Economic Data Ahead
- (0500 ET/0900 GMT) EZ Retail Sales MM
- (0500 ET/0900 GMT) EZ Retail Sales YY
Key Events Ahead
- (0300 ET/0700 GMT) European Central Bank's Philip Richard Lane give a speech
- (0510 ET/0910 GMT) European Central Bank Vice-president Luis De Guindos' speech
FX Beat
DXY: The dollar index consolidated as falling Treasury yields fueled expectations the U.S. Federal Reserve will cut interest rates this month for the first time in a decade. The greenback against a basket of currencies traded flat at 96.77, having touched a high of 96.88 on Tuesday, its highest since June 20.
EUR/USD: The euro consolidated near a 2-week low since IMF Managing Director Christine Lagarde, perceived as a policy dove, was nominated as the next European Central Bank president. The European currency traded flat at 1.1283, having touched a low of 1.1268 on Wednesday, its lowest since June 20. Investors’ attention will remain on a series of data from the Eurozone retail sales, as U.S. markets remain closed on account of Independence Day. Immediate resistance is located at 1.1327 (38.2% retracement of 1.1412 and 1.1275), a break above targets 1.1360 (61.8% retracement). On the downside, support is seen at 1.1251 (June 7 Low), a break below could drag it below 1.1203 (June 17 Low).
USD/JPY: The dollar traded within narrow ranges after falling to a 1-week low in the previous session as the U.S. Treasury yields eased to their lowest in more than 2-1/2 years on increasing bets major central banks will cut interest rates to bolster the global economy. The pair was trading flat at 107.80, having hit a low of 107.53 on Wednesday, its lowest since Jun. 26. Investors’ will continue to track the broad-based market sentiment, as U.S. financial markets are closed for a public holiday. Immediate resistance is located at 108.36 (June 4 High), a break above targets 108.80 (June 11 High). On the downside, support is seen at 107.24 (June 24 Low), a break below could take it lower at 106.78 (June 25 Low).
GBP/USD: Sterling rebounded from a 2-week low despite persisting concerns over Britain’s chances of striking a Brexit withdrawal deal with the European Union before the October 31 departure deadline. Investors also await the governing Conservative Party's decision to name either Boris Johnson or Jeremy Hunt as its new leader on July 23. The major traded 0.1 percent up at 1.2578, having hit a low of 1.2557 on Wednesday, it’s lowest since June 19. Immediate resistance is located at 1.2655 (5-DMA), a break above could take it near 1.2743 (June 5 High). On the downside, support is seen at 1.2542 (June 19 Low), a break below targets 1.2506 (June 18 Low). Against the euro, the pound was trading 0.1 percent down at 89.70 pence, having hit a high of 89.19 on Tuesday, it’s highest since Jun. 25.
AUD/USD: The Australian dollar rallied to an 8-week peak on news that the country's conservative government looked set to secure the required support to pass A$158 billion worth of tax cuts over the next decade. The Aussie trades 0.1 percent up at 0.7033, having hit a high of 0.7047 earlier, it’s highest since May 7. Immediate support is seen at 0.6977 (10-DMA), a break below targets 0.0.6941 (June 25 Low). On the upside, resistance is located at 0.7069 (Apr. 30 High), a break above could take it near 0.7102 (Apr. 24 High).
NZD/USD: The New Zealand dollar eased amid waning expectations for a quick resolution to the United States-China trade war. The Kiwi trades 0.1 percent down at 0.6701, having touched a high of 0.6726 on Monday, its highest level April 18. Immediate resistance is located at 0.6753 (April 8 High), a break above could take it near 0.6799 (Apr. 4 High). On the downside, support is seen at 0.6657 (10-DMA), a break below could drag it below 0.6592 (June 26 Low).
Equities Recap
Asian shares climbed as data pointed to slowing economic growth in the United States, boosting the prospect of rate cuts by the Federal Reserve as soon as this month.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.3 percent.
Tokyo's Nikkei rallied 0.3 percent to 21,702.45 points, Australia's S&P/ASX 200 index gained 0.5 percent to 6,718.00 points and South Korea's KOSPI surged 0.6 percent to 2,108.73 points.
Shanghai composite index fell 0.5 percent to 3,000.25 points, while CSI 300 index traded 1.1 percent down at 3,867.09 points.
Hong Kong’s Hang Seng traded 0.2 percent lower at 28,800.36 points. Taiwan shares rose 0.3 percent to 10,775.90 points.
Commodities Recap
Crude oil prices declined after posting solid gains in the previous session, weighed down by data showing a smaller-than-expected decline in U.S. crude stockpiles. International benchmark Brent crude was trading 0.8 percent lower at $63.36 per barrel by 0521 GMT, having hit a low of $62.06 on Wednesday, its lowest since June 19. U.S. West Texas Intermediate was trading 0.9 percent down at $56.81 a barrel, after falling as low as $56.03 on Wednesday, its lowest since the June 20.
Gold prices steadied, supported by a decline in U.S. Treasury yields amid prospects of an interest rate cut by the Federal Reserve. Spot gold was trading flat at $1,415.93 per ounce by 0557 GMT, having touched a high of $1,437.66 on Thursday, its highest since June 25. U.S. gold futures ticked up 0.1 percent to $1,421.8 an ounce.
Treasuries Recap
The Japanese government bonds closed flat amid a successful super-long 30-year auction that drew ample demand from investors ahead of the country’s household spending data for the month of May, due today by 23:30GMT. At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around -0.153 percent, the yield on the long-term 30-year flat at 0.344 percent and the yield on short-term 2-year also steadied at -0.216 percent.
The Australian government bonds remained slightly lower amid a muted trading session that witnessed data of little economic significance. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, remained tad higher at 1.296 percent, the yield on the long-term 30-year bond rose nearly 1 basis point to 1.948 percent and the yield on short-term 2-year traded nearly 1-1/2 basis points higher at 0.948 percent.
