Market Roundup
• Fed policymakers divided over whether to raise rates soon-minutes.
• Some voting Fed members see rate hike needed soon.
• St. Louis Fed's Bullard sticks with single rate hike outlook.
• Fed's Bullard says the timing of next hike not that important.
• Saudi signals it may hit new oil output record ahead of freeze talks-sources.
• South Africa retail sales slow more than forecast as economy flirts with recession.
• North Korea says it has resumed plutonium production-Kyodo
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Foreign Bond Investment w/e 891.8b-previous
• 23:50 Japan Foreign Invest JP Stock w/e -492.2b- previous
• 23:50 Japan Exports YY* Jul forecast -14%, -7.4%- previous
• 23:50 Japan Imports YY* Jul forecast -20.6%, -18.8%- previous
• 23:50 Japan Trade Balance Total Yen Jul forecast -283.7b, 692.8b- previous
• 01:30 China- China House Prices YY Jul 7.3%- previous
• 01:30 Australia Employment* Jul forecast -11.0k, 7.9k- previous
• 01:30 Australia Full Time Employment Jul 38.4k- previous
• 01:30 Australia Participation Rate* Jul forecast -64.9%, 64.9%- previous
• 01:30 Australia Unemployment Rate* Jul forecast -5.8%, 5.8%- previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1238 levels and currently trading at 1.1279 levels. The pair has made session high at 1.1315 and hit lows at 1.1238 levels. Euro edged higher against US dollar on Wednesday as demand for single currency picked up after minutes from the Federal Reserve's July meeting showed general agreement that more data was needed before the rate hike increase from the central bank. The Fed's minutes from its July 26-27 meeting came after comments by two policymakers, New York Fed President William Dudley and Atlanta Fed chief Dennis Lockhart on Tuesday, which rekindled bets the Fed may raise interest rates by year-end if the economy improves further. Investors expect more insight on the rate outlook at an annual meeting of central bankers from around the world in Jackson Hole, Wyoming, next week. The euro was last up 0.08 percent against the greenback at $1.1285 after hitting a session high of $1.1315, which remained below Tuesday's more than seven-week high of $1.1322.
GBP/USD is supported in the range of 1.2934 currently trading at 1.3034 levels. It reached session high at 1.3083 and hit low at 1.2976 levels. Sterling rose against US dollar on Wednesday after minutes from the Federal Reserve's July meeting showed policymakers may be on the road to raising U.S. interest rates but will need to see more positive economic data before pulling the trigger. Earlier in the day, data showed claims for jobless benefit in Britain unexpectedly fell in July were fleeting on Wednesday as the numbers did little to alter expectations of easier monetary policy and drove another bout of selling in the currency. Claimants fell by 8,600 in the month, compared with an increase of 900 in June, the Office for National Statistics said. Economists had expected the number of benefit claimants - considered to be a potential early warning sign of an economic downturn - to rise by 9,500. Sterling rose to $1.3083 immediately after the release of minutes from the U.S. Federal Reserve's July meeting, but it slid back to trade at $1.3038 in the late US session.
USD/CAD is supported at 1.2795 levels and is trading at 1.2860 levels. It has made session high at 1.2898 and lows at 1.2829 levels. The Canadian dollar rose against U.S. dollar on Wednesday as a selloff in the dollar after the release of minutes from the Federal Reserve's July meeting and higher oil prices boosted Canadian dollar. Oil rose on Wednesday, helped by a weaker dollar and an unexpected drawdown in U.S. crude and gasoline. After three straight weeks of unexpected builds, U.S. crude stockpiles fell 2.5 million barrels last week, the Energy Information Administration said, surprising analysts who had expected a build of 522,000 barrels. The Canadian dollar was last trading at C$1.2850 to the greenback, or 77.78 U.S. cents, slightly weaker than Tuesday's close of C$1.2853, or 77.80 U.S. cents.
AUD/USD is supported around 0.7590 levels and currently trading at 0.7641 levels. It hit session high at 0.7673 and made session lows at 0.7607 levels The Australian dollar edged up against its U.S. counterpart on Wednesday as slightly dovish tone from Federal Reserve's provided strength in the Aussie. The Australian dollar edged up to $0.7672, from a low of $0.7608 following the release of minutes from the U.S. Federal Reserve's July meeting, which showed the central bank's policymakers expected an interest rate hike soon but were still awaiting more data. The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.04 percent at 94.753 after gaining about 0.3 percent to 95.102 earlier Wednesday. The index briefly fell 0.3 percent to a session low of 94.510.
Equities Recap
European shares fell on Wednesday, with Austrian brickmaker Wienerberger, brewer Carlsberg and UK insurer Admiral sliding after publishing results.
UK's benchmark FTSE 100 down 0.5 percent, the pan-European FTSEurofirst 300 ended the day down by 0.80 percent, Germany's DAX ended down by 1.3 percent, France’s CAC finished the day down by 0.9 percent.
Wall Street stocks turned positive while the dollar edged lower on Wednesday after minutes from the Federal Reserve's July meeting showed policymakers may be on the road to raising U.S. interest rates but will need to see more economic data before pulling the trigger.
Dow Jones closed up by 0.10 percent, S&P 500 ended up by 0.17 percent, Nasdaq finished the day up by 0.02 percent.
Treasuries Recap
U.S. Treasury debt prices rose on Wednesday with the two-year yield retreating from a three-week high, as the minutes from the Federal Reserve meeting in July hinted at a general agreement that more data are required for an interest rate increase.
Benchmark 10-year Treasury notes were up 7/32 in price to yield 1.553 percent, down 2 basis points from Tuesday, while the 30-year bond was up 22/32 in price for a yield of 2.265 percent, down 3 basis points.
The two-year yield, which is sensitive to traders' views on Fed policy, was down 1 basis point at 0.734 percent after touching a three-week peak at 0.774 percent shortly before the release of the FOMC minutes.
Commodities Recap
Gold steadied on Wednesday, after moving in both directions following the release of minutes from the U.S. Federal Reserve's July meeting, which showed the central bank's policymakers expected an interest rate hike soon but were still awaiting more data.
Spot gold was up 0.02 percent at $1,345.96 an ounce by 3:04 pm. EDT (1904 GMT). It had fallen 0.6 percent to $1,337.22 immediately after the minutes were released and then risen 0.4 percent.
U.S. gold settled down 0.6 percent at $1,348.80 per ounce prior to the news.
Oil's rally extended for a fifth day on Wednesday, helped by a weaker dollar and an unexpected drawdown in U.S. crude and gasoline but traders said the run up may not last, pointing to galloping Saudi output and technical factors.
Brent crude settled up 62 cents, or 1.3 percent, at $49.85 a barrel after touching five-week highs of $49.93.
U.S. West Texas Intermediate (WTI) crude futures rose 21 cents, or 0.5 percent, to $46.79.
