Market Roundup
- China July industrial profits rise at slowest pace in 3 months
- China sets yuan midpoint at the highest in over a year
- China's yuan rises to strongest in over a year on firmer guidance
- Trump renews threat to scrap NAFTA going into next round of talks
- Britain pushes for talks about the future, EU wants divorce first
- London should rule out "unthinkable" Brexit no-deal -Scottish govt
- Houston devastated by deadly flooding from Harvey, more rain ahead
Economic Data Ahead
- (0330 ET/0730 GMT) Sweden Jul Retail sales, 0.2% m/m, 3.7% y/y eyed; last 0.2%, 3.5%
- (0400 ET/0800 GMT) Italy Aug Mfg Business confidence, 108.0 eyed, last 107.7
- (0400 ET/0800 GMT) Italy Aug Consumer confidence, 106.9 eyed, last 106.7
- (0400 ET/0800 GMT) EU Jul Money-M3 Annual growth, 4.9% eyed, last 5.0%
Key Events Ahead
- (0500 ET/0900 GMT) Italy E1.5-2.0 bln for 2 year auction
- (0855 ET/1255 GMT) France E2.9-3.3/E0.9-1.3/E0.8-1.2 for 3/6/12 month auctions
- N/A UK DMO 2.5% July ’65 Gilt via HSBC/MS/NatWest/Scotia, expected Sep 4 – for next week
FX Beat
DXY: The dollar declined across the board, as Federal Reserve Chairman Janet Yellen made no reference to U.S. monetary policy in her Jackson Hole speech. The greenback against a basket of currencies traded flat at 92.48, having touched a low of 92.36 earlier, it’s lowest since May 3 2016. FxWirePro's Hourly Dollar Strength Index stood at -71.78 (Highly Bearish) by 0500 GMT.
EUR/USD: The euro steadied after rising to a 2-1/2-year high after the European Central Bank president refrained from talking down the currency. ECB President Mario Draghi at the Jackson Hole conference spoke on global trade but did not highlight upon the euro's recent strength. The European currency traded flat at 1.1923, having touched a high of 1.1959 earlier, its highest since Jan. 2015. FxWirePro's Hourly Euro Strength Index stood at 85.59 (Slightly Bullish) by 0400 GMT. Investors’ attention will remain on the Eurozone M3 Money Supply, ahead of the U.S. goods trade and wholesale inventories data. Immediate resistance is located at 1.959 (Session High), a break above targets 1.2000. On the downside, support is seen at 1.1890 (78.6% retracement 1.1661 and 1.1959), a break below could drag it near 1.1845 (61.8% retracement 1.1661 and 1.1959).
USD/JPY: The dollar declined, extending losses for the second straight session, as markets worried about the impact of Tropical Storm Harvey on the U.S. economy. The major was trading 0.2 percent down at 109.14, having hit a low of 108.60 on Aug.18, its lowest since Apr. 19 2016. FxWirePro's Hourly Yen Strength Index stood at -67.84 (Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. goods trade and wholesale inventories for further momentum. Immediate resistance is located at 109.39 (78.6% retracement of 112.19 and 108.60), a break above targets 109.99 (61.8% retracement of 112.19 and 108.80). On the downside, support is seen at 109.00, a break below could take it near 108.84 (August 24 Low).
GBP/USD: Sterling rallied to a near 2-week high as Federal Reserve Chair Janet Yellen’s silence on monetary policy on Friday undermined the U.S. dollar. The major traded flat at 1.2883, having hit a high of 1.2924 earlier, its highest since August 15. FxWirePro's Hourly Sterling Strength Index stood at -6.70 (Neutral) by 0400 GMT. Investors’ focus will remain on the U.S. fundamental drivers, amid lack of economic data from the UK docket. Immediate resistance is located at 1.2950 (21-DMA), a break above could take it near 1.2918 (21-DMA). On the downside, support is seen at 1.2865 (10-DMA), a break below targets 1.2838 (5-DMA). Against the euro, the pound was trading 0.1 percent down at 92.59 pence, having hit a 10-1/2 month low of 92.70 pence in the prior session.
AUD/USD: The Australian dollar advanced, extending gains from the previous session, with the greenback further deepening losses after a central bank meeting in Jackson Hole, Wyoming. The Aussie trades 0.2 percent up at 0.7944, having hit a high of 0.7954 last week, it’s strongest since Aug. 18. FxWirePro's Hourly Aussie Strength Index stood at 38.76 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7916 (21-DMA), a break below targets 0.7898. On the upside, resistance is located at 0.7960, a break above could take it near 0.7980.
NZD/USD: The New Zealand dollar climbed, extending previous session gains, as the greenback eased while markets worried about the impact of Tropical Storm Harvey on the U.S. economy. The Kiwi trades flat at 0.7238, having touched a low of 0.7191 on Thursday, its lowest level since June 16. FxWirePro's Hourly Kiwi Strength Index was at -116.57 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7271 (78.6% retracement of 0.7472 and 0.7191), a break above could take it near 0.7337 (August 21 Low). On the downside, support is seen at 0.7191 (Aug. 24 Low), a break below could drag it till 0.7126 (June 6 Low).
Equities Recap
Asian shares nudged up, following gains in energy shares across the region, while the euro hit a 2-1/2-year peak after the European Central Bank President refrained from talking down the single currency.
MSCI's broadest index of Asia-Pacific shares outside Japan slightly edged up.
Tokyo's Nikkei eased 0.01 percent to 19,449.90 points, Australia's S&P/ASX 200 index edged down 0.6 percent to 5,709.90 points and South Korea's KOSPI gained 0.4 percent to 2,368.96 points.
Shanghai composite index rose 0.7 percent to 3,355.38 points, while CSI300 index was trading 1.08 percent up at 3,836.95 points.
Hong Kong’s Hang Seng was trading 0.3 percent higher at 27,926.50 points. Taiwan shares added 0.1 percent to 10,525.98 points.
Commodities Recap
Crude oil prices rose after Hurricane Harvey spurred worries along the U.S. Gulf coast over the weekend, taking out numerous refineries and some crude production. International benchmark Brent crude was trading 0.4 percent up at $52.55 per barrel by 0452 GMT, having hit a high of $52.68 last week, its strongest since Aug. 21. U.S. West Texas Intermediate was trading 0.3 percent down at $47.67 a barrel, after rising as high as $48.48 last week, its highest since Aug. 21.
Gold prices rose to its highest in over a week, extending previous session gains after U.S. Federal Reserve Chair Janet Yellen failed to mention of monetary policy in a speech at a central bankers meeting in the United States. Spot gold gained 0.2 percent to $1,294.12 an ounce by 0507 GMT, after reaching its highest since Aug. 18 at $1,294.79 earlier. U.S. gold futures for December delivery were up 0.1 percent to $1,299.50 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.172 percent higher by 0.002 bps, while 5-year yield was 0.005 bps up at 1.763 percent.
The Japanese government bonds slightly gained as investors poured into safe-haven assets after North Korea launched three short-range ballistic missiles from its east coast into the sea, beginning at 5:40 p.m. EST Friday over a period lasting an hour, according to the U.S. Pacific Command. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped 1/2 basis point to 0.01 percent, the yield on long-term 30-year hovered around 0.84 percent and the yield on short-term 2-year traded flat at -0.15 percent.
The Australian bonds lost as investors wait to watch the Reserve Bank of Australia (RBA) Governor Philip Lowe’s speech, scheduled to be held on August 30 amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose nearly 1 basis point to 2.666 percent, the yield on 15-year note hovered around 2.96 percent and the yield on short-term 2-year traded flat at 1.84 percent.
The New Zealand bonds ended Monday’s session on a flat tone as investors remain sidelined in any major trading activity amid lack of economically significant data. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 2.92 percent, the yield on 7-year note remained tad higher at 2.76 percent while the yield on short-term 2-year ended flat at 2.05 percent.
