Market Roundup
• US Employment Trends Jun 133.07, 133.32 previous.
• US Consumer Credit May 18.41b, 12.60b forecast, 12.93b previous.
• US consumers set strong spending plans, see improved job prospects: NY Fed survey.
• Fed survey points to stronger consumption growth, with respondents expecting to spend 3.3% more in the year ahead versus 2.6% in May.
• US aims for UN vote on North Korea sanctions within weeks - Diplomats.
• Trump presses congressional Republicans to pass healthcare plan.
• Britain should give more rights to "gig economy" workers, review to say - BBC.
• France rows back on tax cut delay as labour reform debate opens.
• Iraqi PM declares victory over Islamic State in Mosul.
• Brazil's Gov't will take measures as needed to meet budget target this year: planning min.
Looking Ahead - Economic Data (GMT)
• 01:30 Australia NAB Business Conditions Jun, 12 previous
• 01:30 Australia NAB Business Confidence Jun, 7 previous
• 01:30 Australia Housing Finance MM May 1.5% forecast, -1.9% previous
• 01:30 Australia Invest Housing Finance May, -2.3% previous
Looking Ahead - Events, Other Releases (GMT)
• 16:00 Fed’s Lael Brainard speaks at an event hosted by the Federal Reserve Bank of New York, NY
• 17:20 Minneapolis Fed President Neel Kashkari participates in a Town Hall, Minneapolis
Currency Summaries
EUR/USD is likely to find support at 1.1368 levels and currently trading at 1.1403 levels. The pair has made session high at 1.1408 and hit lows at 1.1381 levels. Euro declined against the dollar on Monday as investors consolidated positions after last week's strong U.S. non-farm payrolls report, which has kept the Federal Reserve on track towards raising interest rates at least once more this year. The robust U.S. jobs report released last Friday, even with low wage growth, affirmed expectations that the world's largest economy was steadily improving and supported the Fed's tightening path. That has pushed dollar, which have been rising anyway the last few weeks amid a round of generally solid U.S. economic data. The dollar index, which tracks the greenback against six major rivals, traded flat at 96.005. For the rest of the week, the focus will be on Fed Chair Janet Yellen's testimony to the congress, which is expected to cover recent policy decisions and the state of the economy.
GBP/USD is supported in the range of 1.2838 levels and currently trading at 1.2883 levels. It reached session high at 1.2888 and dropped to session low at 1.2851 levels. Sterling dipped against the dollar on Monday as run of lacklustre data added to doubt over the Bank of England's recent warnings that it is on the verge of raising borrowing costs. Surveys on Monday showed that major companies have curtailed investment plans and consumers have spent less on their credit cards, adding to a picture of a British economy struggling to regain momentum after a soft start to the year. A strong U.S. payrolls report on Friday afternoon added to the pain for the pound after unexpected falls in already slow UK construction, manufacturing and industrial output. That raises the stakes ahead of UK wage and unemployment numbers this week. Poor readings on those could further undermine the credibility of Bank officials' statements about possible rate increases in the coming months. Sterling traded as low as $1.2855 on Monday, its weakest since June 28, before edging up to $1.2878 by 1900 GMT. That was still down 0.1 percent on the day. It was flat against the euro at 88.51 pence.
USD/CAD is supported at 1.2858 levels and is trading at 1.2869 levels. It has made session high at 1.2907 and lows at 1.2868 levels. The Canadian dollar edged higher against its U.S. counterpart on Monday as Canadian dollar strengthened as oil recovered while, while investors awaited a Bank of Canada interest rate decision on Wednesday. Oil prices recovered, but rising drilling activity in the United States and uncertainty over Libyan and Nigerian production cuts clouded the future supply outlook. On Friday, the loonie touched its strongest in nearly 10 months at C$1.2860 after stronger-than-expected domestic jobs data boosted chances of a rate increase as soon as this week. Forecasters are divided on whether the central bank will hike rates on Wednesday but data from the OIS index swaps market shows that money markets are almost fully priced for an increase, while an 80 percent chance of a second hike has been implied by December.
AUD/USD is supported around 0.7576 levels and currently trading at 0.7605 levels. It hit session high at 0.7605 and made session lows at 0.7585 levels. The Australian dollar struggled for direction against U.S. counterpart on Monday but gained on a weakening Japanese yen as the outlook for interest rates globally continued to diverge. The Australian dollar was stuck at $0.7610, well off the recent high of $0.7712. It got as low as $0.7573 on Friday when an upbeat report on U.S. jobs added to the case for a further rise in rates there and pushed up the greenback. Traders expected monetary tightening from many central banks. That rationale was bolstered by better than expected U.S. jobs data and strong German export figures. These also fuelled optimism about the global growth outlook, encouraging investors to ditch safe heaven assets for riskier assets. Federal Reserve Chair Janet Yellen's semi-annual testimony is the key highlight of this week for investors looking for cues on further rate hikes. She will testify on Wednesday and Thursday.
Equities Recap
European stocks closed higher on Monday, underpinned by financials and basic resources, as mergers and acquisitions rumbled on with some broker notes also prompting individual stock moves.
UK's benchmark FTSE 100 closed up by 0.3 percent, the pan-European FTSEurofirst 300 ended the day up by 0.46 percent, Germany's Dax ended up by 0.4 percent, France’s CAC finished the day up by 0.5 percent.
U.S. stocks edged higher on Monday afternoon, led by gains in technology stocks as investors were optimistic ahead of earnings.
Dow Jones closed down by 0. 22 percent, S&P 500 ended down 0. 0.10 percent, Nasdaq finished the day up by 0.20 percent.
Treasuries Recap
U.S. Treasury yields slipped on Monday after rising for more than a week, in line with weakness in European markets, as investors consolidated positions following a strong U.S. non-farm payrolls report that kept the Federal Reserve on track to raise interest rates at least once more this year.
The benchmark 10-year Treasury yields fell to 2.374 percent, from 2.393 percent last Friday. After Friday's jobs report, U.S. 10-year yields hit an eight-week high of 2.398 percent.
U.S. 30-year yields slid to 2.927 percent, from 2.935 percent last Friday. They hit a more than six-week peak of 2.943 percent after the U.S. jobs data.
On the front-end of the curve, U.S. two-year yields slipped to 1.391 percent, from Friday's 1.407 percent.
Commodities Recap
Gold prices edged up on Monday from their lowest since mid-March in choppy trade, after nearing technical support and as traders awaited signals from central banks on interest rate hikes.
Spot gold, which dropped 2.3 percent last week, was up 0.07 percent at $1,213.61 per ounce by 2:32 p.m. EDT (1832 GMT), turning up after hitting $1,204.45, the lowest since March 15.
U.S. gold futures for August delivery settled up $3.50, or 0.29 percent, at $1,213.20 per ounce.
Oil prices rose modestly on Monday, but increased drilling activity in the United States and uncertainty over Libyan and Nigerian production cuts clouded the future supply outlook.
U.S. crude futures settled up 17 cents or 0.4 percent to $44.40 a barrel, while Brent crude futures also rose 17 cents or 0.36 percent to $46.88 a barrel.
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