Market Roundup
- China, U.S. to hold next round of trade talks in late August
- China state planner accelerates approvals for infrastructure projects
- U.S. hits Chinese and Russian firms over breach of N.Korea sanctions
- U.S. tariffs to stay on Turkey, Qatar offers Ankara aid
- Turkey must commit to policies to promote stability amid market volatility-IMF
- Japan's holdings of U.S. Treasury debt fall to lowest since 2011
- Japan Jul Exports YY, 3.9%, 6.3% f'cast, 6.7% prev
- Japan Jul Imports YY, 14.6%, 14.4% f'cast, 2.5% prev
- Japan Jul Trade Balance Total Yen, -231.2 bln, -50.0 bln f'cast, 721.4 bln prev
- Australia Jul Employment, -3.9k, 15.0k f'cast, 50.9k prev
- Australia Jul Participation rate, 65.5%, 65.7% f'cast, 65.7% prev
- Australia Jul Unemployment Rate, 5.3%, 5.4% f'cast, 5.4% prev
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Jul Retail Sales MM, 0.2% f'cast, -0.5% prev
- (0430 ET/0830 GMT) Great Britain Jul Retail Sales Ex-Fuel MM, 0.1% f'cast, -0.6% prev
- (0430 ET/0830 GMT) Great Britain Jul Retail Sales YY, 3.0% f'cast, 2.9% prev
- (0430 ET/0830 GMT) Great Britain Jul Retail Sales Ex-Fuel YY, 2.8% f'cast, 3.0% prev
Key Events Ahead
- N/A Swedish Finance Minister Magdalena Andersson presents new economic forecasts and spending
- (0400 ET/0800 GMT) Norway Central Bank announces interest rate decision in Oslo
FX Beat
DXY: The dollar index pulled back from a 13-month peak as risk aversion eased and emerging market currencies bounced back after China's Ministry of Commerce stated that it had received an invitation from Washington for trade talks. The greenback against a basket of currencies trades 0.3 percent up at 96.45, having touched a high of 96.98 on Wednesday, its highest since July 2017. FxWirePro's Hourly Dollar Strength Index stood at -9.71 (Neutral) by 0400 GMT.
EUR/USD: The euro rebounded from a 13-month low amid a correction of the greenback in the market. Investors now await Eurozone trade balance, which is expected to expand to 17.0 billion euros in June from 16.9 billion euros. The European currency traded 0.4 percent up at 1.1385, having touched a low of 1.1301, its lowest since July 2017. FxWirePro's Hourly Euro Strength Index stood at 9.32 (Neutral) by 0400 GMT. Investors’ attention will remain on EZ trade balance and geopolitical developments, ahead of the U.S. building permits, housing starts, and unemployment benefit claims. Immediate resistance is located at 1.1427 (38.2% retracement of 1.1628 and 1.1301), a break above targets 1.1503 (50% retracement). On the downside, support is seen at 1.1300, a break below could drag it till 1.1260.
USD/JPY: The dollar steadied after easing from a 1-week peak touched in the previous session, as risk aversion eased and emerging market currencies bounced back on news that a Chinese delegation will travel to Washington late in August to try to resolve trade disputes. The major was trading 0.05 percent up at 111.79, having hit a high of 111.43 on Wednesday, its highest since August 8. FxWirePro's Hourly Yen Strength Index stood at -73.37 (Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. building permits, housing starts, and unemployment benefit claims. Immediate resistance is located at 111.71 (78.6% retracement of 112.15 and 110.11), a break above targets 112.15 (August 1 Low). On the downside, support is seen at 110.11 (August 13 Low), a break below could take it lower 109.68 (June 27 Low).
GBP/USD: Sterling held firm above the 1.2700 handle, after tumbling to a 13-month low in the prior session, as UK consumer price inflation nudged up to 2.5 percent year-on-year in July from 2.4 percent the previous month, reviving investor risk sentiment. The major traded 0.3 percent up at 1.2729, having hit a low of 1.2661; it’s lowest since June. 2017. FxWirePro's Hourly Sterling Strength Index stood at -82.72 (Slightly Bearish) 0400 GMT. Investors attention will remain on the UK retail sales, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.2782 (23.6% retracement of 1.3173 and 1.2661), a break above could take it near 1.2857 (38.2% retracement). On the downside, support is seen at 1.2650, a break below targets 1.2610. Against the euro, the pound was trading 0.2 percent down at 89.51 pence, having hit a high of 88.96 on Tuesday, it’s highest since August 6.
AUD/USD: The Australian dollar retreated from an over 1-1/2 year low touched in the previous session after domestic data showed unemployment fell to a 6-year low of 5.3 percent in July. However, employment declined by 3,900 in July, missing expectations for a gain of 15,000. The Aussie trades 0.4 percent up at 0.7269, having hit a low of 0.7202 on Wednesday; it’s lowest since Jan. 2017. FxWirePro's Hourly Aussie Strength Index stood at 129.59 (Highly Bullish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7180, a break below targets 0.7135. On the upside, resistance is located at 0.7298 (38.2% retracement of 0.7453 and 0.7202), a break above could take it near 0.7327 (50.0% retracement).
NZD/USD: The New Zealand dollar bounced back from a 2-1/2 low hit in the prior session after Beijing said it would send a delegation to Washington to resolve trade disputes between the United States and China. The Kiwi trades 0.3 percent up at 0.6585, having touched a low of 0.6544 on Wednesday, its lowest level since February 2016. FxWirePro's Hourly Kiwi Strength Index was at 64.34 (Bullish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6598 (23.6% retracement of 0.6763 and 0.6544), a break above could take it near 0.6629 (38.2% retracement). On the downside, support is seen at 0.6515, a break below could drag it below 0.6484.
Equities Recap
Asian shares rebounded from 1-year lows after Beijing said it will hold trade talks with Washington, however, concerns over an economic slowdown in China weighed on investor sentiment.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.3 percent.
Tokyo's Nikkei declined 0.05 percent to 22,192.04 points, Australia's S&P/ASX 200 index slumped 0.05 percent to 6,328.30 points, and South Korea's KOSPI plunged 0.9 percent to 2,238.01 points.
Shanghai composite index fell 0.4 percent to 2,712.30 points, while CSI300 index traded 0.2 percent down at 3,386.45 points.
Hong Kong’s Hang Seng traded 0.7 percent lower at 27,131.93 points. Taiwan shares shed 0.3 percent to 10,683.90 points.
Commodities Recap
Crude oil prices gained, reversing some of the previous day's losses after Beijing said it would send a delegation to Washington to try to resolve trade disputes between the United States and China. International benchmark Brent crude was trading 0.4 percent up at $70.99 per barrel by 0504 GMT, having hit a low of $70.28 on Wednesday, its lowest since April 10. U.S. West Texas Intermediate was trading 0.3 percent higher at $66.28 a barrel, after falling as low as $64.45 earlier, its lowest since June 21.
Gold prices slumped to 19-month lows following news that Beijing will hold trade talks with Washington this month. Spot gold was 0.1 percent down at $1,174.35 an ounce as of 0513 GMT, having hit a low of $1160.07, its lowest since early January, 2017. U.S. gold futures were down 0.5 percent at $1,179.5 an ounce.
Treasuries Recap
The Japanese government bonds remained tad lower during late Asian session after investors have largely shrugged-off the wider-than-expected trade deficit for the month of July. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped 1/2 basis point to 0.100 percent, the yield on the long-term 30-year note steadied at 0.847 percent and the yield on short-term 2-year traded flat at -0.117 percent.
The Australian long-term government bonds gained after fall in July employment change disappointed investors, but 6-year low jobless rate supported the short-term yield curve. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 1 basis point to 2.563 percent, the yield on the long-term 30-year Note also dipped 1 basis point to 3.060 percent and the yield on short-term 2-year rose 1 basis point to 2.005 percent.
The Canadian government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries. The 10-year rose 44 Canadian cents to yield 2.269 percent. Its yield touched its lowest since July 25 at 2.260 percent.
