Market Roundup
- Parliament vote to reveal extent of anger over May's Brexit plan
- Trump and Putin to hold first summit talks as twitchy West looks on
- On eve of Russia summit, Trump calls European Union 'a foe'
- China looks to get cozy with EU in annual talks as Trump tariffs bite
- EU's Tusk calls on China, U.S., Russia not to start trade wars
- Glut of property hits UK housing market in July - Rightmove
- China Q2 GDP YY, 6.7%, 6.7% f'cast, 6.8% last
- China Jun Urban Investment (ytd)yy, 6%, 6% f'cast, 6.1% last
- China Jun Industrial Output YY, 6%, 6.5% f'cast, 6.8% last
- China Jun Retail Sales YY, 9%, 9% f'cast, 8.5% last
- New Zealand Q2 inflation expected to pick up, but underlying pressures weak
Economic Data Ahead
- (0400 ET/0800 GMT) Italy May Trade Balance EU, 1.077 bln last
- (0500 ET/0900 GMT) EU May Eurostat Trade NSA, Eur, 16.7 bln last
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index eased as the U.S. Treasury yields turned softer, with the 10 year treasury yields falling from 2.86 percent to 2.83 percent, and 2year yields declining from 2.60 percent to 2.57 percent. The greenback against a basket of currencies trades 0.1 percent down at 94.61, having touched a high of 95.24 on Friday, its highest since June 29. FxWirePro's Hourly Dollar Strength Index stood at -12.49 (Neutral) by 0500 GMT.
EUR/USD: The euro rose, extending previous session gains, as the greenback eased following a decline in the U.S. Treasury yields. The European currency traded 0.1 percent up at 1.1696, having touched a high of 1.1790 last week, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at 7.15 (Neutral) by 0500 GMT. Investors’ attention will remain on the Eurozone trade balance, ahead of U.S. retail sales and business inventories. Immediate resistance is located at 1.1720 (July 5 High), a break above targets 1.1801 (June 13 High),. On the downside, support is seen at 1.1630 (July 4 Low), a break below could drag it till 1.1600.
USD/JPY: The dollar edged up against the Japanese yen after the Federal Reserve's accompanying policy report released on Friday showed U.S. economic growth and the likelihood to keep raising rates gradually. The major was trading 0.05 percent up at 112.38, having hit a high of 112.80 on Friday, its highest since Jan 9. FxWirePro's Hourly Yen Strength Index stood at -140.02 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. retail sales and business inventories. Immediate resistance is located at 113.07 (Dec 19 High), a break above targets 113.38 (Dec 8 High). On the downside, support is seen at 111.91 (July 12 Low), a break below could take it lower 111.17 (10-DMA).
GBP/USD: Sterling rose, extending gains for the third straight session, after U.S. President Donald Trump said he looked forward to finalizing a post-Brexit trade deal with Britain. The major traded 0.1 percent up at 1.3248, having hit a high of 1.3362 last week; it’s highest since June 14. FxWirePro's Hourly Sterling Strength Index stood at 67.76 (Bullish) 0500 GMT. Investors’ attention will remain on the U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.3274 (July 5 High), a break above could take it near 1.3362 (July 9 High). On the downside, support is seen at 1.3180 (July 12 Low), a break below targets 1.3114 (July 3). Against the euro, the pound was trading 0.1 percent down at 88.32 pence, having hit a low of 89.00 pence last week, it’s lowest since March 9.
AUD/USD: The Australian dollar extended gains, despite China posting weaker-than-expected industrial production for June. The Aussie trades 0.1 percent up at 0.7432, having hit a high of 0.7483 on Tuesday; it’s highest since June 14. FxWirePro's Hourly Aussie Strength Index stood at 110.03 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7345, a break below targets 0.7300. On the upside, resistance is located at 0.7444 (July 6 High), a break above could take it near 0.7490.
NZD/USD: The New Zealand dollar surged as the greenback eased following last week's U.S. CPI inflation that came in slightly weaker than market expectations. The Kiwi trades 0.2 percent up at 0.6781, having touched a high of 0.6858 last week, its highest level since June 27. FxWirePro's Hourly Kiwi Strength Index was at 6.22 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6800, a break above could take it near 0.6824 (21-DMA). On the downside, support is seen at 0.6736 (June 29 Low), a break below could drag it below 0.6700.
Equities Recap
Asian shares tumbled after data showed China's economy grew 6.7 percent in the second quarter of 2018, and on worries of a full-scale China-U.S. trade war.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.3 percent.
Australia's S&P/ASX 200 index declined 0.4 percent to 6,241.50 points, and South Korea's KOSPI slumped 0.4 percent to 2,301.99 points.
Shanghai composite index fell 0.7 percent to 2,810.74 points, while CSI300 index was trading 0.7 percent up at 3,468.10 points.
Hong Kong’s Hang Seng was trading 0.2 percent lower at 28,453.26 points. Taiwan shares shed 0.4 percent to 10,817.45 points.
Commodities Recap
Crude oil prices declined as concerns about supply disruptions eased and Libyan ports resumed export activities. International benchmark Brent crude was trading 0.05 percent down at $74.80 per barrel by 0512 GMT, having hit a low of $73.08 on Wednesday, its lowest since June 21. U.S. West Texas Intermediate was trading 0.05 percent lower at $70.53 a barrel, after rising as low as $69.26 on Wednesday, its lowest since June 26.
Gold prices rebounded from a 7-month low after sluggish GDP data from China weighed heavily on Asian stocks. Spot gold was up 0.3 percent at $1,244.44 an ounce at 0517 GMT, after marking the lowest since Dec. 12 at $1,236.46 on Friday. U.S. gold futures for August delivery were 0.2 percent higher at $1,243.40 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.838 percent higher by 0.007 bps, while 5-year yield was 0.009 bps up at 2.736 percent.
The Australian government bonds traded narrowly mixed in subdued session as markets receive no major economic data. However, weak China’s second quarter economic growth could push investors towards safe-haven buying. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, traded nearly flat 2.636 percent, the yield on the long-term 30-year Note almost steady at 3.112 percent and the yield on short-term 2-year down 1/2 basis point to 2.013 percent.
The Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The 10-year gained 11 Canadian cents to yield 2.138 percent.
