Market Roundup
- PM Abe advisor Hamada favors reappointment of BOJ Gov Kuroda – Nikkei
- BOJ minutes – Most agreed need to remain easy
- 2% inflation target still distant, some noted importance of explaining exit
- China's second-half GDP growth seen at around 6.7 pct - official think
- Boris Johnson plays down Conservative rift, NZ near top of trade deal queue
- EZ recovery promising but ECB accommodation still needed: Mersch
- Trump son-in-law details Russia contacts, denies collusion
Economic Data Ahead
- (0200 ET/0600 GMT) Germany Jun Import Prices, -0.70% m/m/, 2.90% y/y eyed; last -1.0%, 4.10%
- (0245 ET/0645 GMT) France Jul Business Climate, 108.00 eyed, last 108.00
- (0400 ET/0800 GMT) Germany Jul Ifo Business Climate, 114.90 eyed, last 115.10
- (0400 ET/0800 GMT) Germany Jul Ifo Expectations, 106.50 eyed, last 106.80
Key Events Ahead
- (0530 ET/0930 GMT) UK 30Y 2.50 bln auction
- (1300 ET/1700 GMT) BOE's Andy Haldane speaks at The Finance Foundation Annual Lecture
- N/A U.S. Federal Open Market Committee starts its two-day meeting
FX Beat
DXY: The dollar consolidated near recent lows versus its major peers as investors awaited this week's Federal Reserve meeting for clues on the timing of its next policy tightening. The greenback against a basket of currencies traded 0.1 percent down at 93.93, having touched a low of 93.82 the prior day, it’s lowest since Jun. 24. FxWirePro's Hourly Dollar Strength Index stood at -121.38 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro rose after easing from a 2-year peak touched in the previous session on the back of better-than-expected Markit's preliminary surveys of U.S. manufacturing and services. The European currency traded 0.2 percent up at 1.1659, having touched a high of 1.1684 on Monday, its highest since Aug 20, 2015. FxWirePro's Hourly Euro Strength Index stood at 96.52 (Slightly Bullish) by 0400 GMT. Investors’ attention will remain on series of data from the Eurozone, ahead of U.S. housing price index. Immediate resistance is located at 1.1700, a break above targets 1.1730. On the downside, support is seen at 1.1618 (78.6% retracement 1.1371 and 1.1684), a break below could drag it near 1.1565 (61.8% retrace).
USD/JPY: The dollar slumped, extending losses for the sixth consecutive session on increasing worries that persistent political disorder would create obstacles to U.S. President Donald Trump's stimulus and tax reform agenda. The major traded 0.1 percent down at 111.01, having hit a low of 110.62 the day before, its lowest since Jun 15. FxWirePro's Hourly Yen Strength Index stood at 8.15 (Neutral) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. housing price index for further momentum. Immediate resistance is located at 111.47 (78.6% retracement of 114.49 and 110.62), a break above targets 112.11 (61.8% retracement of 114.49 and 110.62). On the downside, support is seen at 110.48 (May 31 Low), a break below could take it near 110.23 (May 18 Low).
GBP/USD: Sterling steadied after rising to a 1-week high in the previous session as ministers talked up a transitional deal to smooth Britain's exit from the European Union. Additionally, growing expectations that the Bank of England would raise interest rates in the coming months also supported the upside in the major. Sterling traded flat at 1.3028, having hit a high of 1.3057 on Monday, its highest since Jul. 18. FxWirePro's Hourly Sterling Strength Index stood at -14.74 (Neutral) by 0400 GMT. Investors’ focus will remain on the developments surrounding the Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3053 (July 19 High), a break above could take it near 1.3100. On the downside, support is seen at 1.2988 (10-DMA), a break below targets 1.2932 (July 20 Low). Against the euro, the pound traded 0.2 percent down at 89.51 pence, having hit an 8-month low of 89.94 last week.
AUD/USD: The Australian dollar rose, extending gains for the second straight session as the greenback continued to weaken across the board. Investors’ attention will remain on the domestic second quarter inflation data due tomorrow for further insight on the strength of the economy. The Aussie trades 0.2 percent lower at 0.7937, having hit a high of 0.7987 on Thursday, it’s highest since May 19, 2015. FxWirePro's Hourly Aussie Strength Index stood at -3.16 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7900 (76.6% retracement of 0.7571 and 0.7987), a break below targets 0.7829 (61.8% retrace). On the upside, resistance is located at 0.7959, a break above could take it near 0.8000.
NZD/USD: The New Zealand dollar reversed sharply from session lows as higher oil prices and renewed U.S. dollar selling boosted the bid tone around the major. The Kiwi trades 0.04 percent up at 0.7440, having touched a high of 0.7458 on Friday, its highest level since Sept. 8. FxWirePro's Hourly Kiwi Strength Index was at 70.92 (Slightly Bullish) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of New Zealand's trade balance report due in the week. Immediate resistance is located at 0.7485 (Sept 7 High), a break above could take it near 0.7500. On the downside, support is seen at 0.7404 (78.6% retracement of 0.7201 and 0.7458), a break below could drag it till 0.7346 (10-DMA).
Equities Recap
Asian shares traded within a narrow range, while the greenback held above a 13-month low after readings on U.S. factory and services activity beat forecasts ahead of the start of a Federal Reserve meeting later in the day.
MSCI's broadest index of Asia-Pacific shares outside Japan was little changed.
Tokyo's Nikkei declined 0.03 percent to 19,970.00 points, Australia's S&P/ASX 200 index rose 0.9 percent to 5,737.70 points and South Korea's KOSPI declined 0.1 percent to 2,448.49 points.
Shanghai composite index fell 0.06 percent to 3,248.88 points, while CSI300 index was trading 0.2 percent down at 3,734.10 points.
Hong Kong’s Hang Seng was trading 0.01 percent lower at 26,843.53 points. Taiwan shares added 0.08 percent to 10,469.17 points.
Commodities Recap
Crude oil prices rose, extending previous session gains after Saudi Arabia pledged to curb exports from next month and OPEC called on several members to boost compliance with production cuts to help rein in global oversupply. International benchmark Brent crude was trading 0.3 percent up at $48.83 per barrel by 0429 GMT, having hit a high of $50.16 on Thursday, its strongest since Jun. 7. U.S. West Texas Intermediate traded 0.3 percent up at $46.58 a barrel, after rising as high as $47.71 on Thursday, its strongest since Jun 7.
Gold prices inched higher after easing from a one-month high touched in the previous session as the dollar firmed ahead of a U.S. Federal Reserve monetary policy meeting. Spot gold rose 0.1 percent to $1,255.70 per ounce at 0432 GMT, having hit a high of $1,258.76 an ounce on Monday, it highest since June 15. U.S. gold futures for August delivery fell 0.1 percent to $1,253.30 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.241 percent higher by 0.009 bps, while 5-year yield was 0.008 up at 1.808 percent.
The Japanese government bonds remained almost unnerved even after the Bank of Japan (BoJ) released its July monetary policy meeting minutes. The minutes confirmed that the central bank’s targeted 2 percent inflation seems quite far till now and seemed to clap along its policy decision to hold back the timing for the achievement of its inflation goal. The benchmark 10-year bond yield traded flat at 0.07 percent, the long-term 30-year bond yields also hovered around 0.87 percent and the yield on the short-term 2-year note remained tad higher at -0.11 percent.
The Australian bonds traded slightly on the downside as investors wait to watch the country’s consumer price-led inflation index (CPI) for the second-quarter of this year, scheduled to be released on July 26. The yield on the benchmark 10-year Treasury note rose nearly 1 basis point to 2.70 percent, the yield on 15-year note remained tad higher by 1/2 basis point at 2.99 percent and the yield on short-term 2-year traded nearly flat at 1.85 percent.
The Canadian government bond prices were lower across the maturity curve, with the two-year price down 5.5 Canadian cents to yield 1.278 percent and the benchmark 10-year falling 34 Canadian cents to yield 1.925 percent.
