Market Roundup
- EUR/USD 0.09%, USD/JPY -0.04%, GBP/USD 0.08%, EUR/GBP -0.01%
- DXY -0.12%, DAX -0.2%, FTSE -0.58%, Brent 0.89%, Gold 0.46%
- EZ Jun Money-M3 Annual Growth, 4.4%, 4.0% forecast, 4.0% previous
- EZ Jun Loans to Households, 2.9%, 2.9% previous
- EZ Jun Loans to Non-Fin, 4.1%, 3.6% previous
- Germany Jul Ifo Business Climate New, 101.7, 101.5 forecast, 101.8 previous
- Germany Jul Ifo Current Conditions New, 105.3, 104.8 forecast, 105.1 previous, 105.2 revised
- Germany Jul Ifo Expectations New, 98.2, 98.1 forecast, 98.6 previous, 98.5 revised
- France Jun Producer Prices (mm), 0.1%, 0.6% previous
- Great Britain Jul CBI Distributive Trades, 20, 15 forecast, 32 previous
- U.S. economy likely peaked in Q2; trade the top worry
- Eurozone business lending growth hit post-crisis high
- Trump's trade policy darkens German corporate mood in July
- UK mortgage approvals hit 9-month high in June - UK Finance
- China's trade frictions with U.S. spell uncertainty for jobs, state planner warns
- Oil rises for second day as U.S. crude inventories fall
- Gold steadies near 1-year low as dollar slips
Economic Data Ahead
- (1000 ET/1400 GMT) The U.S. new single-family home sales are expected to have declined 2.8 percent to a seasonally adjusted annual rate of 670,000 units in June. New home sales rose 6.7 percent in May to a seasonally adjusted annual rate of 6,890 units.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending July 16.
Key Events Ahead
- N/A President Trump meets with European Commission President Juncker
- (1130 ET/1530 GMT) Treasury auctions $18 bn new 2-year floating rate notes
- (1300 ET/1700 GMT) Treasury auctions $36 bn 5-year notes
- (1600 ET/2000 GMT) European Commission President Juncker address the Center for Strategic and International Studies; Washington, DC
FX Beat
DXY: The dollar index eased, extending losses of the previous session ahead of a meeting between U.S. President Donald Trump and European Commission President Jean-Claude Juncker to discuss trade-related issues. The greenback against a basket of currencies trades 0.1 percent down at 94.50, having touched a low of 94.21 on Monday, its lowest since July 11. FxWirePro's Hourly Dollar Strength Index stood at -136.80 (Highly Bearish) by 1000 GMT.
EUR/USD: The euro gained after data showed lending growth to euro zone companies rallied to a post-crisis high in June, while a broader indicator of money circulating in the euro area surged unexpectedly. The European currency traded 0.1 percent up at 1.1691, having touched a high of 1.1750 on Monday, its highest since July 11. FxWirePro's Hourly Euro Strength Index stood at -30.08 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1762 (June 10 High), a break above targets 1.1801 (June 13 High). On the downside, support is seen at 1.1649 (July 12 Low), a break below could drag it till 1.1600.
USD/JPY: The dollar slumped, extending losses for the sixth straight session after a Reuters survey indicated that a now-robust U.S. economy will soon lose momentum on rising interest rates and escalating trade disputes. The major was trading 0.1 percent down at 111.11, having hit a low of 110.75 on Monday, its lowest since July 9. FxWirePro's Hourly Yen Strength Index stood at 62.45 (Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, as U.S. new home sales figures. Immediate resistance is located at 111.84 (5-DMA), a break above targets 112.12 (10-DMA). On the downside, support is seen at 110.75 (July 24 low), a break below could take it lower 110.27 (July 4 Low).
GBP/USD: Sterling rallied to an over 1-week peak as investors speculated that Prime Minister Theresa May's decision to take control of Brexit negotiations would make it easier to agree on a separation deal with Brussels. The major traded 0.2 percent up at 1.3164, having hit a high of 1.3173 earlier; it’s highest since July 17. FxWirePro's Hourly Sterling Strength Index stood at 76.76 (Slightly Bullish) 1000 GMT. Immediate resistance is located at 1.3180, a break above could take it near 1.3244 (July 12 High). On the downside, support is seen at 1.3090 (5-DMA), a break below targets 1.3010 (July 18 Low). Against the euro, the pound was trading 0.1 percent up at 88.85 pence, having hit a high of 88.77 earlier, it’s highest since July 18.
USD/CHF: The Swiss franc surged as investors turned cautious ahead of a meeting between the U.S. and European Commission presidents. The major trades 0.2 percent down at 0.9925, having touched a low of 0.9901 on Monday, it’s lowest since July 9. FxWirePro's Hourly Swiss Franc Strength Index stood at 8.29 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9973 (10-DMA) and any break above will take the pair to next level till 1.0040. The near-term support is around 0.9884 (July 6 Low) and any close below that level will drag it till 0.9857 (July 9 Low).
Equities Recap
European shares tumbled, weighed down by trade worries, while the greenback scaled back as investors braced for a crucial meeting in Washington between the European Commission President and U.S. President Donald Trump.
The pan-European STOXX 600 index declined 0.05 percent at 388.03 points, while the FTSEurofirst 300 index plunged 0.2 percent to 1,518.81 points.
Britain's FTSE 100 trades 0.6 percent down at 7,658.44 points, while mid-cap FTSE 250 eased 0.3 percent to 20,795.95 points.
Germany's DAX fell 0.2 percent at 12,665.52 points; France's CAC 40 trades 0.05 percent higher at 5,437.40 points.
Commodities Recap
Crude oil prices rose, extending previous session gains after data showed U.S. crude inventories fell more than expected, easing worries about oversupply that weighed on market sentiments. International benchmark Brent crude was trading 0.6 percent up at $74.01 per barrel by 1041 GMT, having hit a high of $74.47 on Monday, its highest since July 16. U.S. West Texas Intermediate was trading 0.2 percent lower at $68.60 a barrel, after falling as low as $67.08 last week, its lowest since June 22.
Gold prices edged higher as the dollar tumbled ahead of a meeting between the U.S. and European Commission presidents to discuss trade-related issues. Spot gold was 0.5 percent up at $1,230.73 an ounce at 1043 GMT, having hit a low of $1,211.26 on Thursday, its lowest since early July 2017. U.S. gold futures for August delivery were 0.1 percent higher at $1,226.20 an ounce.
Treasuries Recap
The U.S. Treasuries remained tad higher as investors wait to watch the country’s 5-year bond auction, scheduled to be held today by 17:00GMT, besides, the meeting between President Donald Trump and European Commission President Claude Juncker, later in the day. The yield on the benchmark 10-year Treasuries slipped nearly 1 basis point to 2.94 percent, the super-long 30-year bond yields also slid close to 1 basis point to 3.06 percent and the yield on the short-term 2-year too traded nearly 1 basis point lower at 2.64 percent.
The German bunds remained nearly stable during European session Wednesday after the country’s Ifo business climate index for the month of July beat market expectations, albeit remaining an inch lower than the previous reading in June. The German 10-year bond yields, which move inversely to its price, remained tad lower at 0.39 percent, the yield on 30-year note slipped 1/2 basis point to 1.04 percent and the yield on short-term 2-year remained nearly flat at -0.61 percent.
The New Zealand bonds closed higher after the country’s trade balance for the month of June, released late yesterday, worsened beyond market expectations, remaining lower than the previous reading in May as well. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slumped a little over 3 basis points to 2.81 percent, the yield on the long-term 20-year note slipped 1 basis point to 3.11 percent while the yield on short-term 2-year closed flat at 1.85 percent.
The Japanese government bonds surged, tracking the unlimited debt-buying by the Bank of Japan (BoJ) earlier this week amid market speculation over a possible change in the monetary policy stance by the central bank ahead of the two-day meeting on July 30-31. The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, fell 1-1/2 basis points to 0.07 percent, the yield on the long-term 30-year also slumped nearly 1-1/2 basis points to 0.78 percent and the yield on short-term 2-year too remained close to 1-1/2 basis point lower at -0.12 percent.
The Australian government bonds gained on after lower-than-expected Q2 headline consumer inflation data erased market expectations of the Reserve bank of Australia (RBA) near-term interest rate hike hopes. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 3 basis points to 2.691 percent, the yield on the long-term 30-year Note dipped 3-1/2 basis points to 3.166 percent and the yield on short-term 2-year down 2 basis points to 2.054 percent.
