Market Roundup
Japan May core machinery orders, -3.6% m/m, 0.6% y/y, vs forecast +1.7% +7.7%
Japan May unadjusted CA bal, +1653.9 bln yen, vs forecast +1796.3 bln yen -mof
Kuroda repeats BOJ's resolve to maintain ultra-loose policy
Japan PM Abe to reshuffle cabinet as support plunges to lowest since 2012
China June PPI +5.5% y/y vs forecast +5.5%, last +5.5%
China June CPI +1.5% y/y, -0.2% m/m vs forecast 1.5%, -0.2%, last +1.5%, -0.1%
Speculators chop net long USD bets to lowest since mid-May-CFTC, Reuters
Trump backtracks on cyber unit with Russia after harsh criticism
Economic Data Ahead
(0430 ET/0830 GMT) Eurozone Jul Sentix Index, 28.4 eyed, last 28.4
Key Events Ahead
(0300 ET/0700 GMT) Romania central bank to release minutes of its July 3 rate-setting meeting.
N/A ECB's Benoit Ceure and Daniele Nouy participate in Eurogroup meeting in Brussels
N/A The Croatian c. bank and the IMF hold a conf. on economic convergence (to July 11).
FX Beat
DXY: The dollar gained across the board after Friday’s payrolls report boosted the odds of another Federal Reserve rate hike in December. The greenback against a basket of currencies traded flat at 96.00, having touched a high of 96.51 on Wednesday, it’s highest since Jun. 28. FxWirePro's Hourly Dollar Strength Index stood at -36.82 (Neutral) by 0500 GMT.
EUR/USD: The euro opened on a bearish gap as the greenback rose after Friday’s strong US non-farm payrolls signaled the Federal Reserve would stick with its stance on tightening for the rest of this year. The European currency traded flat at 1.1402, having touched a low of 1.1312 on Wednesday, its lowest since Jun 28. FxWirePro's Hourly Euro Strength Index stood at 32.81 (Neutral) by 0400 GMT. Investors’ attention will remain on Eurozone Sentix confidence, ahead of the U.S. labor market conditions index (LMCI) for further clues on the pair. Immediate resistance is located at 1.1445 (June 30 High), a break above targets 1.1500. On the downside, support is seen at 1.1376 (5-DMA), a break below could drag it near 1.1350.
USD/JPY: The dollar rallied to a fresh two-month high against the yen after a larger-than-expected increase in U.S. jobs suggested the Federal Reserve would maintain its tightening plans for the rest of this year. The major traded 0.2 percent up at 114.12, having hit a high of 114.20 earlier, its highest since May 11. FxWirePro's Hourly Yen Strength Index stood at -82.66 (Slightly Bearish) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of the U.S. labor market conditions index (LMCI). Immediate resistance is located at 114.36 (May 11 High), a break above targets 115.00. On the downside, support is seen at 113.40 (5-DMA), a break below could take it near 112.80 (10-DMA).
GBP/USD: Sterling steadied after declining in the previous session on downbeat industrial output data and widening goods trade deficit. The markets seem to have digested the weekend’s headlines, citing that EU Parliament may veto UK citizen's rights offer, as attention shifted on the release of the UK jobs report later in the week. Sterling traded 0.1 percent up at 1.2898, having hit a low of 1.2867 on Friday, its lowest since Jun. 28. FxWirePro's Hourly Sterling Strength Index stood at -69.08 (Bearish) by 0400 GMT. Investors’ focus will remain on the U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.2950, a break above could take it near 1.3047 (May 18 High). On the downside, support is seen at 1.2854 (June 5 Low), a break below 1.2809 (21-DMA). Against the euro, the pound traded up at 88.410 pence, having hit a 1-week low of 88.60 the prior session.
AUD/USD: The Australian dollar rose, extending gains above the 0.7600 handle as the outlook for interest rates globally continued to diverge. The Aussie trades 0.1 percent up at 0.7610, having hit a low of 0.7571 on Wednesday, it’s weakest since Jul. 28. FxWirePro's Hourly Aussie Strength Index stood at 67.29 (Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7571 (July 5 Low), a break below targets 0.7550. On the upside, resistance is located at 0.7622 (10-DMA), a break above could take it near 0.7700.
NZD/USD: The New Zealand dollar consolidated within a narrow range, as unimpressive Chinese macro news, including the services PMI and inflation data weighed heavily on the Kiwi. The major trades flat at 0.7277, having touched a low of 0.7244 on Thursday, its weakest level since Jun. 22. FxWirePro's Hourly Kiwi Strength Index was at 45.52 (Neutral) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7300, a break above could take it near 0.7320. On the downside, support is seen at 0.7260, a break below could drag it till 0.7200.
Equities Recap
Asian shares rose, boosted by Friday's strong gains on Wall Street, while the U.S. dollar extended upside after much stronger than expected June employment data.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.55 percent.
Tokyo's Nikkei edged up 0.8 percent to 20,088.36 points, Australia's S&P/ASX 200 index rose 0.3 percent to 5,720.10 points and South Korea's KOSPI gained 0.3 percent to 2,386.91 points.
Shanghai composite index eased 0.2 percent to 3,211.31 points, while CSI300 index was trading 0.01 percent down at 3,655.28 points.
Hong Kong’s Hang Seng was trading 1.0 percent higher at 25,608.16 points. Taiwan shares added 0.01 percent to 10,301.95 points.
Commodities Recap
Crude oil prices steadied after falling nearly 3 percent in the previous session, however, markets remained under pressure from high drilling activity in the United States. International benchmark Brent crude was trading 0.6 percent up at $47.06 per barrel by 0417 GMT, having hit a low of $46.26 on Friday, its weakest since Jun. 28. U.S. West Texas Intermediate traded 0.5 percent higher at $44.55 a barrel, after falling as low as $43.75 the prior session, its weakest since Jun 28.
Gold prices edged down, extending losses for the third consecutive session after stronger than expected U.S. jobs data indicated that the Federal Reserve would maintain its stance on monetary tightening. Spot gold was trading down at $1,210.84 per ounce at 0424 GMT, having declined more than 2 percent last week and touched its lowest since March 15 on Friday. U.S. gold futures for August delivery rose 0.3 percent to $1,212.80 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.383 percent lower by 0.009 bps, while 5-year yield was 0.012 down at 1.945 percent.
The Australian 10-year government bond yields were at their highest since March around 2.79 percent. The three-year bond futures were off 2 ticks at 97.960, while the 10-year contract dipped 2 ticks to 97.250.
The New Zealand government bonds were little changed after yields jumped on Friday in the wake of the U.S. jobs report.
