Market Roundup
•US indexes: S&P 500 -0.22%, Nasdaq flat, Dow -0.47%
•U.S. composite PMI at lowest since February 2021
•OPEC+ has options, including cuts -Saudi minister
•Iran has dropped some demands for nuclear deal -U.S. official
•US Aug Services PMI 44.1,49.2 forecast ,47.3 previous
•US Aug Manufacturing PMI 51.3,52.0 forecast ,52.2 previous
•US Aug S&P Global Composite PMI 45.0, 49.0 forecast , 47.7 previous
•US Aug Richmond Services Index -12,-13 previous
•US Jul New Home Sales (MoM) -12.6%, -8.1% previous
•EU Aug Consumer Confidence -24.9,-28.0 forecast ,-27.0 previous
•US Jul New Home Sales 511K, 575K forecast ,590K previous
Looking Ahead - Economic Data (GMT)
•No significant data
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro recovered some ground on Tuesday as the dollar slid after data signaled the U.S. economy might be cooling, tempering bets of a large interest hike by the Federal Reserve next month. Dollar dipped after data showed U.S. home sales fell in July and private sector activity contracted again in August. The euro was up 0.19% against the greenback at $0.99625, rising off a fresh two-decade low of $0.99005 hit earlier in the session on renewed concerns that an energy shock continue to stoke inflation, making it more likely that Europe will fall into a recession. MI data showed that business activity in Europe contracted less than forecast in August, though the outlook was still bleak. Immediate resistance can be seen at 0.9996(50%fib), an upside break can trigger rise towards 1.0021(61.8%fib).On the downside, immediate support is seen at 0.9956(38.2%fib), a break below could take the pair towards 0.9879 (23.6%fib).
GBP/USD: Sterling was slightly higher against the dollar on Tuesday after Purchasing Managers index (PMI) data from Britain showed that business activity slowed roughly in line with expectations.The PMI composite flash estimate dropped to 50.9 in August from 52.1 in July. Economists polled had forecast the index would fall to 51.1. The pound hit a fresh 2-1/2-year low versus the greenback earlier in the session on concerns that Britain's PMI data would have kept the pound without any solid floor against the dollar. Sterling rose 0.05% versus the dollar to $1.1823 after hitting its lowest since end-March 2020 at $1.1718. Immediate resistance can be seen at 1.1806(38.2%fib), an upside break can trigger rise towards 1.1856(5DMA).On the downside, immediate support is seen at 1.1725(Daily low),a break below could take the pair towards 1.1675 (23.6%fib).
USD/CAD: The Canadian dollar strengthened against the greenback on Tuesday, recovering from its lowest level in nearly six weeks, as oil prices rose and investors weighed U.S. economic data that could reduce expected tightening by the Federal Reserve. U.S. crude oil futures settled 3.7% higher at $93.74 a barrel, while the U.S. dollar pulled back from a fresh two-decade high against the euro after a report showed U.S.The loonie was trading 0.7% higher at 1.2960 to the greenback , after four straight days of declines. Earlier, the currency touched its weakest level since July 15 at 1.3063. Immediate resistance can be seen at 1.2984(5DMA), an upside break can trigger rise towards 1.3049 (23.6%fib).On the downside, immediate support is seen at 1.2943 (38.2%fib), a break below could take the pair towards 1.2868 (50%fib).
USD/JPY: The dollar dipped against yen on Tuesday after data showed U.S. private sector activity was weaker than expected in August, prompting bets the Federal Reserve may be less aggressive in its rate hiking cycle. The S&P Global flash composite purchasing managers index (PMI) for August dropped to its lowest since May 2020, as demand for services and manufacturing contracted for the second-straight month in the face of high inflation and tighter financial conditions. Against a basket of six major currencies, the dollar index was down 0.376% at 108.58 at 3:30 p.m. Eastern time (1930 GMT). Strong resistance can be seen at 137.76(23.6%fib), an upside break can trigger rise towards 138.00(Psychological level).On the downside, immediate support is seen at 136.69 (5DMA), a break below could take the pair towards 136.37(38.2%fib).
Equities Recap
European shares slipped on Tuesday, extending their losing streak for a third session as investors fretted about soaring energy prices and a weak economic outlook after data showed business activity in the region contracted this month.
UK's benchmark FTSE 100 closed down by 0.61 percent, Germany's Dax ended down by 0.27 percent, France’s CAC finished the day down by 0.26 percent.
Wall Street ended down on Tuesday as investors focused on data showing a slowing economy ahead of a U.S. Federal Reserve gathering later this week in Jackson Hole, Wyoming.
Dow Jones was down by 0.47 percent, S&P 500 was down by 0.22 percent, Nasdaq was down by 0.03 percent.
Treasuries Recap
U.S. Treasury yields slid from multi-week peaks on Tuesday after data showed signs of a slowing economy, with the contraction in U.S. private-sector activity for a second consecutive month in August and the steep drop in new home sales for July.
The yield on 10-year Treasury notes US10YT=RR was down 3.5 basis points at 3.000%.U.S. 30-year Treasury bond yields fell as well, down 2.3 basis points to 3.218%.
Commodities Recap
Gold rose on Tuesday after six straight sessions of losses as the dollar and Treasury yields dropped following weak U.S. business activity data.
Spot gold was up 0.7% at $1,747.00 per ounce by 1:43 p.m. ET (1743 GMT). Prices slipped in the last six sessions and hit $1,727.01 on Monday, the lowest since July 27.
Oil prices surged by nearly 4% on Tuesday after Saudi Arabia floated the idea of OPEC+ output cuts to support prices in the case of returning Iranian crude and with the prospect of a drop in U.S. inventories.
Global benchmark Brent crude settled at $100.22 a barrel, up $3.74, or 3.9%. U.S. West Texas Intermediate crude closed $3.38, or 3.7%, higher at $93.74 a barrel.
Brent settled at its highest price since Aug. 2 and WTI logged its strongest settlement since Aug. 11.
