Market Roundup
- Dollar firm on upbeat U.S. data
- Oil prices gain after inventory data
- Gold inches down as strong U.S. retail sales boots dollar
- Global dairy prices jump 2.7%, ending two-month losing streak
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Industrial Orders s.a. MM May
- (0400 ET/0800 GMT) Italy Industrial Sales s.a. MM May
- (0400 ET/0800 GMT) Italy Industrial Orders n.s.a. YY May
- (0400 ET/0800 GMT) Italy Industrial Sales n.s.a. YY May
- (0430 ET/0830 GMT) United Kingdom Retail Price index MM June
- (0430 ET/0830 GMT) United Kingdom Retail Price index YY June
- (0430 ET/0830 GMT) United Kingdom producer price index-output n.s.a. MM June
- (0430 ET/0830 GMT) United Kingdom producer price index-output n.s.a. YY June
- (0430 ET/0830 GMT) United Kingdom consumer price index YY June
- (0430 ET/0830 GMT) United Kingdom consumer price index MM June
- (0500 ET/0900 GMT) Eurozone consumer price index MM June
- (0500 ET/0900 GMT) Eurozone consumer price index YY June
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index rallied to a 1-week peak after upbeat U.S. data further tempered expectations of aggressive policy easing by the Federal Reserve later this month. The greenback against a basket of currencies traded 0.1 percent up at 97.43, having touched a low of 96.72 on Friday, its lowest since June 5.
EUR/USD: The euro consolidated near a 1-week low hit in the previous session, as investors expect the European Central Bank to move policy rates deeper into negative later this year as the eurozone economy continues to struggle. The European currency traded flat at 1.1215, having touched a low of 1.1201 on Tuesday, its lowest since July 9. Investors’ attention will remain on the Eurozone consumer price index and construction output, ahead of the U.S. housing starts and building permits. Immediate resistance is located at 1.1246 (23.6% retracement of 1.1412 and 1.1193), a break above targets 1.1278 (38.2% retracement). On the downside, support is seen at 1.1193 (July 9 Low), a break below could drag it below 1.1160 (June 3 Low).
USD/JPY: The dollar steadied after stronger-than-expected June U.S. retail sales data dampened expectations that the Fed could cut interest rates by 50 basis points rather than 25 bps at its month-end policy review. The pair was trading flat at 108.22, having hit a low of 107.79 on Monday, its lowest since July 5. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. housing starts and building permits. Immediate resistance is located at 108.53 (July 1 High), a break above targets 108.80 (July 8 High). On the downside, support is seen at 107.53 (July 3 Low), a break below could take it lower at 107.10 (June 26 Low).
GBP/USD: Sterling traded near a 6-1/2 month low as Boris Johnson and Jeremy Hunt, the two candidates to be Britain's next prime minister, vied to outgun each other on taking a harder Brexit stance. The major traded flat at 1.2409, having hit a low of 1.2396 on Tuesday, it’s lowest since Jan. 3. Investors’ attention will remain on the development surrounding Brexit, UK retail price index, producer price index, and consumer price index ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2439 (23.6% retracement of 1.2578 and 1.2396), a break above could take it near 1.2466 (32.8% retracement). On the downside, support is seen at 1.2373 (Jan. 3 Low), a break below targets 1.2334. Against the euro, the pound was trading flat at 90.35 pence, having hit a low of 90.47 on Tuesday, it’s lowest since Jan. 11.
AUD/USD: The Australian dollar eased, extending previous session losses, weighed down by losses in iron ore futures and news of financial fraud in China. The Aussie trades 0.05 percent down at 0.7008, having hit a high of 0.7044 on Tuesday, it’s highest since July 4. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6985 (July 3 Low), a break below targets 0.6941 (June 25 Low). On the upside, resistance is located at 0.7047 (July 4 High), a break above could take it near 0.7091 (Mar 12 High).
NZD/USD: The New Zealand dollar steadied after falling from a 3-month peak in the previous session after data showed global dairy prices rose, ending a two-month declining streak, in an auction held early in the day. The Kiwi trades 0.05 percent up at 0.6703, having touched a high of 0.6738 on Tuesday, its highest level Apr. 17. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6771 (Apr. 11 High), a break above could take it near 0.6799 (Apr. 4 High). On the downside, support is seen at 0.6664 (July 1 Low), a break below could drag it below 0.6602 (July 5 Low).
Equities Recap
Asian shares eased as investors remained nervous ahead of the earnings reports from corporate America, while the dollar held firm on robust U.S. retail data.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.3 percent.
Tokyo's Nikkei declined 0.3 percent to 21,469.18 points, Australia's S&P/ASX 200 index rose 0.5 percent to 6,673.30 points and South Korea's KOSPI tumbled 0.9 percent to 2,072.92 points.
Shanghai composite index eased 0.2 percent to 2,931.69 points, while CSI 300 index traded 0.05 percent down at 3,804.64 points.
Hong Kong’s Hang Seng traded 0.2 percent lower at 28,557.49 points. Taiwan shares shed 0.5 percent to 10,828.48 points.
Commodities Recap
Crude oil prices rose after steep falls in the previous session, after U.S. crude inventories fell by 1.4 million barrels in the week to July 12 to 460 million. International benchmark Brent crude was trading 0.3 percent higher at $64.46 per barrel by 0518 GMT, having hit a low of $63.81 on Tuesday, its lowest since July 9. U.S. West Texas Intermediate was trading 0.2 percent up at $57.58 a barrel, after falling as low as $57.06 on Tuesday, its lowest since the July 5.
Gold prices eased, extending losses for the third straight session, as the greenback firmed on robust U.S. retail sales data, while hopes of an interest rate cut by the Federal Reserve and broad uncertainties over trade between Washington and Beijing limited the downside. Spot gold was trading 0.05 percent down at $1,404.94 per ounce by 0525 GMT, having touched a high of $1,427.06 last week, its highest since July 3. U.S. gold futures slipped 0.3 percent to $1,406.70 an ounce.
Treasuries Recap
The Japanese government bond prices were mostly steady, with the five-year JGB yield unchanged at minus 0.215 percent. The 10-year yield was down half-a-basis point at minus 0.130 percent. The 20-year yield was flat at 0.240 percent.
The Australian government bonds remained narrowly mixed during Asian session Wednesday amid a muted trading session that witnessed data of little economic significance ahead of the country’s employment report for the month of June, scheduled to be released on July 18 by 07:00GMT. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, traded tad higher at 1.402 percent, the yield on the long-term 30-year bond remained flat at 2.054 percent and the yield on short-term 2-year slipped 1 basis point to 0.950 percent.
