Market Roundup
EUR/USD +0.08%, USD/JPY +0.12%, GBP/USD +0.23, EUR/GBP -0.14%
DXY -0.16%, DAX -0.72%, FTSE -0.70%, Brent +1.40%, Gold -0.12%
German industrial sector getting back on track as orders pick up
Germany May Industrial Orders m/m, +1.0% vs forecast +2.0%, previous -2.1% revised -2.2%
ECB needs patience, steady hand to revive inflation: Praet
French central bank chief raises French growth outlook to 1.6 pct
No such thing as "frictionless" trade, Barnier warns UK
UK financial watchdog says firms must be free to choose location after Brexit
Leftist protesters vow to disrupt G20 summit in Hamburg
Trump says U.S. will confront threat from North Korea very strongly
China June data to show steady growth, debt crackdown dims outlook
PBOC says will strengthen its ability to adjust interest rates
Oil rises after U.S. inventory drop but outlook remains gloomy
Gold slips after Fed minutes show split outlook, data eyed
MoF flow data week-ended July – Japanese sell net Y772.8 bln foreign bonds
Japanese investors re-setting for-bond exposures on higher yields abroad
Foreign investors sell net Y1.0627 trln parked in Japanese bills, re-pat flow
Japan-EU trade agreement likely from today, to cover a wide spectrum of goods.
Japan Inc’s vast pool of cash is growing stagnant – Nikkei
Economic Data Ahead
(0815 ET/1215 GMT) Payrolls processor ADP releases U.S. employment report for the month of June. The report is expected to show that 155,000 jobs were added as compared with 253,000 jobs in May.
(0830 ET/1230 GMT) The United States releases trade balance figures for the month of June. The economy's trade deficit is expected to have narrowed to $46.2 billion from 47.6 billion in May.
(0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 1,000 to a seasonally adjusted 243,000 for the week ended Jun. 26, while continuing claims for the week ended Jun. 26 is expected to decline to 1.939 million from 1.948 million.
(0830 ET/1230 GMT) The Statistics Canada is likely to report that building permits rose 2.6 percent in May, compared with a decline of 0.2 percent in April.
(0830 ET/1230 GMT) The Statistics Canada is likely to report that international trade deficit widened to C$530 million in May from C$370 billion in April.
(0945 ET/1345 GMT) Financial firm Markit releases final U.S. composite PMI for the month of June. The index posted a final reading of 53.0 in the previous month.
(0945 ET/13445 GMT) Markit Economics reports final U.S. services PMI for the month of June. The index posted a final reading of 53.0 in May.
(1000 ET/1400 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. non-manufacturing Purchasing Managers' Index eased to a final reading of 56.5 in June from 56.9 in May.
(1100 ET/1500 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending June 30.
(1830 ET/2330 GMT) The Australian Industry Group (AiG) releases its Performance of Construction Index for the month of June. The index stood at 56.7 the month before.
(1950 ET/2350 GMT) Japan releases Foreign Exchange Reserves report for the month of June.
Key Events Ahead
(1000 ET/1400 GMT) Federal Reserve Board Governor Jerome Powell speaks on "The Case for Housing Finance Reform" before the American Enterprise Institute in Massachusetts.
(1145 ET/1545 GMT) FedTrade Operation 15-Year Fannie Mae / Freddie Mac (max $625 mn)
(1430 ET/1830 GMT) FedTrade Operation 30-Year Fannie Mae / Freddie Mac (max $1.625 bn)
(1930 ET/2330 GMT) Federal Reserve Vice Chair Stanley Fischer speaks on "Government Policy and Labor Productivity" before the Martha's Vineyard Hebrew Center Summer Institute, in Vineyard Haven, Massachusetts.
FX Beat
DXY: The dollar eased versus most of its major peers as investors cautiously awaited Federal Reserve Vice Chair Stanley Fischer and Fed Board Governor Jerome Powell's speeches for further insights on the strength of the U.S. economy and monetary outlook. The greenback against a basket of currencies traded 0.2 percent down at 96.04, having touched a low of 95.47 last week, it’s lowest since Oct. 3. FxWirePro's Hourly Dollar Strength Index stood at 110.94 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro rose, rebounding from a 1-week low as the greenback tumbled after minutes from the U.S. Federal Reserve's latest monetary policy meeting showed no consensus on the likely pace of interest rate The European currency traded 0.2 percent up at 1.1368, having touched a low of 1.1312 on Wednesday, its lowest since Jun 28. FxWirePro's Hourly Euro Strength Index stood at -2.60 (Neutral) by 1100 GMT. ). Intraday weakness can be seen only below 1.12900 level and any break below will drag the pair down till 1.12600 (21- day EMA). On the higher side, the temporary top formed around 1.1430 will be acting as major bullish continuation level.
USD/JPY: The dollar steadied above the 113.00 handle following a rise in the U.S. Treasury yields. Investors’ attention now shifts on Federal Reserve Vice Chair Stanley Fischer and Fed Board Governor Jerome Powell's speeches for further insights on the strength of the U.S. economy after most Fed policymakers viewed recent softness in inflation data. The major traded 0.1 percent up at 113.35, having hit a high of 113.68 on Wednesday, its highest since May 16. FxWirePro's Hourly Yen Strength Index stood at -6.63 (Neutral) by 1100 GMT. The near term resistance is around 114.36 and any break above targets 115.50. The pair is facing minor support at 112.70 (7- day MA) and any break below will drag it till 111.75 (100- day MA).
GBP/USD: Sterling rose towards the 1.300 handle as the greenback came under renewed selling pressure versus its major peers following a warning issued by the U.S. President Trump in response to the North Korean missile threat. The major traded 0.1 percent up at 1.2948, having hit a high of 1.3029 on Friday, its highest since May 23. FxWirePro's Hourly Sterling Strength Index stood at -9.80 (Neutral) by 1100 GMT. The pair should break above 1.3050 for further bullishness and any violation above will take the pair till 1.3110 (113% retracement of 1.30475 and 1.25894)/1.3150/1.33150 (88.6% retracement of 1.3440 and 1.19040). On the lower side, near-term minor support is around 1.2910 (cloud top) and any break below will drag it down till 1.2850 (21- day EMA)/1.2800 (daily Kijun-Sen). Against the euro, the pound traded 0.1 percent down at 87.82 pence, having hit a 7-month low of 88.79 on Thursday.
USD/CHF: The Swiss franc declined, reversing most of its previous session gains as investors were reluctant to add bearish bets on greenback before some key U.S. data. The major trades 0.1 percent up at 0.9648, having touched a high of 0.9688 on Wednesday, it’s highest since Jun. 27. FxWirePro's Hourly Swiss Franc Strength Index stood at -47.17 (Neutral) by 1100 GMT. The intraday major resistance is 0.96875 (61.8% retracement of 0.97780 and 0.95504) and any break above will take the pair till 0.9710/0.97708.It should break above 0.9808 for further bullishness. On the lower side, major support is around 0.9550 and any break below will drag it till 0.9520/0.9495 level.
AUD/USD: The Australian dollar slumped, extending losses for the fourth consecutive day, despite data showing that Australia's trade surplus widened to A$2.471 billion as compared to A$1.10 billion expected. The Aussie trades 0.1 percent down at 0.7594, having hit a low of 0.7571 the day before, it’s weakest since Jul. 28. FxWirePro's Hourly Aussie Strength Index stood at -140.32 (Highly Bearish) by 1000 GMT. On the lower side, near term support is around 0.7580 (21- day EMA) and any break below will drag the pair till 0.7530 (200- MA). The near term resistance is around 0.7750 and any break above targets 0.7800/0.7835.
Equities Recap
European shares declined following weak earnings updated from companies, while the greenback eased ahead of influential Fed officials' speeches and crucial U.S. economic data.
The pan-European STOXX 600 index rose 0.8 percent to 379.69 points, while the FTSEurofirst 300 index lost 0.8 percent to 1,492.80 points.
Britain's FTSE 100 trades 0.7 percent down at 7,316.9 points, while mid-cap FTSE 250 declined 0.5 percent to 19,355.71 points.
Germany's DAX fell 0.7 percent at 12,362.75 points; France's CAC 40 trades 1.06 percent lower at 5,125.40 points.
Commodities Recap
Crude oil price rose, recovering from previous day losses following a surprisingly upbeat picture of U.S. demand, however, the prospect of oversupply in 2018 continued to hurt market sentiment. International benchmark Brent crude was trading 0.4 percent up at $48.50 per barrel by 1114 GMT, having hit a high of $49.87 on Tuesday, its strongest since Jun. 7. U.S. West Texas Intermediate traded 0.5 percent higher at $45.82 a barrel, after rising as high as $47.29 earlier in the week, its strongest since Jun 6.
Gold edged down, hovering towards a two-month low hit in the previous session, as the dollar gained against the yen following a rise in U.S. Treasury yields. Spot gold was down 0.2 percent at $1,223.57 an ounce at 1117 GMT, having touched a low of $1,217.31 an ounce on Wednesday, its weakest since May 11. U.S. gold futures for August delivery were up $2.10 an ounce at $1,223.80.
Treasuries Recap
The U.S. Treasuries slumped on expectations that the country’s initial jobless claims, scheduled to be released later today, will witness a slight fall and as investors wait to watch the FOMC member Powell’s later today. The yield on the benchmark 10-year Treasury, jumped 3 basis points to 2.36 percent, the super-long 30-year bond yields climbed 2-1/2 basis points to 2.88 percent and the yield on short-term 2-year note traded nearly 1-1/2 basis points higher at 1.43 percent.
The UK gilts disappointed as investors wait to watch the country’s manufacturing production for the May, scheduled to be released on July 7. Also, the Bank of England Governor Mark Carney’s speech, due on the same day will provide further direction to the debt market. The yield on the benchmark 10-year gilts, jumped nearly 4-1/2 basis points to 1.30 percent, the super-long 30-year bond yields climbed 4 basis points to 1.92 percent and the yield on the short-term 2-year traded 3 basis points higher at 0.34 percent.
The Eurozone periphery bonds slumped as investors remained cautious ahead of Germany’s industrial production data, for the month of June, scheduled to be released on July 6. Also, the European Central Bank’s (ECB) June Governing Council meeting today, will add further direction to the debt market. The benchmark German 10-year bond yields, jumped 5 basis points to 0.52 percent, the French 10-year bond yields surged 6-1/2 basis points to 0.87 percent, Irish 10-year bond yields also climbed nearly 6 basis points to 0.93 percent, Italian up 7-1/2 basis points to 2.21 percent, Netherlands 10-year bond yields higher nearly 6-1/2 basis points to 0.72 percent, Portuguese equivalents nearly 5 basis points higher at 3.01 percent while the Spanish 10-year yields traded flat at 1.56 percent.
The Japanese 10-year government bond yields hit a 5-month high despite solid signals emerging from global financial markets for the safe-haven market amid strong demand at the 30-year auction, held early today. The benchmark 10-year bond yield, rose 1-1/2 basis points to 0.10 percent, the long-term 30-year bond yields climbed nearly 1 basis point to 0.89 percent and the yield on the short-term 2-year note traded 1 basis point higher at -0.10 percent.
The New Zealand bonds closed higher as investors covered previous short positions after a long rally this week. Also, investors have largely shrugged off the improvement in the country’s latest GlobaldairyTrade (GDT) price auction, held late Tuesday. At the time of closing, the yield on the benchmark 10-year bond, slumped 4-1/2 basis points to 2.98 percent, the yield on 7-year note also plunged 4-1/2 basis points to 2.87 percent and the yield on short-term 2-year note ended 3 basis points lower at 2.05 percent.
The Australian bonds traded mixed as investors remained muted in a silent trading session after witnessing a solid demand at a government auction early Wednesday, where a single buyer snapped up the entire AUD800 million (USD609 million) bonds, the largest-ever amount bought by one bidder in auctions since 1982. The yield on the benchmark 10-year Treasury note, fell 1 basis point to 2.58 percent, the yield on 15-year note also slipped 1 basis point to 2.93 percent while the yield on short-term 2-year traded 1 basis point higher at 1.71 percent.
