Market Roundup
•Canada Jul Ivey PMI 57.6,60.0 forecast, 62.5 previous
•Canada Jul Ivey PMI n.s.a 55.3,62.4 previous
•US Heating Oil Stockpiles 0.410M,0.410M,0.158M previous
•US Gasoline Inventories 1.340M,-1.900M forecast, -3.665M previous
•US Crude Oil Inventories -3.728M,-1.600M forecast, -3.436M previous
•US Jun Consumer Credit 9.80B forecast,11.35B previous
Looking Ahead Economic Data(GMT)
• 23:50 Japan Jun Adjusted Current Account 2.34T forecast, 2.41T previous
•23:50 Japan Jun Current Account n.s.a. 1.790T forecast, 2.850T previous
•03:00 New Zealand Inflation Expectations (QoQ) 2.3% previous
Looking Ahead Events And Other Releases(GMT)
•02:40 Australia RBA Gov Bullock Speaks
Currency Forecast
EUR/USD: The euro declined on Wednesday as investors reassessed fears of a sharp U.S. economic slowdown. Markets await more commentary on monetary policy from U.S. central bank officials next week, in the run-up to the Jackson Hole, Wyoming, event where Fed Chair Jerome Powell is scheduled to speak.On the data front, German industrial production rose in June by 1.4% compared to the previous month, the federal statistics office said on Wednesday.Analysts polled had predicted a 1.0% rise. German exports fell more than expected in June due to weak demand from the United States, the country's key trade partner, and from the rest of the European Union, official data showed on Wednesday. Immediate resistance can be seen at 1.0977(23.6%fib), an upside break can trigger rise towards 1.1000(Psychological level).On the downside, immediate support is seen at 1.0903(38.2%fib), a break below could take the pair towards 1.0839(50%fib).
GBP/USD: The pound strengthened against the dollar on Wednesday as improved risk sentiment supported sterling. The gains came as global risk appetite improved after the Bank of Japan unexpectedly turned cautious on rate hikes. Recessionary fears in the United States after weak economic data last week had triggered a market meltdown on Monday, however nerves were soothed by positive U.S. data this week and comments from Federal Reserve policymakers. . Sterling was 0.1% higher at $1.2704. Immediate resistance can be seen at 1.2753(38.2%fib), an upside break can trigger rise towards 1.2855(23.6%fib).On the downside, immediate support is seen at 1.2671(50%fib), a break below could take the pair towards 1.2596(61.8%fib).
USD/CAD: The Canadian dollar gained strength against the U.S. dollar on Wednesday as investors evaluated whether the recent currency sell-off had ended, despite concerns from the Bank of Canada about the domestic economic outlook. The currency was extending its recovery from a near two-year low at 1.3946, which it hit on Monday when Canadian financial markets were closed and markets globally turned volatile. The loonie was trading 0.3% higher at 1.3750 per U.S. dollar, after touching its strongest intraday level since July 22 at 1.3719. Immediate resistance can be seen at 1.3796(38.2%fib), an upside break can trigger rise towards 1.3852 (23.6%fib).On the downside, immediate support is seen at 1.3759(50%fib), a break below could take the pair towards 1.3709 (61.8%fib).
USD/JPY: The dollar strengthened on Wednesday as yen slipped lower after an influential Bank of Japan official played down the chances of a near-term rate hike. The yen fell around 2.5% to a session low of 147.94 per dollar following the comments from BOJ Deputy Governor Shinichi Uchida.His remarks, which contrasted with Governor Kazuo Ueda's hawkish comments made last week when the BOJ unexpectedly raised interest rates, sent Japanese stocks higher, opens new tab, leaving them effectively flat for the week.The BOJ's hike last week, along with intervention from Tokyo in early July, led investors to bail out of once-popular carry trades in which traders borrow the yen at low rates to invest in assets that offer higher returns. Strong resistance can be seen at 147.57(38.2 %fib), an upside break can trigger rise towards 150.11 (50%fib). On the downside, immediate support is seen at 144.11(23.6%fib), a break below could take the pair towards 141.67(Daily low).
Equities Recap
A strong comeback by banks on Wednesday helped Europe's main stock index log its biggest one-day gain since November, even though the continent's largest company by market cap Novo Nordisk slid after trimming its full-year profit outlook.
UK's benchmark FTSE 100 closed up by 1.75 percent, Germany's Dax ended up by 1.50 percent, France’s CAC finished the day up by 1.91 percent.
U.S. stocks ended lower on Wednesday, with the Nasdaq falling 1% due to a decline in technology shares. Investor concerns were further heightened by weak demand in a 10-year Treasury auction, leading to jittery and volatile trading conditions.
Dow Jones closed down by 0.60 %percent, S&P 500 closed down by 0.77% percent, Nasdaq settled down by 1.03 % percent.
Commodities Recap
Gold prices pared gains on Wednesday as the U.S. dollar and Treasury yields edged higher. However, increasing expectations of U.S. interest rate cuts in September and rising geopolitical tensions in the Middle East supported bullion.
Spot gold was flat at $2,388.16 per ounce, as of 2:12 p.m. ET (1812 GMT), after rising as much as 0.7% earlier in the session.U.S. gold futures settled mostly unchanged at $2,432.40.
Oil prices rose by more than 2% on Wednesday, rebounding from multi-month lows after data showed a larger-than-expected draw in U.S. crude stockpiles, despite ongoing concerns about weak oil demand in China.
Brent crude futures settled up $1.85, or 2.42%, at $78.33 a barrel. U.S. West Texas Intermediate crude gained $2.03, or 2.77%, to $75.23.
