Market Roundup
- EUR/USD -0.23%, USD/JPY 0.12%, GBP/USD 0.05%, EUR/GBP -0.25%
- DXY 0.26%, DAX 0.45%, FTSE 0.24%, Brent -0.88%, Gold 0.08%
- EZ Aug Economic sentiment 111.9 vs 111.2, 111.3 revised, 111.3 forecast
- Great Britain Jul Consumer Credit 1.179B vs 1.458B, 1.351B revised, 1.500B forecast
- Japan Jul Retail sales 1.9% yy, 1.0% forecast, May 2.2% revised,
- Japan Jul Crude oil imports -2.5% yy, LNG 3.6%, thermal coal 13.6%
- German negotiated wages post strongest increase on record in Q2
- Great Britain mortgage approvals jump, lending to non-fin institutions a record high
- Swiss KOF indicator falls to 104.1 pts in August
- Swiss investor sentiment indicator falls to 25 pts in Aug
- Moody's says G20 GDP growth to exceed 3 pct, warns of geopolitical risks
- U.N. condemns "outrageous" N. Korea missile launch, Pyongyang says more to come
- UK looking to replicate EU's external trade deals after Brexit -PM May
- Crude slips, gasoline jumps as storm shuts a fifth of U.S. fuel output
- Gold slips on stronger dollar; geopolitical risks support
Economic Data Ahead
- (0815 ET/1215 GMT) Payrolls processor ADP releases U.S. employment report for the month of August. The report is expected to show that private employers added 185,000 jobs as compared with 178,000 jobs in July.
- (0830 ET/1230 GMT) The U.S. Commerce Department is expected to report that preliminary gross domestic product increased at a 2.7 percent annual rate in the second quarter as compared to 2.6 percent pace estimated earlier.
- (0830 ET/1230 GMT) The U.S. Commerce Department releases the preliminary personal consumption expenditures (PCE) price index for the second quarter. The index is expected to rise 0.3 percent, while core PCE is likely to increase 0.9 percent, posting similar gains recorded in the previous quarter.
- (0830 ET/1230 GMT) The Statistics Canada is likely to report that current account deficit widened to C$17.40 billion in the second quarter, compared with a deficit of C$14.05 billion recorded in the previous quarter.
- N/A Mexico's central bank publishes its quarterly inflation report.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending August 25.
- (1901 ET/2301 GMT) The GfK Group will release Britain's consumer confidence index for the month of August. The index is expected to decline to 13 after slumping to 12 in July.
- (1950 ET/2350 GMT) Japan's Ministry of Economy, Trade, and Industry will release preliminary Industrial Production for the month of July. The indicator posted a final reading of 2.2 percent in the prior month.
- (1950 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending August 21.
- (1950 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending August 21.
Key Events Ahead
- (0915 ET/1315 GMT) Federal Reserve Board Governor Jerome Powell speaks on "Key Areas of Focus of Supervisory Reform" at the Large-Bank Directors Conference hosted by the Federal Reserve Bank of Chicago in Chicago, Illinois.
- (1145 ET/1545 GMT) Fed Trade operation 15-year Fannie Mae / Freddie Mac (max $600 mn)
FX Beat
DXY: The dollar rallied across the board as tensions over North Korea slightly eased, while investors shifted their focus on the release of U.S. ADP report and the first revision of GDP figures. The greenback against a basket of currencies traded 0.2 percent up at 92.48, having touched a low of 91.62 the day before, its lowest since Jan 2015. FxWirePro's Hourly Dollar Strength Index stood at -67.12 (Bearish) by 1000 GMT.
EUR/USD: The euro declined, putting further distance between a 2-1/2 year high hit in the previous session following a broad-based pick up in the demand for the greenback. Investors seem to have ignored better-than-expected Eurozone economic sentiment index, which rose to 111.9 in August from an upwardly revised 111.3 in July. The European currency traded 0.2 percent down at 1.1945, having touched a high of 1.2070 on Tuesday, its highest since Dec. 2014. FxWirePro's Hourly Euro Strength Index stood at 123.47 (Highly Bullish) by 1000 GMT. The near term intraday support is around 1.1930 (89- H EMA) and any break below will drag the pair down till 1.1908/1.1845 (200- H MA). On the higher side, 1.1963 (hourly Tenkan-Sen and 55- H EMA) will be acting as near term intraday resistance and any break above will take it till 1.2000/1.2070 (161.8% retracement).
USD/JPY: The dollar rallied to a fresh near 2-week high above the 110 handle, as markets attention shifted on crucial U.S economic data, including ADP report on the private sector employment and the first revision of economy's growth figures. However, upbeat Japanese retail sales data and persisting tensions in the Korean peninsula capped the upside in the pair. The major was trading 0.1 percent up at 109.84, having hit a high of 110.16 earlier, its highest since Aug. 17. FxWirePro's Hourly Yen Strength Index stood at -81.23 (Slightly Bearish) by 1000 GMT. On the lower side, any break below 108 confirms minor weakness, a decline till 106 likely. The major resistance is around 112 and any break above targets 112.98/114.
GBP/USD: Sterling consolidated within narrow ranges as investors remained sidelined amid ongoing Brexit negotiations. The pair failed to benefit from mixed UK economic releases, which showed the net lending to individuals data missing estimates, while the mortgage approvals bettered expectations. The major traded 0.1 percent up at 1.2931, having hit a high of 1.2978 on Tuesday, its highest since August 14. FxWirePro's Hourly Sterling Strength Index stood at 95.06 (Slightly Bullish) by 1000 GMT. On the lower side, support stands around 12860-1.2840 (200- H MA and 61.8% retracement) and any break below will drag the pair down till 1.2810/1.2773 (Aug 24th 2017 low). The near term resistance is around 1.2938 (hourly Tenkan-Sen) and any break above will take it till 1.29785/ 1.3000/ 1.3030. Against the euro, the pound was trading 0.3 percent up at 92.40 pence, having hit a 10-1/2 month low of 93.06 pence in the prior session.
USD/CHF: The Swiss franc eased after retreating from a 2-year high hit in the previous session, as the greenback recovered from multi year lows amid easing N. Korean tensions. The major trades 0.1 percent up at 0.9561, having touched a low of 0.9429 on Tuesday, it’s lowest since Aug. 2015. FxWirePro's Hourly Swiss Franc Strength Index stood at 38.77 (Neutral) by 1000 GMT. The major resistance is around 0.9645 (23.6% fibo) and any break above will take the pair till 0.9700/0.97730. On the lower side, any break below 0.94290 will drag it till 0.9340/0.9070.
AUD/USD: The Australian dollar trimmed gains after rising to a 1-week high earlier on the back of better-than-expected domestic construction activity and building approvals data. The Aussie trades 0.1 percent up at 0.7954, having hit a high of 0.7995 earlier, it’s strongest since Aug. 1. FxWirePro's Hourly Aussie Strength Index stood at 8.69 (Neutral) by 1000 GMT. On the lower side, near term support is around 0.7917 (200- 4H MA) and any break below will drag the pair till 0.7878 (61.8% fibo)/0.7800. The near term resistance is around 0.8070 and any break above targets 0.8100/0.8150.
Equities Recap
European shares gained, reversing previous session losses, while the greenback came off a 2-1/2 year low as investors’ worries over North Korea’s latest missile test eased.
The pan-European STOXX 600 index gained 0.5 percent to 370.08 points, while the FTSEurofirst 300 index advanced 0.5 percent to 1,454.96 points.
Britain's FTSE 100 trades 0.2 percent up at 7,351.86 points, while mid-cap FTSE 250 rallied 0.4 percent to 19,603.30 points.
Germany's DAX rose 0.4 percent at 11,997.61 points; France's CAC 40 trades 0.3 percent higher at 5,048.55 points.
Commodities Recap
Crude oil prices tumbled, extending losses for the third straight session, as flooding and storm damage from Hurricane Harvey shut nearly a fifth of U.S. refineries, raising the risk of fuel shortages. International benchmark Brent crude was trading 0.7 percent down at $51.54 per barrel by 0954 GMT, having hit a low of $51.37 earlier, its weakest since Aug. 21. U.S. West Texas Intermediate was trading 0.3 percent down at $46.15 a barrel, after falling as low as $45.74 the day before, its highest since Jul. 24.
Gold prices held gains near a more than nine-month peak touched in the previous session, supported by expectations that geopolitical risks could persist. Spot gold traded 0.1 percent up at $1,310.89 per ounce as of 0957 GMT, having hit its highest since Nov. 9 at 1,325.89 on Tuesday. U.S. gold futures slipped 0.4 percent to $1,313.20.
Treasuries Recap
The U.S. Treasuries traded mixed as investors await clarity on ADP non-farm employment data, scheduled to be released today by 12:15GMT, besides, the country’s Q2 GDP, due by 12:30GMT. The yield on the benchmark 10-year Treasury hovered around 2.13 percent, the super-long 30-year bond yields slipped nearly 1 basis point to 2.74 percent and the yield on short-term 2-year note traded 1/2 basis point higher at 1.33 percent.
The UK gilts lost strength Wednesday as investors remained cautious ahead of the release of manufacturing PMI for the month of August, scheduled on September 1 by 08:30GMT. The yield on the benchmark 10-year gilts, rose nearly 2-1/2 basis points to 1.02 percent, the super-long 30-year bond yields also surged 2-1/2 basis points to 1.69 percent and the yield on the short-term 2-year traded 1-1/2 basis points higher at 0.17 percent.
The German government bonds plummeted Wednesday as investors remained cautious ahead of the release of the country’s consumer price-led inflation index for the month of August, due today by 12:00GMT. Also, German unemployment rate, due on August 31 will guide debt markets thoroughly. The German 10-year bond yields, which moves inversely to its price, jumped nearly 2 basis points to 0.35 percent, the yield on 30-year note climbed 1-1/2 basis points to 1.11 percent and the yield on short-term 3-year traded flat at -0.68 percent.
The Japanese government bonds lost ground in early trading Wednesday after reading the country’s higher-than-expected retail sales for the month of July, released late Wednesday. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell slightly to 0.01 percent, the yield on long-term 30-year also remained tad 1 basis point lower at 0.83 percent and the yield on short-term 2-year hovered around -0.15 percent.
The New Zealand bonds slumped at the time of closing Wednesday after the Reserve Bank of New Zealand (RBNZ) sounded promising over the economic health of the country, in his speech delivered today. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 3-1/2 basis points to 2.91 percent, the yield on 7-year note climbed 4 basis points to 2.76 percent while the yield on short-term 2-year ended 2 basis points higher at 2.06 percent.
The Australian 10-year bond yields surged to a level last seen on August 3 as investors continue to engage in risk averse trading after North Korea fired a test missile over Japan on Tuesday. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped nearly 7 basis points to 2.69 percent, the yield on 15-year note surged 6-1/2 basis points to 2.99 percent and the yield on short-term 2-year also climbed nearly 6 basis points higher at 1.89 percent.
