Market Roundup
- EUR/USD -0.54%, USD/JPY -0.08%, GBP/USD -0.41%, EUR/GBP -0.11%
- DXY 0.56%, DAX -1.74%, FTSE -0.78%, Brent 0.04%, Gold -0.19%
- Turkish lira crashes to a record low on worries over the economy, U.S. row
- U.S. curbs on Russian banks would be an act of economic war - PM
- Great Britain Q2 GDP Prelim YY, 1.3%, 1.3% forecast, 1.2% previous
- Great Britain Q2 GDP Prelim QQ, 0.4%, 0.4% forecast, 0.2% previous
- Great Britain Jun Industrial Output YY, 1.1%, 0.7% forecast, 0.8% previous, 1.2% revised
- Great Britain Jun Manufacturing Output YY, 1.5%, 1.0% forecast, 1.1% previous, 1.5% revised
- Great Britain Jun Goods Trade Balance (GBP), -11.38 bln, -12.05 bln forecast, -12.36 bln previous, -12.53 bln revised
- Pound pummeled by a stronger dollar, mounting Brexit fears
- Russian rouble crashes past two-year lows on U.S. sanction fears
- IEA says calm in oil markets could be short-lived
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. consumer price index likely increased 0.2 percent in July, after rising 0.1 percent in June, while in the 12 months through July, the CPI is expected to have risen 3.0 percent, compared with a 2.9 percent increase in the previous month. Excluding food and energy, the core CPI probably rose 0.2 percent, matching the gain in the previous month.
- (0830 ET/1230 GMT) The Statistics Canada releases the employment report for July. The economy probably added 17,000 jobs, compared to a rise of 31,800 jobs in June, while the participation rate is expected to edge down to 65.4 percent from 65.5 percent in the previous month.
- (0830 ET/1230 GMT) Canada's unemployment rate is expected to edge down to 5.9 percent in July from 6 percent in the month before,
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
- (1400 ET/1800 GMT) The U.S. reports its monthly budget statement for the month of July. The government is likely to show a budget deficit widened to $77 billion in July from $75 billion in June.
Key Events Ahead
- No significant event scheduled
FX Beat
DXY: The dollar index rallied to multi-month peaks ahead of U.S. consumer price inflation data for July, which is likely to show inflation increased 0.2 percent, after rising 0.1 percent in June. The greenback against a basket of currencies trades 0.4 percent up at 96.00, having touched a high of 96.17 earlier, its highest since July 2017. FxWirePro's Hourly Dollar Strength Index stood at 54.67 (Bullish) by 1000 GMT.
EUR/USD: The euro tumbled an over 1-year low after the European Central Bank expressed concerns about the banks in Spain, Italy and France and their exposure to a slide in the Turkish lira. The Turkish currency hit another record low against the dollar as a rift between Turkey and the United States widened. The European currency traded 0.5 percent down at 1.1468, having touched a low of 1.1432, its lowest since July 2017. FxWirePro's Hourly Euro Strength Index stood at -84.35 (Slightly Bearish) by 1000 GMT. Immediate resistance is located at 1.1478 (23.6% retracement of 1.6282 and 1.1432), a break above targets 1.1655 (21-DMA). On the downside, support is seen at 1.1410, a break below could drag it till 1.1380.
USD/JPY: The dollar plunged to a 2-week low as a flight from risky assets underpinned safe-haven assets, such as yen, amid simmering tensions around global trade and sell-offs in several emerging market currencies. The major was trading 0.1 percent down at 110.95, having hit a low of 110.61 earlier, its lowest since July 26. FxWirePro's Hourly Yen Strength Index stood at 56.66 (Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. consumer price index and budget statement. Immediate resistance is located at 111.33 (10-DMA), a break above targets 111.65 (21-DMA). On the downside, support is seen at 110.59 (July 26 Low), a break below could take it lower 110.28 (July 5 Low).
GBP/USD: Sterling slumped to an over 1-year low amid persisting concerns that Britain could leave the European Union without a trade deal. Investors appear to have ignored upbeat prelim UK GDP Q2 figures, which indicated that Britain's economy picked up some momentum in the second quarter. The major traded 0.4 percent down at 1.2772, having hit a low of 1.2736 earlier; it’s lowest since Aug. 2017. FxWirePro's Hourly Sterling Strength Index stood at 46.02 (Neutral) 1000 GMT. Immediate resistance is located at 1.2917 (5-DMA), a break above could take it near 1.3008 (21-DMA). On the downside, support is seen at 1.2730, a break below targets 1.2700. Against the euro, the pound was trading 0.05 percent up at 89.83 pence, having hit a low of 90.30 the day before, it’s lowest since Oct. 2017.
USD/CHF: The Swiss franc fell after rising to an over 1-week high in the prior session as the greenback rallied to multi-month highs amid rising tensions in the Middle East, Asia and in Europe. The major trades 0.1 percent up at 0.9941 having touched a low of 0.9894 on Thursday, it’s lowest since July 31. FxWirePro's Hourly Swiss Franc Strength Index stood at 22.70 (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 0.9915 (August 2 Low) and any close below that level will drag it till 0.9897 (August 1 Low).
Equities Recap
European shares slumped, weighed down by losses in banking stocks and growing concerns over a widening rift between the United States and its counterparts.
The pan-European STOXX 600 index declined 0.9 percent at 386.74 points, while the FTSEurofirst 300 index eased 0.9 percent to 1,513.59 points.
Britain's FTSE 100 trades 0.7 percent down at 7,690.13 points, while mid-cap FTSE 250 fell 0.4 percent to 20,732.65 points.
Germany's DAX fell 1.6 percent at 12,476.91 points; France's CAC 40 trades 1.2 percent lower at 5,437.60 points.
Commodities Recap
Crude oil prices rose after falling to multi-week lows earlier in the day, as U.S. sanctions against Iran that look set to tighten supply offset concerns that a global trade dispute will slow economic growth and demand for fuel. International benchmark Brent crude was trading 0.3 percent up at $72.18 per barrel by 1025 GMT, having hit a low of $71.43, its lowest since June 18. U.S. West Texas Intermediate was trading 0.2 percent higher at $66.85 a barrel, after falling as low as $66.18, its lowest since June 22.
Gold prices declined, hovering towards a 1-year low touched last week, as the U.S. dollar rallied to multi-month peaks amid heightened global political tensions. Spot gold shed 0.1 percent to $1,210.74 an ounce at 1032 GMT, having hit its lowest since July 2017 at $1,204.06 last week and was on course to post a fifth weekly decline. U.S. gold futures were 0.5 percent lower at $1,213.4 an ounce.
Treasuries Recap
The U.S. Treasuries gained ahead of the country’s core consumer price inflation (CPI) for the month of July, scheduled to be released today by 12:30GMT. The yield on the benchmark 10-year Treasuries plunged nearly 4 basis points to 2.89 percent, the super-long 30-year bond yields also slumped nearly 4 basis points to 3.04 percent and the yield on the short-term 2-year traded 1-1/2 basis points lower at 2.63 percent.
The United Kingdom’s gilts surged during European session even as the country’s gross domestic product (GDP) for the second quarter of this year, met market expectations, rising from the previous reading in Q1 as well. Manufacturing production for the month of June also surpassed consensus estimates. The yield on the benchmark 10-year gilts, slumped 3-1/2 basis points to 1.26 percent, the super-long 30-year bond yields plunged 2 basis points to 1.75 percent and the yield on the short-term 2-year traded tad lower at 0.73 percent.
The New Zealand 10-year bond yield closed near 2-year low after Fonterra lowered its milk price forecast for 2017-18, remaining soft on fiscal earnings as well. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, plunged 9 basis points to 2.61 percent, the yield on the long-term 20-year note slipped 1 basis point to 2.93 percent and the yield on short-term 2-year also closed nearly 1 basis point lower at 1.71 percent.
The Japanese government bonds remained tad higher on the last trading day of the week as investors have largely shrugged-off the better-than-expected gross domestic product (GDP) for the second quarter of this year, released late yesterday. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped 1/2 basis point to 0.109 percent, the yield on the long-term 30-year note traded flat at 0.858 percent and the yield on short-term 2-year also slipped 1/2 basis point to -0.112 percent.
The Australian government bonds rallied across the board following the U.S.-China tit-for-tat trade warmongering, which is pushing investors to buy safe-haven assets in fear of full fledge trade war between the world’s two biggest economies. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 3 basis points to 2.625 percent, the yield on the long-term 30-year Note also dipped 2-1/2 basis points to 3.105 percent and the yield on short-term 2-year slumped 1-1/2 basis points to 1.993 percent.
