Market Roundup
- EUR/USD 0.29%, USD/JPY 0.15%, GBP/USD 0.15%, EUR/GBP 0.08%
- DXY -0.31%, DAX 1.32%, FTSE 0.45%, Brent -0.23%, Gold -0.36%
- U.S. "opening fire" on world with tariff threats, China says
- Trump to OPEC: 'Reduce pricing now!'
- Germany May Industrial Orders MM, 2.6%, 1.1% forecast, -2.5% previous
- Bank of England's Carney says confident UK slowdown was temporary
- Debt curbs likely hit China's Q2 GDP growth as trade war looms
- BOJ's Masai urges banks to adjust business model amid new challenges
Economic Data Ahead
- (0815 ET/1215 GMT) Payrolls processor ADP releases U.S. employment report for the month of June. The report is expected to show that 190,000 jobs were added as compared with 178,000 jobs in May.
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 2,000 to a seasonally adjusted 225,000 for the week ended June 30, while continuing claims for the week ended June 23 is expected to rise to 1.720 million from a previous reading of 1.705 million.
- (0945 ET/1345 GMT) Markit Economics reports final U.S. services PMI for the month of June. The index posted a final reading of 56.5 in May.
- (0945 ET/1345 GMT) Financial firm Markit releases final U.S. composite PMI for the month of June. The index printed a final reading of 56.0 in the previous month.
- (1000 ET/1400 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. non-manufacturing Purchasing Managers' index slipped to a reading of 58.3 in June from 58.6 in May.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending June 29.
Key Events Ahead
- (0815 ET/1215 GMT) The European Central Bank Executive Board member Yves Mersch's speech
- (1400 ET/1800 GMT) The Federal Open Market Committee issues minutes of its June 12-13 policy meeting.
FX Beat
DXY: The dollar index slumped to a 1-week low after China warned that no one wanted a trade war but it will counter the instant U.S. measures go into effect. The greenback against a basket of currencies trades 0.2 percent down at 94.32, having touched a low of 94.26 earlier, its lowest since June 26. FxWirePro's Hourly Dollar Strength Index stood at -24.30 (Neutral) by 1000 GMT.
EUR/USD: The euro rallied to an over 1-week peak as German industrial orders rebounded in May with a stronger-than-expected jump after four straight monthly falls. The German orders rose 2.6 percent after an upwardly revised fall of 1.6 percent the previous month, surpassing forecast of a 1.1 percent rise. The European currency traded 0.3 percent up at 1.1690, having touched a high of 1.1710, its highest since June 26. FxWirePro's Hourly Euro Strength Index stood at 40.78 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1720, a break above targets 1.1744 (June 4 High). On the downside, support is seen at 1.1630 (July 4 Low), a break below could drag it till 1.1600.
USD/JPY: The dollar rose, bouncing back from a near 1-week low hit in the previous session, ahead of the release of Federal Reserves' June meeting minutes, with investors looking for clues on whether it is still on track to hike interest rates twice more this year. The major was trading 0.2 percent up at 110.64, having hit a low of 110.28 the day before, its lowest since June 28. FxWirePro's Hourly Yen Strength Index stood at -103.84 (Highly Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S ADP employment change, unemployment benefit claims, service PMI from both Markit and ISM and FOMC minutes. Immediate resistance is located at 110.75 (June 21 High), a break above targets 111.08 (June 18 High). On the downside, support is seen at 110.25 (21-DMA), a break below could take it lower 109.68 (June 27 Low).
GBP/USD: Sterling rallied to an over 1-week peak after Bank of England Governor Mark Carney stated that he was now more confident Britain’s economic slowdown was temporary, boosting expectations of Bank of England to hike interest rate next month. Recent signs of a recovery in the manufacturing, construction and services sectors also heightened the prospect of a rate hike by the BoE in August. The major traded 0.2 percent up at 1.3246, having hit a high of 1.3267 earlier; it’s highest since June 26. FxWirePro's Hourly Sterling Strength Index stood at 132.30 (Highly Bullish) 1000 GMT. Immediate resistance is located at 1.3290, a break above could take it near 1.3314 (June 22 High). On the downside, support is seen at 1.3168 (5-DMA), a break below targets 1.3102 (June 21 Low). Against the euro, the pound was trading 0.1 percent down at 88.23 pence, having hit a high of 87.99 pence on Wednesday, it’s highest since June 27.
USD/CHF: The Swiss franc consolidated within narrow ranges, as investors awaited the U.S. Federal Reserve's latest policy meeting minutes that would highlight the prospect of further rate hikes. The major trades flat at 0.9924, having touched a high of 0.9992 last week, it’s highest since May 21. FxWirePro's Hourly Swiss Franc Strength Index stood at -39.00 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9977 (June 19 High) and any break above will take the pair to next level till 1.0018 (May 18 High). The near-term support is around 0.9880 and any close below that level will drag it till 0.9855.
Equities Recap
European shares rallied, supported by upbeat economic data from Germany, while sterling hit 1-week peak following Bank of England Governor Mark Carney comments.
The pan-European STOXX 600 index rallied 0.6 percent at 382.30 points, while the FTSEurofirst 300 index surged 0.7 percent to 1,499.04 points.
Britain's FTSE 100 trades 0.5 percent up at 7,607.49 points, while mid-cap FTSE 250 gained 0.1 percent to 20,675.11 points.
Germany's DAX rose 1.1 percent at 12,459.58 points; France's CAC 40 trades 0.8 percent higher at 5,367.40 points.
Commodities Recap
Crude oil prices steadied, supported by an Iranian threat to block shipments through the Strait of Hormuz, however, U.S. President Donald Trump's demand that OPEC should cut crude prices limited upside. International benchmark Brent crude was trading 0.05 percent up at $78.11 per barrel by 1011 GMT, having hit a high of $79.53 on Friday, its highest since May 31. U.S. West Texas Intermediate was trading 0.2 percent higher at $74.48 a barrel, after rising as high as $75.24 on Tuesday, its highest since Nov. 2014.
Gold prices slumped as investors awaited the U.S. Federal Reserve's latest policy meeting minutes that would highlight the prospect of further rate hikes. Spot gold was 0.4 percent down at $1,251.50 an ounce by 1016 GMT, having touched a low of $1237.82 on Tuesday, its lowest since Dec. 12. U.S. gold futures for August delivery were little changed, up 0.03 percent at $1,253.80 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.860 percent higher by 0.022 bps, while 5-year yield was 0.02 bps up at 2.749 percent.
The Eurozone government bond yields were broadly higher after a report that some European Central Bank policymakers are uneasy that investors price only a rate rise for late next year. The German two-year bond yield rose to a 2-week high at minus 0.64 percent.
The yields on Australian 10-year paper have fallen 34 basis points since mid-May to stand at 2.60 percent. The three-year bond futures contract was up half a tick at 97.940, having hit its highest since December earlier in the week, while the 10-year contract eased 1 tick to 97.3950. The New Zealand government bonds were mostly steady.
