Market Roundup
EUR/USD -0.21%, USD/JPY +0.34%, GBP/USD -0.05, EUR/GBP -0.18%
DXY +0.31%, DAX +0.08%, FTSE -0.08%, Brent -1.39%, Gold -0.47%
Global use of euro declines further on political risk: ECB
Recent euro, bond volatility not significant: Coeure
British PM May finds it lonely at the top, but battles on - for now
Eurozone businesses lost some momentum in June but still strong -PMI
Eurozone Jul Markit Composite Final PMI, 56.3 vs forecast 55.7, previous 55.7
Eurozone Jul Markit services Final PMI, 55.4 vs forecast 54.7, previous 54.7
Eurozone May Retail Sales y/y, +2.6% vs forecast +2.3%, previous +2.5%, revised+2.6%
Weaker services slow down German private-sector growth in June - PMI
Germany Jul Markit Composite Final PMI, 56.4 vs forecast 56.1, previous 56.1
Germany Jul Markit services PMI, 54.0 vs forecast 53.7, previous 53.7
Optimism ebbs among UK services firms as growth slows in June-PMI
Great Britain Jun Markit/CIPS services PMI, 53.4 vs forecast 53.5, previous 53.8
Take Two for Trump in talks with unnerved European allies
Arab states to deliver verdict on Qatar as compromise elusive
N. Korea says its ICBM can carry nuclear warhead; U.S. calls for global action
BOJ to cut inflation forecasts, hold off on easing - sources
Japan June services PMI 53.3, highest since Aug ’15, May 53.0
Japan June composite PMI off to 52.9, May 53.4
Oil slips after eight-session bull-run on rising OPEC exports, strong dollar
Stronger dollar pushes gold lower ahead of Fed minutes
Economic Data Ahead
(0900 ET/1300 GMT) Mexico releases gross fixed investment and consumer confidence data.
(1000 ET/1400 GMT) The Commerce Department is likely to report that orders for U.S. factory goods for May tumbled by 0.5 percent, after declining 0.2 percent in April.
(1000 ET/1400 GMT) The Investor's Business Daily (IBD)/ TechnoMetrica Institute of Policy and Politics (TIPP) will release its Economic Optimism Index for the month of July. The indicator stood at 51.3 in the prior month.
(1630 ET/2030 GMT) API reports its weekly crude oil stock.
(1950 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending June 26.
(1950 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending June 26.
Key Events Ahead
(1145 ET/1545 GMT) FedTrade Operation 30-Year Ginnie Mae (max $1.05 bn)
(1400 ET/1800 GMT) The Federal Open Market Committee issues minutes of its June 13-14 policy meeting,
FX Beat
DXY: The dollar rebounded across the board as investors’ awaited minutes from the Federal Reserve's latest meeting. The greenback against a basket of currencies traded 0.1 percent up at 96.35, having touched a high of 96.57 earlier, it’s highest since June 28. FxWirePro's Hourly Dollar Strength Index stood at 106.46 (Highly Bullish) by 1000 GMT.
EUR/USD: The euro declined, extending losses for the fourth consecutive session after data showed Eurozone businesses lost some momentum in June. The economy's final composite Purchasing Managers' Index came in at 56.3 in June, down from May’s 56.8. The European currency traded 0.2 percent down at 1.1320, having touched a low of 1.1312 earlier, its lowest since Jun 28. FxWirePro's Hourly Euro Strength Index stood at -64.50 (Bearish) by 1000 GMT. On the lower side, major near-term support is around 1.1290 and any break below will drag the pair till 1.1260 (21- EMA)/1.1200. On the higher side, major resistance is around 1.1450 and any break above will take it till 1.1500/1.1545.
USD/JPY: The dollar rose to a fresh 1-1/2 month high as markets awaited the Federal Open Market Committee (FOMC) meeting minutes for further insights on the U.S. monetary policy outlook. The major traded 0.3 percent up at 113.63, having hit a high of 113.68 earlier, its highest since May 16. FxWirePro's Hourly Yen Strength Index stood at -81.30 (Slightly Bearish) by 1000 GMT. The near term resistance is around 114.36 and any break above targets 115.50. The pair is facing near-term support at 111.75 (100- day MA) and any break below 111.75 will drag it down till 110.95/110.
GBP/USD: Sterling tumbled to a 1-week low after a weak reading of Britain's services sector raised doubts whether the Bank of England would hike record-low interest rates for the first time in ten years. The economy's services PMI slumped to 53.4 in June against a 53.8 reading recorded in May. Sterling traded down at 1.2914, having hit a low of 1.2893 earlier, its lowest since June 28. FxWirePro's Hourly Sterling Strength Index stood at 101.65 (Highly Bullish) by 1000 GMT. The pair should break above 1.3050 for further bullishness and any violation above will take it 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 1.2900 and any break below will drag it down till 1.2846 (21- day EMA)/1.2810 (daily Kijun-Sen). Against the euro, the pound traded 0.1 percent up at 87.70 pence, having hit a 7-month low of 88.79 on Thursday.
USD/CHF: The Swiss franc declined to a 1-week low as the greenback rebounded versus its major peers. The major trades 0.2 percent up at 0.9669, having touched a high of 0.9688 earlier, it’s highest since Jun. 27. FxWirePro's Hourly Swiss Franc Strength Index stood at -128.72 (Highly Bearish) by 1000 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. 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 tumbled below the 0.7600 handle as a fresh wave of greenback buying interest weakened the bid tone around the major. The Aussie trades 0.1 percent down at 0.7598, having hit a low of 0.758 earlier, it’s weakest since Jul. 28. FxWirePro's Hourly Aussie Strength Index stood at -160.99 (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, weighed down by weak healthcare stocks and utilities, while greenback dollar rebounded across the board ahead of minutes from the Federal Reserve's latest meeting release.
The pan-European STOXX 600 index rose 0.05 percent to 382.50 points, while the FTSEurofirst 300 index lost 0.04 percent to 1,503.19 points.
Britain's FTSE 100 trades 0.03 percent up at 7,358.78 points, while mid-cap FTSE 250 gained 0.5 percent to 19,406.66 points.
Germany's DAX rose 0.1 percent at 12,449.68 points; France's CAC 40 trades 0.1 percent lower at 5,179.62 points.
Commodities Recap
Crude oil prices fell by more than one percent, halting their longest bull run in over five years, as rising OPEC exports and a stronger dollar weighed heavily on investor sentiment. International benchmark Brent crude was trading 1.3 percent down at $49.02 per barrel by 1019 GMT, having hit a high of $49.87 the prior day, its strongest since Jun. 7. U.S. West Texas Intermediate traded 1.4 percent lower at $46.41 a barrel, after rising as high as $47.29 the day before, its strongest since Jun 6.
Gold prices declined to a fresh 8-week low as the dollar rallied ahead of the minutes from the Federal Reserve's last meeting release. Spot gold tumbled 0.3 percent to $1,219.24 per ounce at 1022 GMT, having touched a low of $1,217.28 an ounce earlier, its weakest since May 11. U.S. gold futures for August delivery climbed 0.5 percent to $1,225.20 per ounce.
Treasuries Recap
The U.S. Treasuries remained nearly flat ahead of the Federal Open Market Committee (FOMC) meeting minutes, scheduled for later in the day. Also, FOMC member Williams’ speech on July 6 will add further value and direction to the debt market. The yield on the benchmark 10-year Treasury, hovered around 2.34 percent, the super-long 30-year bond yields remained almost flat at 2.86 percent and the yield on short-term 2-year note traded tad higher at 1.41 percent.
The UK gilts plunged as investors remained cautious ahead of the country’s 10-year auction, scheduled to be held on July 6 will add more clarity to the debt market. However, market participants have largely shrugged-off the lower-than-expected services PMI for the month of June. The yield on the benchmark 10-year gilts, jumped 3 basis points to 1.28 percent, the super-long 30-year bond yields climbed nearly 3-1/2 basis points to 1.89 percent and the yield on the short-term 3-year traded 1 basis points higher at 0.42 percent.
The Eurozone periphery bonds lost ground after reading higher-than-expected retail sales for the month of May, released today. The benchmark German 10-year bond yields, rose 1 basis point to 0.48 percent, the French 10-year bond yields traded tad higher at 0.83 percent, Irish 10-year bond yields hovered around 0.88 percent, Italian jumped nearly 2 basis points to 2.13 percent, Netherlands 10-year bond yield up 1 basis point to 0.67 percent, Portuguese equivalents flat at 2.96 percent and the Spanish 10-year yields traded nearly 2 basis points higher at 1.54 percent.
The Japanese government bonds disappointed as investors remained cautious ahead of the 30-year auction, scheduled to be held on July 6. Also, the 10-year auction, held earlier today failed to spur demand for safe-haven assets, leading to further sluggishness in the bond prices. The benchmark 10-year bond yield, rose nearly 1 basis point to 0.06 percent, the long-term 30-year bond yields hovered around 0.82 percent and the yield on the short-term 2-year note traded nearly 1/2 basis point higher at -0.12 percent.
The New Zealand bonds ended higher as investors wait to watch the country’s GlobalDairyTrade (GDT) price auction, scheduled to be held later today amid a silent trading week. At the time of closing, the yield on the benchmark 10-year bond, slumped 2-1/2 basis points to 3.02 percent, the yield on 7-year note also plunged 2-1/2 basis points to 2.92 percent and the yield on short-term 2-year note ended 4 basis points lower at 2.08 percent.
The Australian bonds plunged despite strong demand being observed at a government auction after 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, jumped 2 basis points to 2.59 percent, the yield on 15-year note also climbed 2 basis points to 2.94 percent and the yield on short-term 2-year traded 1-1/2 basis points higher at 1.70 percent.
