Market Roundup
- EUR/USD +0.09%, USD/JPY -0.13%, GBP/USD +0.11%, EUR/GBP -0.08%
- DXY -0.32%, DAX -0.54%, FTSE -0.08%, Brent -0.04%, Gold +0.47%
- Houston crippled by catastrophic flood, mass evacuations ordered
- U.S. gasoline surges as Tropical Storm Harvey closes refineries
- Japan government keeps upbeat economy view, signals 2nd longest expansion
- Eurozone Jul M3 SA 4.5% vs 5%, forecast 4.9%
- Kuroda: Japan's 4% growth rate not sustainable
- Kuroda: Inflation far away from 2% target
- Gold climbs to one-week high after central bankers' comments
Economic Data Preview
- (0830 ET/1230 GMT) The U.S. Commerce Department will report its preliminary wholesale inventories for the month of July. The indicator rose 0.7 percent in June.
- (0830 ET/1230 GMT) The United States releases goods trade balance data for the month of July. The economy recorded a trade deficit of $64.0 billion in the previous month.
- (0900 ET/1300 GMT) Mexico's statistics agency publishes trade balance data for the month of July. The economy posted a $438 million trade deficit in June when adjusted for seasonal swings, while on non-seasonally adjusted terms, it posted a trade surplus of $62 million.
- (1030 ET/1430 GMT) The Dallas Fed releases its Manufacturing Business Index for the month of August. The index posted a rise of 16.8 percent in the previous month.
- (1930 ET/2330 GMT) Japan's Statistics Bureau is expected to report that unemployment rate remained unchanged at 2.8 percent for the month of July.
- (1930 ET/2330 GMT) Japan's overall household spending probably rose at an annualized rate of 0.7 percent in July after rising 2.3 percent in June.
Key Events Ahead
- N/A British Brexit negotiators start their second monthly week of talks with EU counterparts in Brussels on the terms of Britain's withdrawal from the European Union in 2019.
- (1145 ET/ 1545 GMT) FedTrade operation 30-year Ginnie Mae (max $1.475 bn)
FX Beat
DXY: The dollar weakened versus its major peers as rising uncertainty over the U.S. President Donald Trump's promised pro-growth economic agenda and fading prospects of a third Fed rate hike action in 2017 continued to weigh on dollar bulls sentiment. The greenback against a basket of currencies traded 0.1 percent down at 92.41, having touched a low of 92.36 earlier, it’s lowest since May 3 2016. FxWirePro's Hourly Dollar Strength Index stood at -71.78 (Highly Bearish) by 1000 GMT.
EUR/USD: The euro rallied to a 2-1/2-year high after the European Central Bank Presiden Mario Draghi held back from talking down the strong currency at the Jackson Hole Symposium. Moreover, ongoing U.S. dollar weakness against its major peers also underpinned the upward momentum around the major. The European currency traded 0.1 percent up at 1.1933, having touched a high of 1.1959 earlier, its highest since Jan. 2015. FxWirePro's Hourly Euro Strength Index stood at 85.59 (Slightly Bullish) by 1000 GMT. Immediate resistance is located at 1.1959 (Session High), a break above targets 1.2000. On the downside, support is seen at 1.1890 (78.6% retracement 1.1661 and 1.1959), a break below could drag it near 1.1845 (61.8% retracement 1.1661 and 1.1959).
USD/JPY: The dollar slumped against the Japanese yen as the Federal Reserve Chair Janet Yellen maintained silence on the monetary policy at Jackson Hole Symposium. Moreover, increasing worries over the impact of Tropical Storm Harvey on the U.S. economy strengthened safe-haven assets. The major was trading 0.1 percent down at 109.22, having hit a low of 108.60 on Aug.18, its lowest since Apr. 19 2016. FxWirePro's Hourly Yen Strength Index stood at -67.84 (Bearish) by 1000 GMT. Immediate resistance is located at 109.39 (78.6% retracement of 112.19 and 108.60), a break above targets 109.99 (61.8% retracement of 112.19 and 108.80). On the downside, support is seen at 109.00, a break below could take it near 108.84 (August 24 Low).
GBP/USD: Sterling rose to a near 2-week high as the greenback continued to nurse losses against its major peers, in response to Federal Reserve Chair Janet Yellen’s failure to provide insights on the monetary policy outlook at the Jackson Hole Symposium last Friday. The major traded 0.2 percent up at 1.2898, having hit a high of 1.2924 earlier, its highest since August 15. FxWirePro's Hourly Sterling Strength Index stood at -6.70 (Neutral) by 1000 GMT. Immediate resistance is located at 1.2950, a break above could take it near 1.2918 (21-DMA). On the downside, support is seen at 1.2865 (10-DMA), a break below targets 1.2838 (5-DMA). Against the euro, the pound was trading flat at 92.55 pence, having hit a 10-1/2 month low of 92.70 pence in the prior session.
USD/CHF: The Swiss franc rallied to a 1-month high as the greenback slumped after the Fed Chair Janet Yellen's speech at the much awaited Jackson Hole Symposium made no reference to the central bank's monetary policy. The major trades 0.2 percent down at 0.9537, having touched a low of 0.9526 earlier, it’s lowest since Jul. 27. FxWirePro's Hourly Swiss Franc Strength Index stood at 55.58 (Bullish) by 1000 GMT. The pair is facing near term support at 0.9500 and any close below will drag the pair till 0.94370. On the higher side, upside capped at 0.9593 (61.8% retracement of 0.9699 and 0.9527) and any break above will take the pair till 0.9634/0.9669.
AUD/USD: The Australian dollar climbed, extending previous session gains, with the greenback declined after Fed Chair Janet Yellen didn't mention about the central bank's monetary policy path at Jackson Hole Symposium, Wyoming. The Aussie trades 0.2 percent up at 0.7940, having hit a high of 0.7954 last week, it’s strongest since Aug. 18. FxWirePro's Hourly Aussie Strength Index stood at 38.76 (Neutral) by 1000 GMT. Immediate support is seen at 0.7916 (21-DMA), a break below targets 0.7898. On the upside, resistance is located at 0.7960, a break above could take it near 0.8000.
Equities Recap
European shares declined as Hurricane Harvey spurred worries along the U.S. Gulf coast, while the euro strengthened after ECB President Mario Draghi did not express concern about a strong currency in a speech at a central bankers meeting.
The pan-European STOXX 600 index declined 0.4 percent to 372.43 points, while the FTSEurofirst 300 index slumped 0.4 percent to 1,464.29 points.
Germany's DAX fell 0.7 percent at 12,028.67 points; France's CAC 40 trades 0.5 percent lower at 5,080.10 points.
Britain's markets remained closed for a holiday.
Commodities Recap
Crude oil prices traded in a volatile market after Hurricane Harvey spurred worries along the U.S. Gulf coast over the weekend, and taking out numerous refineries and some crude production. International benchmark Brent crude was trading 0.1 percent up at $52.41 per barrel by 0937 GMT, having hit a high of $52.68 last week, its strongest since Aug. 21. U.S. West Texas Intermediate was trading 1.0 percent down at $47.35 a barrel, after rising as high as $48.48 last week, its highest since Aug. 21.
Gold prices rallied to its highest in over a week as the dollar nursed losses after comments from key central bankers at an economic policy meeting in the United States. Spot gold rose 0.4 percent to $1,296.57 an ounce by 0940 GMT, after reaching its highest since Aug. 18 at $1,298.49 earlier. U.S. gold futures for December delivery were up 0.4 percent to $1,302.90 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.167 percent higher by 0.003 bps, while 5-year yield was 0.003 bps up at 1.755 percent.
The German bunds traded flat in European session Monday as investors wait to watch the 2-year auction, scheduled to be held on August 29 by 09:35GMT. Also, the country’s consumer price inflation for the month of August, due by August 30 will provide further direction to the debt market. The benchmark German 10-year bond yields, which moves inversely to its price hovered around 0.38 percent, the yield on long-term 30-year note rose nearly 1 basis point to 1.15 percent and the yield on short-term 2-year traded flat at -0.74 percent.
The Japanese government bonds slightly gained Monday as investors poured into safe-haven assets after North Korea launched three short-range ballistic missiles from its east coast into the sea, beginning at 5:40 p.m. EST Friday over a period lasting an hour, according to the U.S. Pacific Command. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped 1/2 basis point to 0.01 percent, the yield on long-term 30-year hovered around 0.84 percent and the yield on short-term 2-year traded flat at -0.15 percent.
The New Zealand bonds ended Monday’s session on a flat tone as investors remain side-lined in any major trading activity amid lack of economically significant data. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 2.92 percent, the yield on 7-year note remained tad higher at 2.76 percent while the yield on short-term 2-year ended flat at 2.05 percent.
The Australian bonds lost as investors wait to watch the Reserve Bank of Australia (RBA) Governor Philip Lowe’s speech, scheduled to be held on August 30 amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury note, rose nearly 1 basis point to 2.666 percent, the yield on 15-year note hovered around 2.96 percent and the yield on short-term 2-year traded flat at 1.84 percent.
