Market Roundup
•Wholesale Inventories (MoM) 1.2%,0.6% previous
•US Aug Goods Trade Balance -87.60B,-86.82B previous
•US Aug Retail Inventories Ex Auto 0.6%,0.5% previous
•US Redbook (YoY) 16.5%,17.1% previous
•US Jul House Price Index (MoM) 1.4%,1.6% previous
•US Jul House Price Index 348.4 ,343.3 previous
•2:30 US Jul House Price Index (YoY) 19.2%,18.8% previous
•US Jul S&P/CS HPI Composite - 20 s.a. (MoM) 1.5% ,1.7% forecast, 1.8% previous
•US Jul S&P/CS HPI Composite - 20 n.s.a. (YoY) 19.9% ,20.0% forecast, 19.1% previous
•US Sep Richmond Manufacturing Shipments -1 ,6 previous
•US Sep CB Consumer Confidence 109.3 ,114.5 forecast, 113.8 previous
•US Sep Richmond Services Index -3,15 previous
Looking Ahead – Economic Data (GMT)
•No economic data ahead
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD: The euro declined on Tuesday as dollar firmed tracking the rise in Treasury yields, as investors looked ahead to the Federal Reserve possibly reducing asset purchases in November and an interest rate hike likely to follow. On Tuesday, benchmark 10-year Treasury yields hit a three-month peak, and were last up four basis points at 1.5253% . The rise in yields accelerated after the U.S. central bank turned hawkish at last week's monetary policy meeting, reinforcing the market view for a sooner-than-expected Fed taper. The euro was down 0.1% versus the dollar at $1.1681 . Earlier in the session, it hit a six-week low of $1.1668. Immediate resistance can be seen at 1.1710 (38.2%fib), an upside break can trigger rise towards 1.1742(50%fib).On the downside, immediate support is seen at 1.1670(23.6%fib), a break below could take the pair towards 1.1600 (Psychological level).
GBP/USD: Sterling fell versus a strengthening dollar on Tuesday after U.S. treasury yields jumped to the highest in almost three months following hawkish U.S. Federal Reserve remarks. U.S. yields have surged since last week’s Federal Reserve meeting where it said it may start tapering stimulus as soon as November and flagged interest rate increases could follow sooner than expected. Tuesday’s remarks from Fed Chair Jerome Powell signalled nervousness about inflation, and pushed U.S. 10-year yields above 1.54% to the highest since mid June and also led markets to price higher future inflation. Immediate resistance can be seen at 1.3583 (38.2%fib),an upside break can trigger rise towards 1.3638 (50%fib).On the downside, immediate support is seen at 1.3524(23.6%fib), a break below could take the pair towards 1.3492(Lower BB).
USD/CAD: The Canadian dollar weakened against the greenback on Tuesday as higher U.S. bond yields offset further gains for oil prices, with the loonie pulling back its strongest level in nearly three weeks.The loonie was trading 0.4% lower at 1.2675 to the greenback . Earlier in the session, the currency touched its strongest since Sept. 10 at 1.2593. The decline for the loonie came as the U.S. dollar climbed to its highest level in more than five weeks against a basket of major currencies. GDP data for July is due on Friday, which could offer further clues on the strength of the domestic economy. Immediate resistance can be seen at 1.2684 (38.2%fib), an upside break can trigger rise towards 1.2774 (23.6%fib).On the downside, immediate support is seen at 1.2619(50%fib), a break below could take the pair towards 1.2534 61.8%fib).
USD/JPY: The dollar rose against yen on Tuesday as U.S. treasury yields jumped to the highest in almost three months following hawkish U.S. Federal Reserve remarks. U.S. Treasury yields continued rising, with 10-year yields reaching their highest level since June, as inflation expectations heated up and fears grew that the U.S. Federal Reserve could shorten its timeline for tightening its monetary policy. On the data front, conference board report showed consumer confidence weakened unexpectedly in September to the lowest level since February. Strong resistance can be seen at 111.49(23.6%fib), an upside break can trigger rise towards 112.00(Psychological level).On the downside, immediate support is seen at 111.02(38.2%fib), a break below could take the pair towards 110.65(50%fib).
Equities Recap
European stocks sank to their lowest in a week on Tuesday as a surge in government bond yields knocked high-growth technology shares, with fresh signs of a slowdown in China’s economy weighing on investor sentiment.
UK's benchmark FTSE 100 closed down by 0.50 percent, Germany's Dax ended down by 2.09 percent, France’s CAC finished the day down by 2.17 percent. .
Wall Street stocks ended sharply lower on Tuesday in a broad sell-off driven by rising U.S. Treasury yields, deepening concerns over persistent inflation, and contentious debt ceiling negotiations in Washington.
Dow Jones closed down by 1.63% percent, S&P 500 closed down by 2.04% percent, Nasdaq settled down by 2.83% percent.
Treasuries Recap
U.S. Treasuries extended their sell-off into a fourth day on Tuesday with the 10-year yield reaching a level last seen in mid-June, while inflation expectations rose.
The benchmark 10-year yield climbed as high as 1.567% and was last up 4.3 basis points at 1.527%. Yields on two- and five-year notes reached their highest levels since the first quarter of 2020.
Commodities Recap
Gold prices dropped more than 1% to hit a seven-week low on Tuesday, as the dollar strengthened and U.S. Treasury yields surged on expectations of a sooner-than-expected hike in interest rates by the Federal Reserve.
Spot gold was down 0.8% at $1,736.81 per ounce by 01:43 p.m. EDT (1743 GMT), after falling to its lowest since Aug. 11 to $1,726.19 earlier in the session.U.S. gold futures settled 0.8% lower at $1,737.5 per ounce.
Brent oil dipped on Tuesday after topping $80 per barrel for the first time in nearly three years, as a five-day rally ran out of steam with investors locking in profits.
Brent dipped 44 cents, or 0.6%, to $79.09 a barrel, after reaching its highest level since October 2018 at $80.75.
U.S. West Texas Intermediate (WTI) crude fell 16 cents, or 0.2%, to $75.29 a barrel, after hitting a session high of $76.67, highest since July.
