Market Roundup
• Stocks helped by vaccine hopes, as US-Sino tensions simmer
• Euro at four-month high ahead of recovery fund meeting
• Oil climbs before OPEC meeting
• US June Import Price Index (MoM) 1.4%,1.0% forecast, 1.0% previous
• US Export Price Index (MoM) 1.4%, 0.8% , 0.5% previous
• US Jul NY Empire State Manufacturing Index 17.20, 10.00 forecast, -0.20 previous
• Canada May Manufacturing Sales (MoM) 10.7%, 9.5%,-28.5% previous
• US Manufacturing Production (MoM) 7.2%, 5.6% forecast, 3.8% previous
• US June Capacity Utilization Rate 68.6%, 67.7% forecast, 64.8% previous
• US June Industrial Production (MoM) 5.4%, 4.3% forecast, 1.4% previous
• US Seevol Cushing Storage Report 1.748M, 1.566M previous
• Canada BoC Interest Rate Decision0.25% , 0.25% forecast, 0.25% previous
Looking Ahead - Economic events and other releases (GMT)
• 22:45 New Zealand CPI (YoY) (Q2) 1.5% forecast, 2.5% previous
• 22:45 New Zealand CPI (QoQ) (Q2) -0.5% forecast, 0.8% previous
• 23:50 Japan Foreign Bonds Buying-522.8B previous
• 23:50 Japan Foreign Investments in Japanese Stocks -77.0B previous
• 00:00 Australia HIA New Home Sales (MoM) -4.2% previous
• 01:00 Australia MI Inflation Expectations 3.3% previous
• 01:30 China June House Prices (YoY) 4.9% previous
• 01:30 Australia June Unemployment Rate 7.4% forecast,7.1% previous
• 01:30 Australia June Employment Change 112.5K forecast, -227.7K previous
• 01:30 Australia June Participation Rate 63.6% forecast, 62.9% previous
• 01:30 Australia June Full Employment Change -89.1K previous
• 02:00 China GDP (QoQ) (Q2) 9.6% forecast, -9.8% previous
• 02:00 China June Industrial Production (YoY) 4.7% forecast,4.4% previous
• 02:00 China June GDP (YoY) (Q2) 2.5% forecast, -6.8% previous
Currency Summaries
EUR/USD: The euro strengthened to hit four month high against dollar on Wednesday as hopes that European Union leaders may agree on stimulus to shield the economy from the pandemic boosted euro. The European Union could agree at its summit later this week on a rescue financing package that will limit the economic damage to the bloc from the coronavirus pandemic. The euro rose to as high as $1.1456 , its highest level since March 10 and not far off its peak so far this year of $1.1495. Immediate resistance can be seen at 1.1456 (Daily high), an upside break can trigger rise towards 1.1500 (Psychological level).On the downside, immediate support is seen at 1.1386 (23.6% fib), a break below could take the pair towards 1.1356 (23.6% fib).
GBP/USD: Sterling rose against dollar on Wednesday as weaker dollar and an improvement in risk sentiment boosted sterling. Investors are also waiting for more news on Britain’s negotiations with the European Union on concluding a trade deal for the post-Brexit period. Britain left the bloc on Jan. 31, with a one-year transition period to iron out a future relationship . The pound was up 0.5% at against dollar at $1.2630. Immediate resistance can be seen at 1.2655 (Higher BB), an upside break can trigger rise towards 1.2700 (Psychological level).On the downside, immediate support is seen at 1.2574 (38.2% fib), a break below could take the pair towards 1.2476 (21 DMA).
USD/CAD: The Canadian dollar rose against the greenback on Wednesday as investors grew more optimistic about a COVID-19 vaccine and after the Bank of Canada reinforced its commitment to support economic recovery. Canada’s economic growth will not return to pre-pandemic levels until 2022, the Bank of Canada said, in an outlook that was cautious on U.S. growth. It left its benchmark interest rate at 0.25%, a level it considers to be the floor, and said it would remain at that level until economic slack is absorbed. The Canadian dollar was trading 0.6% higher at 1.3506 to the greenback .Immediate resistance can be seen at 1.3445 (Higher BB), an upside break can trigger rise towards 1.3500 (Psychological level).On the downside, immediate support is seen at 1.3382 (5 DMA), a break below could take the pair towards 1.3346 (11 DMA).
USD/JPY: The dollar declined against the Japanese yen Wednesday as heightened tensions between the United States and China increased demand for safe haven yen. Tensions between the United States and China rose after U.S. President Donald Trump signed legislation and an executive order to hold China “accountable” for the national security law it imposed on Hong Kong. Strong resistance can be seen at 107. 31 (11 DMA), an upside break can trigger rise towards 107.50 (50% fib).On the downside, immediate support is seen at 106.80 (Daily low), a break below could take the pair towards 106.54 (Lower BB).
Equities Recap
European shares rebounded on Wednesday from losses in the previous session, bolstered by positive updates on a potential COVID-19 vaccine, while investors weighed a mixed bag of quarterly reports at the start of earnings season.
UK's benchmark FTSE 100 closed up by 1.83 percent, Germany's Dax ended down by 1.84 percent, France’s CAC finished the day up by 2.33 percent.
Wall Street gained on Wednesday with the S&P 500 nearing its highest in more than four months following a strong quarterly showing by Goldman Sachs and promising early data for a potential COVID-19 vaccine.
Dow Jones was up by 0.53 % percent, S&P 500 closed up by 0.44 % percent, Nasdaq was up by 0.47 % percent.
Treasuries Recap
U.S. Treasury yields rose and the yield curve steepened on Wednesday as hopes of a COVID-19 vaccine boosted risk appetite and reduced demand for safe-haven bonds.
Benchmark 10-year notes rose three basis points to 0.648%. They have held in a tight range from 0.569% to 0.784%
since mid-June.
Commodities Recap
Gold prices on Wednesday retreated from a one-week high hit earlier in the session as other assets rose, but was kept above the key $1,800 level by simmering U.S.-China tensions and mounting coronavirus cases.
Spot gold dipped 0.1% to $1,805.97 per ounce by 1215 GMT, having hit its highest since July 9 at $1,814.40. U.S. gold futures were down 0.3% at $1,807.70..
Oil prices rose 1% on Wednesday, supported by a sharp drop in U.S. crude inventories, but further gains were limited as OPEC and its allies are set to ease supply curbs from August as the global economy gradually recovers from the coronavirus pandemic.
Brent crude was up 57 cents, or 1.3%, at $43.47 a barrel at 12:56 p.m. ET (1656 GMT), and U.S. West Texas Intermediate (WTI) crude rose 58 cents, or 1.4%, to $40.87 a barrel.
