Market Roundup
- EUR/USD -0.35%, USD/JPY 0.1%, GBP/USD -0.61%, EUR/GBP 0.27%
- DXY 0.34%, DAX 0.8%, FTSE 0.67%, Brent -0.8%, Gold -0.39%
- Great Britain Jun Core CPI MM, -0.1%, 0.3% forecast, 0.3% previous
- Great Britain Jun Core CPI YY, 1.9%, 2.2% forecast, 2.1% previous
- Great Britain Jun CPI MM, 0.0%, 0.2% forecast, 0.4% previous
- Great Britain Jun CPI YY, 2.4%, 2.6% forecast, 2.4% previous
- Great Britain Jun RPI MM, 0.3%, 0.4% forecast, 0.4% previous
- Great Britain Jun RPI YY, 3.4%, 3.5% forecast, 3.3% previous
- Great Britain Jun RPI-X MM, 0.3%, 0.4% previous
- Great Britain Jun RPI Index, 281.5, 280.7 previous
- Great Britain Jun PPI Input Prices MM, NSA, 0.2%, 0.3% forecast, 2.8% previous
- Great Britain Jun PPI Output Prices MM, NSA, 0.3%, 0.1% forecast, 0.4% previous
- Great Britain Jun PPI Core Output MM NSA, 0.2%, 0.2% forecast, 0.2% previous
- EZ Jun HICP Final MM, 0.1%, 0.1% forecast, 0.5% previous
- EZ Jun HICP Final YY, 2.0%, 2.0% forecast, 2.0% previous
- Back UK PM May or face national election, Brexit rebels told
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Department of Commerce is expected to report that housing starts increased to an annualized rate of 1.32 million units in June after rising 1.35 million units in May.
- (0830 ET/1230 GMT) The U.S. building permits are likely to have increased to a 1.330 million-unit pace in June from a 1.301 million-unit pace in May.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending July 13.
- (1800 ET/2200 GMT) The Fed issues its Beige Book, a summary of anecdotes on the health of the economy.
Key Events Ahead
- (1000 ET/1400 GMT) Federal Reserve Chairman Jerome Powell gives the semiannual testimony on the economy and monetary policy before the House Financial Services Committee.
- N/A Kansas City Fed President Esther George gives her views on the economic outlook at the Kansas City Fed's 2018 Agricultural Symposium.
FX Beat
DXY: The dollar index surged to a 3-week peak as the Federal Reserve's Chairman Jerome Powell gave an upbeat assessment on the U.S. economy. Investors now await Powell’s second consecutive testimony before the Senate later in the day. The greenback against a basket of currencies trades 0.4 percent up at 95.32, having touched a high of 95.40 earlier, its highest since June 28. FxWirePro's Hourly Dollar Strength Index stood at 64.61 (Bullish) by 1000 GMT.
EUR/USD: The euro slumped to an over 2-week low after data showed Eurozone's annual inflation rose to 2.0 percent in June, while core annual inflation came in at 0.9 percent below expectations of 1.0 percent. The European currency traded 0.4 percent down at 1.1616, having touched a high of 1.1744 on Tuesday, its highest since July 11. FxWirePro's Hourly Euro Strength Index stood at -38.84 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1744 (June 4 High), a break above targets 1.1801 (June 13 High). On the downside, support is seen at 1.1591 (July 2 Low), a break below could drag it till 1.1530 (June 19 Low).
USD/JPY: The dollar rallied above the 113.00 handle to hit a fresh 6-month peak as bullish comments from U.S. Federal Reserve Chairman Jerome Powell about the strength of the U.S. economy reinforced views that interest rates will continue to rise this year. The major was trading 0.1 percent up at 113.01, having hit a high of 113.13 earlier, its highest since Jan 9. FxWirePro's Hourly Yen Strength Index stood at 49.93 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. housing starts, building permits, and Fed Powell testimony. Immediate resistance is located at 113.38 (Dec 8 High), a break above targets 113.62 (Dec 21 High). On the downside, support is seen at 112.40 (5-DMA), a break below could take it lower 111.91 (July 12 Low),
GBP/USD: Sterling tumble towards the 1.3000 handle, hitting a 10-month low after data showed British inflation failed to rise as expected, slashing market expectations for a 25 basis point August interest rate rise by the Bank of England. The economy's annual consumer price inflation held steady in June at 2.4 percent, below expectations of 2.6 percent. The major traded 0.6 percent down at 1.3029, having hit a low of 1.3010 earlier; it’s lowest since Sept. 2017. FxWirePro's Hourly Sterling Strength Index stood at -149.86 (Highly Bearish) 1000 GMT. Immediate resistance is located at 1.3198 (5-DMA), a break above could take it near 1.3274 (July 5 High). On the downside, support is seen at 1.3000, a break below targets 1.2968. Against the euro, the pound was trading 0.3 percent down at 89.16 pence, having hit a low of 89.23pence earlier, it’s lowest since March 9.
USD/CHF: The Swiss franc eased to a 3-day low as the greenback surged after Fed Chairman Jerome Powell reiterated that the central bank would continue to gradually hike interest rate. The major trades 0.05 percent up at 1.0003, having touched a high of 1.0068 on Friday, it’s highest since May 2017. FxWirePro's Hourly Swiss Franc Strength Index stood at 126.71 (Highly Bullish) by 1000 GMT. On the higher side, near-term resistance is around 1.0040.and any break above will take the pair to next level till 1.0070. The near-term support is around 0.9939 (21-DMA) and any close below that level will drag it till 0.9880.
Equities Recap
European shares rallied to a 1-month peak, underpinned by a rally in tech stocks, while the greenback rose on the back of a positive assessment of the U.S economy from Federal Reserve Chairman Jerome Powell.
The pan-European STOXX 600 index advanced 0.5 percent at 387.07 points, while the FTSEurofirst 300 index surged 0.3 percent to 1,514.63 points.
Britain's FTSE 100 trades 0.6 percent up at 7,675.78 points, while mid-cap FTSE 250 gained 0.5 percent to 20,981.09 points.
Germany's DAX rose 0.8 percent at 12,762.75 points; France's CAC 40 trades 0.6 percent higher at 5,454.60 points.
Commodities Recap
Crude oil prices declined to a fresh 3-month low after a rise in U.S. crude inventories highlighted increasing global supply and concerns over weak demand. International benchmark Brent crude was trading 0.1 percent down at $71.56 per barrel by 1002 GMT, having hit a low of $71.22 earlier, its lowest since April 17. U.S. West Texas Intermediate was trading 0.1 percent lower at $67.54 a barrel, after falling as low as $67.08 on Tuesday, its lowest since June 22.
Gold prices declined to their lowest in a year as the dollar rallied after Federal Reserve Chairman Jerome Powell's U.S. economic outlook reinforced views that the central bank is on course to hike interest rates gradually. Spot gold was 0.4 percent down at $1,223.11 an ounce by 1014 GMT, having hits a low of $1,220.99 an ounce Earlier in the session, its weakest since mid-July 2017. U.S. gold futures for August delivery were 0.2 percent lower at $1,224.30 an ounce.
Treasuries Recap
The U.S. 2-year Treasury yield broke yesterday’s high of 2.619 percent, albeit remaining flat at the time of writing, reaching a day’s high of 2.624 percent. The yield on the benchmark 10-year Treasuries slipped nearly 1 basis point to 2.85 percent, the super-long 30-year bond yields traded tad lower at 2.96 percent and the yield on the short-term 2-year too remained 1/2 basis point lower at 2.61 percent.
The United Kingdom’s 10-year gilt yield slumped to 1-1/2 month low during European session after the country’s consumer price inflation (CPI) for the month of June failed to meet market expectations. The yield on the benchmark 10-year gilts, slumped nearly 2-1/2 basis points to 1.23 percent, the super-long 30-year bond yields fell nearly 1-1/2 basis points to 1.70 percent and the yield on the short-term 2-year traded 1 basis point lower at 0.74 percent.
The New Zealand bonds closed higher as investors have largely shrugged-off the improvement in global dairy prices, albeit still in red, at the country’s latest GlobalDairyTrade (GDT) price auction, held overnight. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slid 1 basis point to 2.89 percent, the yield on the long-term 20-year note also slipped 1 basis point to 3.21 percent and the yield on short-term 2-year closed 1-1/2 basis points lower at 1.85 percent.
The Japanese government bonds remained tad lower as investors hope to see an improvement in the country’s trade balance data for the month of June and national consumer price inflation data for the same period, scheduled to be released today and 19 by 23:50GMT and 23:30GMT respectively. The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, remained tad higher at 0.04 percent, the yield on the long-term 30-year hovered around 0.68 percent and the yield on short-term 2-year traded 1/2 basis point up at -0.12 percent.
The Australian government bonds traded narrowly mixed ahead of the June employment report. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 1 basis points to 2.652 percent, the yield on the long-term 30-year Note dipped nearly 2 basis points to 3.128 percent and the yield on short-term 2-year up 1/2 basis point to 2.034 percent.
