Market Roundup
- Crude futures extend losses to session lows on U.S. oil rig rise.
- Fed staff sees one U.S. rate hike this year, inflation stuck in low gear for 5 more years.
- US Markit Manufacturing PMI Flash Jul 53.8, f/c 53.6, 53.6-previous.
- US New Home Sales Change MM Jun -6.8%, -1.1%-previous.
- ECB's Noyer says Grexit risk has subsided (Le Monde).
- Greece submits request to IMF for new loan facility.
- Brazil's CB director Pereira says inflation vigilance "paramount" (translation: more hikes on way).
- Reuters Poll 42/55 economists see Brazil Central Bank raising main rate 50bos to 14.25% next week.
Looking Ahead - Economic Data (GMT)
- No Significant Data
Looking Ahead - Events, Other Releases (GMT)
- 01:30 Japan BOJ Deputy Governor Hiroshi Nakaso speaks in Kumamoto
Currency Summaries
EUR/USD
EUR/USD is supported around 1.0819 levels and currently trading at 1.0911 levels. It has made session high at 1.0918 and lows at 1.0867 levels. The pair rebounded from 1.0923 daily lows after the US New Home Sales printed lower than expected figures 482k against the forecast of 546k, manufacturing PMI came at better than the forecast at 53.8 vs 53.6, the euro started to gain to from 1.0923 level to hit session high at 1.0991, meanwhile earlier in the day, Greece finance minister said, Greece has formally submitted a request to international monitory fund for new loan facility. With the Greece crisis cooling down, the focus now shifts to next week FOMC meeting, the central bank is not expected to change its current monetary policy but, the traders will be closely paying attention to Fed's tone related to rate hike sentiment. To the upside, immediate resistance can be seen at 1.1015. To the downside, major support level is located at 1.0915.
GBP/USD
GBP/USD is supported around 1.5460 levels and currently trading at 1.5507 levels. It has made session high at 1.5524 and low at 1.5472 levels. Sterling eased against the dollar in the early New york session, on track for its weakest weekly performance in the past 3- months, after recent data disappointed and falling oil prices raised some doubts over when the Bank of England would hike interest rates. Sterling dropped to $1.5485 down 0.2 percent on the day, having hit $1.5465. UK retail sales for June disappointed, but some analysts argued it was not enough to deal a blow to hawks on the BoE policy committee, many of whom are probably inching towards voting for a rate hike next month. The further movements in the pair will be influenced by UK GDP is set to released on Tuesday. To the upside, immediate resistance can be seen at 1.5545. To the downside, major support level is located at 1.5460.
USD/JPY
USD/JPY is supported around 123.50 levels and currently trading at 123.75 levels. It has made session high at 123.98 and low at 123.59 levels. The US Dollar edged lower against Japanese yen after US Housing data printed lower than expected figures at 482k against the forecast of 546k, manufacturing PMI came at better than the forecast at 53.8 vs 53.6, the pair hit daily lows at 123.58 level and subsequently recovered to reach higher around 123.80 in the mid New York session. The data will put lot of questions on the Feds weather, revising rates, in the near future is feasible for US economy or not. Federal Reserve Chair Janet Yellen said last week that the central bank is likely to raise rates "at some point this year" To the upside, immediate resistance can be seen at 124.00. To the downside, major support level is located at 123.50.
USD/CAD
USD/CAD is supported around 1.3000 levels and currently trading at 1.3067 levels. It has made session high at 1.3104 and low at 1.3052 levels. The Canadian dollar crashed against the U.S. dollar on Friday to trade levels not seen in 11 years, the last the time this pair reached this level was way back in 2004. The loonie was pushed down by a stronger greenback amid broad concerns that slow global economic growth that has hurt commodities-driven currencies. The move came as the price of oil, a major Canadian export, stabilized but remained below $49 a barrel. Weaker-than-expected economic data from China, the world's biggest metals consumer, sent currencies linked to global commodity prices, such as the Canadian and Australian dollars, to multi-year lows. The next major event in the coming week is U.S. Federal Reserve's rate decision due on Wednesday, which will determine the directional move of this pair. To the upside, immediate resistance can be seen at 1.3105. To the downside, major support level is located at 1.2950.
Equity Recap
European stocks ended the day in negative note, following sell-offs in commodities market. The pan-European FTSEurofirst 300 closed down by slipping 1 percent lower at 1,563.43 points, Germany's DAX tumbled down, by closing at 1.5 percent lowest level since July 10, London's FTSE 100 closed down at 1.2 percent, and the France's CAC 40 closed down at 0.6 percent. Meanwhile, Spain's IBEX 35 closed down by 1.2 percent, Switzerland SMI closed at 9,330.00, down by 0.5 percent.
U.S. stocks Stocks fell for the fourth consecutive day on Friday. Nasdaq closed down at 1.10 percent, at 5,089.71, S&P 500 closed down 22.30 points, or 1.06 percent, at 2,079.85, Dow Jones closed down 160.72 points, or 0.91 percent, at 17,571.20.
Treasury Recap
U.S. Treasury debt prices drifted higher on Friday, as investors sought safety in government bonds after a softer-than-expected U.S. housing report and amid a persistent downtrend in commodities and weakness on Wall Street.
U.S. 30-year bond yields, which move inversely to prices, fell to a seven-week low, while benchmark U.S. 10-year yields slid to a two-week trough. In late trading, benchmark 10-year Treasury notes were up 5/32 in price to yield 2.260 percent, compared with 2.275 percent late on Thursday. Yields earlier fell to 2.255 percent, the lowest since July 9.
U.S. 30-year bonds were up 12/32 in price to yield 2.960 percent, compared with 2.971 percent on Thursday. Yields earlier fell to 2.95 percent, the lowest since June 2.
U.S. seven-year notes were up 4/32 in price, yielding 2.003 percent, from Thursday's 2.023 percent. Earlier, seven-year yields fell to a two-week low of 2.001 percent.
Commodity Recap
Brent and U.S. crude futures settled on Friday at their lowest since March and posted their fourth straight weekly decline as weak economic data from China and a rise in U.S. oil drilling rigs applied pressure. The rig count data arrived a day after U.S. crude fell into bear market territory, as a drop of 21 percent from its June 10 close at $61.43 a barrel indicated the market's prevailing negative sentiment. Brent September crude fell 65 cents to settle at $54.62 a barrel, the lowest close since March 19 and off 4.3 percent for the week. The $54.30 session low was the lowest front-month price since April 2.
Gold turned higher after sliding more than 1 percent to its lowest since early 2010 on Friday, as the dollar fell from its highs and U.S. stocks extended losses, but the precious metal was on track to see the biggest weekly decline since March. Spot gold hit the lowest since February 2010 at $1,077.00 an ounce but was up 0.5 percent at $1,096. U.S. gold futures for August delivery settled down 0.8 percent at $1,085.50 an ounce.
