Market Roundup
- EUR/USD 0.12%, USD/JPY 0.05%, GBP/USD -0.02%, EUR/GBP 0.12%
- DXY -0.14%, DAX 0.02%, FTSE -0.18%, Brent -1.03%, Gold -0.23%
- As tariffs strike, China blames U.S. for "largest-scale trade war"
- China says has begun implementing some retaliatory tariffs on U.S. goods
- Germany May Industrial Output, 2.6%, 0.3% forecast, -1.0% previous
- Great Britain Jun Halifax House Prices MM, 0.3%, 0.3% forecast, 1.5% previous
- Great Britain Jun Halifax House Prices 3M/YY, 1.8%, 1.8% forecast, 1.9% previous
- France May Current Account, -2.9 bln, -1.1 bln previous
- France May Trade Balance, EUR, SA, -6.01 bln, -5.10 bln, -4.95 bln previous
- France May Imports, EUR, Approx Time, 46.520 bln, 46.500 bln previous
- France May Exports, EUR, Approx Time, 40.510 bln, 41.600 bln previous
- Do your Brexit duty, Britain's May tells her divided government
- Italy statistics office sees economy slowing in coming months
- Pompeo meets North Koreans, hopes to "fill in" details on denuclearization
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Labor Department releases nonfarm payrolls report for the month of June. The report is likely to show 195,000 jobs were added compared with an increase of 223,000 in May.
- (0830 ET/1230 GMT) The U.S. Bureau of Labor Statistics will release labor force participation rate for the month of June. The rate stood at 62.7 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Labor Department is expected to report that unemployment rate remained steady at 3.8 percent in June.
- (0830 ET/1330 GMT) The United States' average hourly earnings are likely to rise 0.3 percent in June, boosting the annual increase to 2.8 percent from 2.7 percent in May
- (0830 ET/1230 GMT) The United States releases trade balance figures for the month of May. The economy's trade deficit is expected to have narrowed to $43.7 billion from 46.2 billion in April.
- (0830 ET/1230 GMT) The Statistics Canada releases the employment report for June. The economy probably added 24,000 jobs, compared to a fall of 7,500 jobs in May, while the participation rate is expected to edged stay unchanged at 65.3 percent.
- (0830 ET/1230 GMT) Canada's unemployment rate is expected to remain unchanged at 5.8 percent for the month of June.
- (0830 ET/1230 GMT) The Statistics Canada is likely to report that international trade deficit expanded to C$2.05 billion in May from C$1.90 billion in April.
- (1000 ET/1400 GMT) The Richard Ivey School of Business releases Canada's seasonally adjusted Ivey Purchasing Managers Index for the month of June. The index posted a reading of 62.5 in the prior month.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending June 29.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- N/A Austrian National Bank and the Economic Chamber host an economics conference in Vienna
FX Beat
DXY: The dollar index eased as U.S. tariffs on $34 billion in Chinese imports took effect, with Beijing responding with similar measures. The greenback against a basket of currencies trades 0.1 percent down at 94.27, having touched a low of 94.18 the day before, its lowest since June 26. FxWirePro's Hourly Dollar Strength Index stood at -92.90 (Slightly Bearish) by 1000 GMT.
EUR/USD: The euro rallied to a 3-week peak after data showed German industrial output bounced back in May, suggesting that factories in Europe gathered momentum again following a weak start of the year. The economy's industrial output increased by 2.6 percent, recording its highest rise since November and surpassing an estimated rise of 0.3 percent. The European currency traded 0.1 percent up at 1.1706, having touched a high of 1.1726 earlier, its highest since June 26. FxWirePro's Hourly Euro Strength Index stood at 64.27 (Bullish) by 1000 GMT. Immediate resistance is located at 1.1744 (June 4 High), a break above targets 1.1789 (May 23 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 surged as the investors awaited the U.S. non-farm payrolls, which are expected to show 195,000 jobs were added in June after surging by 223,000 in May. However, an escalated trade dispute between the United States and China limited the upside. The major was trading 0.05 percent up at 110.64, having hit a low of 110.28 on Wednesday, its lowest since June 28. FxWirePro's Hourly Yen Strength Index stood at -40.41 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S non-farm payroll, employment rate and trade balance data. Immediate resistance is located at 111.08 (June 18 High), a break above targets 111.39 (May 21 High). On the downside, support is seen at 110.36 (10-DMA), a break below could take it lower 109.68 (June 27 Low).
GBP/USD: Sterling steadied above the 1.3200 handle as British house prices rose 1.8 percent in the three months to June compared with a year ago, matching estimates and compared with a 1.9 percent rise in May. Investors now await UK Prime Minister Theresa May's meeting, where she will try to convince her ministers to back her policy document on Britain's future relationship with the European Union. The major traded 0.1 percent up at 1.3236, having hit a high of 1.3274 the day before; it’s highest since June 26. FxWirePro's Hourly Sterling Strength Index stood at -50.82 (Bullish) 1000 GMT. Immediate resistance is located at 1.3270, a break above could take it near 1.3314 (June 22 High). On the downside, support is seen at 1.3192 (10-DMA), a break below targets 1.3146 (June 20 Low). Against the euro, the pound was trading 0.1 percent down at 88.46 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 a muted reaction to the U.S. tariffs on Chinese imports suggested the escalation had largely been priced in by investors. The major trades flat at 0.9927, having touched a high of 0.9992 last week, it’s highest since May 21. FxWirePro's Hourly Swiss Franc Strength Index stood at -36.99 (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 edged up as China implemented additional tariffs on some import products from the United States immediately after U.S. tariffs on $34 billion in Chinese imports took effect.
The pan-European STOXX 600 index gained 0.05 percent at 381.75 points, while the FTSEurofirst 300 index plunged 0.05 percent to 1,494.89 points.
Britain's FTSE 100 trades 0.1 percent down at 7,593.77 points, while mid-cap FTSE 250 gained 0.05 percent to 20,630.68 points.
Germany's DAX rose 0.1 percent at 12,472.34 points; France's CAC 40 trades 0.1 percent higher at 5,370.71 points.
Commodities Recap
Crude oil prices declined to an over 1-week low, weighed down by higher Saudi production and trade tensions between the United States and China. International benchmark Brent crude was trading 1.05 percent down at $76.75 per barrel by 1016 GMT, having hit a high of $79.53 last week, its highest since May 31. U.S. West Texas Intermediate was trading 0.6 percent lower at $72.70 a barrel, after rising as high as $75.24 on Tuesday, its highest since Nov. 2014.
Gold prices declined after China implemented additional tariffs on some import products from the United States immediately after U.S. tariffs on $34 billion in Chinese imports took effect. Spot gold was 0.3 percent lower at $1,254.23 an ounce by 1020 GMT, having touched a low of $1237.82 on Tuesday, its lowest since Dec, however, it was headed for its first weekly gain in four. U.S. gold futures for August delivery slipped 0.1 percent to $1,257.50 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.845 percent higher by 0.006 bps, while 5-year yield was 0.003 bps up at 2.743 percent.
The shorter-dated Japanese government bond prices edged lower. The five-year JGB yield rose 0.5 basis point to minus 0.12 percent. The 40-year JGB yield fell 0.5 basis point to 0.805 percent. The 10-year JGB yield was flat at 0.03 percent, while the 20-year JGB yield was also unchanged at 0.475 percent.
The yields on Australian 10-year paper have fallen 34 basis points since mid-May to stand at 2.60 percent. The 3-year bond contract off 1 tick at 97.925, while the 10-year contract dipped 1.5 ticks to 97.3800. The New Zealand 10-year yields are at 2.84 percent, having eased from a 3.06 percent top in June.
