538.59 points. Taiwan shares added 0.1 percent to 10,457.54 points.
Commodities Recap
Crude oil prices rose to an 11-day high, strengthened by a slowdown in the growth of rigs in the United States and strong refinery demand from China. International benchmark Brent crude was trading 0.1 percent up at $49.08 per barrel by 0429 GMT, having hit a high of $49.08, its strongest since Jul. 6. U.S. West Texas Intermediate traded 0.02 percent up at $46.65 a barrel, after rising as high as $46.70, its strongest since Jul 5.
Gold prices rose, extending previous session gains after data pointed to weak U.S. inflation, reaffirming doubts that the U.S. central bank would again hike interest rates this year. Spot gold gained 0.1 percent at $1,230.40 per ounce by 0435 GMT, having hit $1,232.74, its highest since July 3. U.S. gold futures for August delivery futures settled up 0.84 percent, at $1,227.50 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.331 percent higher by 0.013 bps, while 5-year yield was 0.007 up at 1.867 percent.
The Australian bonds traded flat as investors remained muted in a silent trading session ahead of the Reserve Bank of Australia’s (RBA) July monetary policy meeting minutes, scheduled to be released on July 18. The yield on the benchmark 10-year Treasury hovered around 2.73 percent, the yield on 15-year note remained tad higher at 3.03 percent while the yield on short-term 2-year traded flat at 1.84 percent.
The New Zealand bonds ended narrowly mixed at the start of the trading week Monday as investors are awaiting to read the country’s consumer price-led inflation for the second-quarter of this year, scheduled to be released on July 18. At the time of closing, the yield on the benchmark 10-year bond rose 1/2 basis point to 2.99 percent, the yield on 7-year note also hovered around 2.87 percent while the yield on short-term 2-year note ended 2 basis points lower at 1.98 percent.
