Market Roundup
- EUR/USD 0.36%, USD/JPY 0.16%, GBP/USD 0.26%, EUR/GBP 0.09%
- DXY -0.34%, DAX 0.65%, FTSE -0.15%, Brent 0.17%, Gold 0.23%
- Trump demands Fed help on economy, complains about interest rate rises
- Trump doesn't expect much from China trade talks this week
- China says won't resort to strong stimulus but will keep liquidity ample
- Turkish lira weakens after Trump says 'no concessions'
- UK budget surplus in July eases headache for Hammond
- Great Britain Aug CBI - Orders, 7, 9 forecast, 11 previous
- Japan, China seek to restart FX swap line in sign of warming ties - Kyodo
- Iraq to ask U.S. for exemptions on some Iran sanctions
- Gold at 1-week high as Trump's Fed criticism weighs on dollar
Economic Data Ahead
- (0830 ET/1230 GMT) Statistics Canada will release its wholesale trade figures for the month of June. The indicator is likely to have increased by 0.8 percent, after unexpectedly rising 1.2 percent in May.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index plunged following critical comments by U.S. President Donald Trump about the country's central bank. The greenback against a basket of currencies trades 0.2 percent down at 95.58, having touched a low of 95.44 earlier, its lowest since August 9. FxWirePro's Hourly Dollar Strength Index stood at -45.95 (Neutral) by 1000 GMT.
EUR/USD: The euro surged to a near 2-week peak as the greenback tumbled after U.S. President Donald Trump criticized the Federal Reserve Chairman Jerome Powell for raising interest rates. The European currency traded 0.4 percent up at 1.1525, having touched a high of 1.1542 earlier, its highest since August 9. FxWirePro's Hourly Euro Strength Index stood at 63.88 (Bullish) by 1000 GMT. Immediate resistance is located at 1.1558 (78.6% retracement of 1.1628 and 1.1301), a break above targets 1.1628 (August 8 High). On the downside, support is seen at 1.1454 (10-DMA), a break below could drag it till 1.1397 (5-DMA).
USD/JPY: The dollar rebounded from an 8-week low touched earlier in the day as investors dumped safe haven assets ahead of the United States and China talks this week that may help ease their dispute over trade. The major was trading 0.2 percent up at 110.27, having hit a low of 109.77, its lowest since June 27. FxWirePro's Hourly Yen Strength Index stood at -64.35 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, amid a lack of significant economic data from the U.S. docket. Immediate resistance is located at 110.42 (38.2% retracement of 111.43 and 109.77), a break above targets 110.80 (61.8% retracement). On the downside, support is seen at 109.68 (June 27 Low)., a break below could take it lower 109.36 (June 26 Low).
GBP/USD: Sterling rallied to an over 1-week peak as the British Brexit minister headed to Brussels to commence a series of talks aimed at averting the UK leaving the European Union without a trade deal. Moreover, data showing Britain recorded its biggest budget surplus for the month of July in 18 years, at 2.0 billion pounds, above a forecast of 1.1 billion pounds underpinned the British pound. The major traded 0.3 percent up at 1.2834, having hit a high of 1.2843; it’s highest since August 6. FxWirePro's Hourly Sterling Strength Index stood at 11.81 (Neutral) 1000 GMT. Immediate resistance is located at 1.2857 (38.2% retracement of 1.3173 and 1.2661), a break above could take it near 1.2917 (50.0% retracement). On the downside, support is seen at 1.2733 (5-DMA), a break below targets 1.2660. Against the euro, the pound was trading 0.1 percent down at 89.79 pence, having hit a low of 90.02, it’s lowest since August 9.
USD/CHF: The Swiss franc rose to a 3-week peak as the greenback eased after Trump stated that he was not thrilled with Jerome Powell's interest rate hikes. The major trades 0.4 percent down at 0.9873, having touched a low of 0.9867 earlier, it’s lowest since August 9. FxWirePro's Hourly Swiss Franc Strength Index stood at -29.15 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 1.0010 (July 20 High) and any break above will take the pair to next level till 1.0043 (July 19 High). The near-term support is around 0.9857 (July 9 Low) and any close below that level will drag it till 0.9825 (June 14 Low).
Equities Recap
European shares gained, boosted by a bounce across defensive sectors, while the greenback declined as investors turned cautious before trade talks between the United States and China later in the week.
The pan-European STOXX 600 index advanced 0.4 percent at 384.38 points, while the FTSEurofirst 300 index surged 0.4 percent to 1,504.90 points.
Britain's FTSE 100 trades 0.1 percent down at 7,582.41 points, while mid-cap FTSE 250 gained 0.4 percent to 20,608.63 points.
Germany's DAX rose 0.6 percent at 12,406.60 points; France's CAC 40 trades 0.7 percent higher at 5,417.87 points.
Commodities Recap
Crude oil prices rose, as U.S. sanctions on Iran offset concern about the outlook for demand. International benchmark Brent crude was trading 0.2 percent up at $72.28 per barrel by 1022 GMT, having hit a low of $70.28 on Wednesday, its lowest since April 10. U.S. West Texas Intermediate was trading 1.8 percent lower at $65.40 a barrel, after falling as low as $64.45 on Thursday, its lowest since June 21.
Gold prices rallied to a 1-week high on the back of a weaker U.S. dollar after U.S. President Donald Trump stated that he was not thrilled with the Federal Reserve for hiking interest rates. Spot gold rose 0.3 percent to $1,193.48 an ounce at 1024 GMT, having touched a high of $1196.25 earlier, its highest since August 14. U.S. gold futures climbed 0.5 percent to $1,200.60 an ounce.
Treasuries Recap
The U.S. Treasuries slumped as China and the United States agree to resume their trade talks, leading to optimism among investors and a rise in risk sentiments. The yield on the benchmark 10-year Treasuries jumped 2 basis points to 2.84 percent, the super-long 30-year bond yields surged close to 2-1/2 basis points to 3.00 percent and the yield on the short-term 2-year traded nearly 1-1/2 basis points higher at 2.60 percent.
The German bunds plunged during European session as investors wait to watch the country’s 10-year auction, scheduled to be held on August 22, besides, the manufacturing PMI for the month of August, due on the following day. The German 10-year bond yields, which move inversely to its price, rose 1/2 basis point to 0.30 percent, the yield on 30-year note also climbed 1/2 basis point to 0.97 percent and the yield on short-term 2-year hovered around -0.62 percent.
The New Zealand bonds closed lower as investors are expecting an ease in the global political and trade war fears ahead of the country’s GlobalDairyTrade (GDT) price auction and retail sales for the second quarter of this year, both scheduled to be released later today. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, jumped nearly 2 basis points to 2.618 percent, the yield on the long-term 20-year note also surged nearly 2 basis points to 2.938 percent and the yield on short-term 2-year also closed nearly 1-1/2 basis points higher at 1.733 percent.
The Japanese government bonds remained narrowly mixed amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around 0.092 percent, the yield on the long-term 30-year note fell 2 basis points to 0.83 percent and the yield on short-term 2-year remained tad higher at -0.123 percent.
The Australian bonds fell across the curve during early Asian session as investors’ risk appetite recovered following the U.S.-China trade talks, lifting the 10-year yield from this year’s low seen yesterday. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 1/2 basis point to 2.536 percent, the yield on the long-term 30-year bond also climbed 1 basis point to 3.039 percent and the yield on short-term 2-year remained 2 basis points higher at 2.013 percent.
