Market Roundup
- EUR/USD -0.03%, USD/JPY -0.20%, GBP/USD 0.25%, EUR/GBP -0.27%
- DXY -0.06%, DAX 0.15%, FTSE 0.03%, Brent 0.56%, Gold 0.65%
- China warns of retaliation if U.S. slaps new tariffs
- Don't look to ECB for bigger stability role: Mersch
- Sterling nudges up, still off previous highs on Brexit, trade war fears
- Swedish crown slumps vs euro, dollar after cbank meeting
- Indian rupee breaches 72/dlr for 1st time, markets weigh mild c.bank reaction
- Germany Jul Industrial Orders MM, -0.9%, 1.8% forecast, -4.0% previous, -3.9% revised
- Ramaphosa says South Africa to recover from recession soon
- Gold gains on short-covering, softer dollar
- Oil rises on weaker dollar, but demand doubts remain
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 190,000 jobs were added as compared with 219,000 jobs in July.
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 1,000 to a seasonally adjusted 214,000 for the week ended Aug. 31, while continuing claims for the week ended Aug. 24 rose to 1.710 million from a previous reading of 1.708 million.
- (0830 ET/1230 GMT) The U.S. Labor Department will release labor costs report for the second quarter. The indicator is expected to decline 0.9 percent after posting a similar decline in the previous quarter.
- (0830 ET/1230 GMT) The U.S. Labor Department is likely to report that non-farm productivity edged up 3.0 percent in the second quarter from 2.9 percent in the previous quarter.
- (0830 ET/1230 GMT) The Statistics Canada is likely to report that building permits have increased by 1.3 percent in July, after falling 2.3 percent in the month before.
- (0900 ET/1300 GMT) Mexico releases gross fixed investment for the month of June
- (0945 ET/1345 GMT) Financial firm Markit releases final U.S. composite PMI for the month of August. The index printed a final reading of 55.2 in the previous month.
- (0945 ET/1345 GMT) Markit Economics reports final U.S. services PMI for the month of August. The index posted a final reading of 55.0 in July.
- (1000 ET/1400 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. non-manufacturing Purchasing Managers' index rose to a reading of 56.8 in August from 55.7 in July.
- (1000 ET/1400 GMT) The United States is likely to report that factory orders decreased 0.6 percent in July, after posting a fall of 0.7 percent in the prior month.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending August 31.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending August 31.
Key Events Ahead
- (1000 ET/1400 GMT) New York Fed President John C. Williams participates in a fireside chat focused on the regional and national economy and the New York Fed's outreach efforts.
- (1100 ET/1500 GMT) Bank of Russia's Elvira Nabiullina delivers the annual Michel Camdessus Central Banking Lecture at the International Monetary Fund in Washington D.C.
- (1230 ET/1630 GMT) Swiss National Bank Vice Chairman of the Governing Board Fritz Zurbrugg gives a speech at University of Lucerne
- (1445 ET/1845 GMT) Bank of Canada's Carolyn Wilkins will give a speech at Saskatchewan Trade and Export Partnership in Regina, Saskatchewan
FX Beat
DXY: The dollar index consolidated within narrow ranges ahead of a deadline for a potential new round of U.S. tariffs on another $200 billion of Chinese goods. The greenback against a basket of currencies trades flat at 95.11, having touched a low of 94.94 earlier, its lowest since August 31. FxWirePro's Hourly Dollar Strength Index stood at 5.79 (Neutral) by 1000 GMT.
EUR/USD: The euro declined, reversing early session gains after data showed German industrial orders fell unexpectedly in July on weak foreign demand, indicating that factories in Germany are facing the effects of U.S. President Donald Trump's protectionist trade policies. The European currency traded 0.1 percent down at 1.1617, having touched a low of 1.1530 on Tuesday, its lowest since Aug 23. FxWirePro's Hourly Euro Strength Index stood at 11.25 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1689 (August 31 High), a break above targets 1.1733 (August 28 High). On the downside, support is seen at 1.1594 (August 27 Low), a break below could drag it till 1.1545 (21-DMA).
USD/JPY: The dollar eased against the Japanese yen, amid growing concerns that U.S. President Donald Trump would impose further tariffs on $200 billion more of Chinese imports today when a public comment period on the new tariffs ends. The major was trading 0.1 percent down at 111.29, having hit a high of 111.75 the day before, its highest since August 30. FxWirePro's Hourly Yen Strength Index stood at -2.31 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. Markit service PMI and factory orders. Immediate resistance is located at 111.82 (August 29 High), a break above targets 112.15 (August 1 High). On the downside, support is seen at 110.96 (21-DMA), a break below could take it lower 110.43 (August 15 Low).
GBP/USD: Sterling gains, extending previous session's rebound, as concerns of a hard Brexit eased after Bloomberg reported yesterday that the German and British governments had abandoned key Brexit demands. However, uncertainty over the progress of the Brexit negotiations capped the upside in the British pound. The major traded 0.1 percent up at 1.2934, having hit a low of 1.2785 on Wednesday; it’s lowest since August 20. FxWirePro's Hourly Sterling Strength Index stood at 84.49 (Slightly Bullish) 0500 GMT. Immediate resistance is located at 1.2982 (September 5 High), a break above could take it near 1.3043 (August 30 High). On the downside, support is seen at 1.2855 (September 3 Low), a break below targets 1.2799 (August 24 Low). Against the euro, the pound was trading 0.2 percent up at 89.91 pence, having hit a low of 90.52 on Wednesday, it’s lowest since August 29.
USD/CHF: The Swiss franc rose, hovering further away from a 6-day low touched earlier in the week, as global trade concerns boosted the demand for safe-haven assets. The major trades 0.3 percent down at 0.9692, having touched a high of 0.9767 on Tuesday, it’s highest since August 29. FxWirePro's Hourly Swiss Franc Strength Index stood at 55.26 (Bullish) by 1000 GMT. On the higher side, near-term resistance is around 0.9735 (38.2% retracement of 0.9866 and0.9652) and any break above will take the pair to next level till 0.9785 (61.8% retracement). The near-term support is around 0.9665 and any close below that level will drag it till 0.9620.
Equities Recap
European shares advanced, boosted by gains among utility stocks, while the greenback traded within a narrow range amid worries U.S. will follow through on plans to impose an extra $200 billion of Chinese imports.
The pan-European STOXX 600 index gained 0.05 percent at 375.82 points, while the FTSEurofirst 300 index surged 0.1 percent to 1,468.72 points.
Britain's FTSE 100 trades 0.2 percent down at 7,372.30 points, while mid-cap FTSE 250 declined 0.1 percent to 20,360.96 points.
Germany's DAX rose 0.2 percent at 12,057.00 points; France's CAC 40 trades 0.3 percent higher at 5,274.01 points.
Commodities Recap
Crude oil rallied, supported by a weaker dollar and evidence of strong U.S. fuel demand, however, turmoil engulfing emerging markets and an escalation in the U.S. trade dispute with China limited upside. International benchmark Brent crude was trading 0.7 percent up at $77.62 per barrel by 1033 GMT, having hit a high of $79.69 on Tuesday, its highest since July 11. U.S. West Texas Intermediate was trading 0.2 percent higher at $68.85 a barrel, after rising as high as $71.37 on Tuesday, its highest since July 13.
Gold prices edged up, boosted by physical buying and as the dollar remained under pressure, amid worries of looming U.S. tariffs on China. Spot gold was up 0.7 percent at $1,205.25 at 1037 GMT, having touched a low of $1,189.55 on Tuesday, its lowest since August 24. U.S. gold futures rose 0.1 percent at $1,202 an ounce.
Treasuries Recap
The U.S. Treasuries remained nearly flat ahead of the country’s ADP non-farm employment data for the month of August and weekly initial jobless claims, scheduled to be released today by 12:15GMT and 12:30GMT respectively. The yield on the benchmark 10-year Treasuries hovered around 2.898 percent, the super-long 30-year bond yields flat at 3.074 percent and the yield on the short-term 2-year too traded steady at 2.649 percent .
The German bunds traded slightly higher during European session as investors wait to watch the country’s industrial production and trade balance for the month of July, scheduled to be released on September 7 by 06:00GMT and 09:00GMT respectively. The German 10-year bond yields, which move inversely to its price, slipped 1/2 basis point to 0.374 percent, the yield on 30-year note also fell 1/2 basis point to 1.050 percent and the yield on short-term 2-year traded nearly 1-1/2 basis points lower at -0.580 percent.
The Japanese government bonds traded tad higher during late Asian session as investors expect to see a decline in the country’s household spending data for the month of July, scheduled to be released today by 23:30GMT for further insight into the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, traded 1/2 basis point lower at 0.109 percent, the yield on the long-term 30-year note also slipped 1/2 basis point to 0.842 percent and the yield on short-term 2-year hovered around -0.114 percent.
The Australian bonds traded mixed as investors remained sidelined amid a muted trading day that is scheduled to witness data of little economic significance. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose nearly 1 basis point to 2.572 percent, the yield on the long-term 30-year bond traded flat at 3.080 percent and the yield on short-term 2-year slumped 1-1/2 basis points to 1.999 percent.
