Market Roundup
• Brazil Jul Markit Composite PMI 51.6, 49 previous
• Brazil Jul Markit Compostite PMI 52.2, 48.2 previous
• US Jul Markit Composite PMI 52.6, 51.6 forecast, 51.6 previous
• US Jul Services PMI 53.0, 52.2 forecast, 52.2 previous
• US CB Jul Employment Trends Index 111.00, -109.30 previous
• US Jul ISM Non-Manufacturing PMI -53.7, 55.5forecast, 55.1 previous
• US Jul ISM Non-Manufacturing Business Activity -53.1, 58.3 forecast, 58.2 previous
• US Jul ISM Non-Manufacturing Employment 56.2, 55.0 previous
• US Jul ISM Non-Manufacturing New Orders 54.1, 58.9 previous
• US Jul ISM Non-Manufacturing Prices 56.5, 58.9 previous
Looking Ahead - Economic Data (GMT)
• 22:45 New Zealand Employment Change QoQ Q2, 0.3% forecast, -0.2%previous
• 22:45 New Zealand Labor Cost Index QoQ Q2, 0.7% forecast,0.3%% previous
• 22:45 New Zealand Labor Cost Index YoY Q2 2.1% forecast, 2.0% previous
• 22:45 New Zealand Participation Rate Q2 4.3% previous, 4.2% previous
• 23:01 UK Jul BRC Retail Sales Monitor 0.7% forecast, -1.6% previous
• 23:30 Japan Jun Household Spending YoY 1.3% forecasts, 4.0% previous
• 23:30 Japan Jun Household Spending MoM -3.0% forecast 5.5% previous
• 23:30 Japan Jun Overall Labor Cash Earnings -0.5% previous
• 23:30 Japan Jul Overtime Pay YoY 0.80% previous
• 23:30 Australia ANZ Job Advertisements (MoM) 4.6% previous
• 01:30 Australia Exports Jun MoM 4% previous
• 01:30 Australia Imports Jun MoM 1% previous
• 01:30 New Zealand Trade Balance 6.050B forecast 5.745B previous
• 01:30 New Zealand Inflation Expectations (QoQ) 2.0% previous
Looking Ahead - Events, Other Releases (GMT)
•04:30 The Reserve Bank of Australia's (RBA) monthly rate statement contains the outcome of bank's interest rate decision and discusses the economic conditions that influenced the decision. It can also give investors clues to the outcome of future decisions.A more dovish than expected statement could be taken as negative/bearish for the AUD, while a more hawkish than expected statement could be taken as positive/bullish for the AUD.
Currency Summaries
EUR/USD: The euro gained against the U.S. dollar on Monday, as escalating trade tension between the United States and China weighed on dollar. On Friday, China said it will fight back against U.S. President Donald Trump’s decision to impose an additional 10% tariff on $300 billion worth of Chinese imports. The tariffs may also force the Federal Reserve to again cut interest rates to protect the U.S. economy from trade-policy risks .Providing a further push for a second rate cut next month, U.S. July jobs data on Friday showed a slowdown in hiring and fewer hours for manufacturing workers.The euro was up 0.84 percent at $1.1199 . An index that tracks the dollar versus a basket of six major currencies was down 0.58at 97.53. Immediate resistance can be seen at 1.1236 (50 DMA), an upside break can trigger rise towards 1.1282 (Jul 19th high).On the downside, immediate support is seen at 1.1142 (5 DMA), a break below could take the pair towards 1.1139 (11 DMA).
GBP/USD: Sterling declined against dollar on Monday, as heightened worries of a no-deal Brexit and the growing probability of a general election after the October Brexit deadline weighed on sterling. Over the weekend, headlines suggested the UK parliament may not have time to stop Britain leaving the European Union without trade agreements in place even if it wants to. Prime Minister Boris Johnson and his cabinet have said multiple times they are ready to quit the EU on the Oct. 31 deadline, regardless of whether a deal is in place. But pro-EU members of parliament could seek to topple Johnson’s government by preparing for a “people versus the politicians” election after the UK quits in October. The pound was last down by 0.14% at $1.2139, though not far from last week’s January 2017 low of $1.2080.Immediate resistance can be seen at 1.2142 (Daily high), an upside break can trigger rise towards 1.2397 (11 DMA).On the downside, immediate support is seen at 1.2081 (Daily low), a break below could take the pair towards 1.2000 (Psychological level).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Monday, as the escalating trade war between the US and China along with global growth worries kept investors cautious. On Friday, China said it will fight back against US President Donald Trump's decision to impose an additional 10 per cent tariff on $300 billion worth of Chinese imports. Meanwhile, recent economic readings from the US cemented expectations that the Federal Reserve will cut interest rates again in September after it delivered its first rate reduction in more than a decade last month. The Canadian dollar was last trading down 0.09 percent at 1.3214 to the greenback. Immediate resistance can be seen at 1.3270 (Aug 2nd high), an upside break can trigger rise towards 1.3300 (Psychological level).On the downside, immediate support is seen at 1.3162 (11 DMA), a break below could take the pair towards 1.3121 (21 DMA).
USD/JPY: The dollar weakened against the Japanese yen on Monday, as on fears that China’s willingness to let the yuan slide in response to the latest U.S. tariff threat could further aggravate trade-related tensions between the world’s two largest economies. China on Monday let the yuan tumble beyond the key 7-per-dollar level for the first time in more than a decade, in a sign Beijing might be willing to tolerate further currency weakness after U.S. President Donald Trump vowed last week to impose 10% tariffs on the remaining $300 billion of Chinese imports from Sept. 1. Safe-haven assets, including the Japanese yen, government bonds and gold, rallied as investors cut back on riskier assets.The dollar was 0.50 percent lower versus the Japanese yen at 106.04. Strong resistance can be seen at 107.47 (Psychological level), an upside break can trigger rise towards 107.97 (11 DMA).On the downside, immediate support is seen at 105.79 (Daily low), a break below could take the pair towards 105.00 (Psychological level).
Equities Recap
European shares sank to a two-month low on Monday as a global sell-off spurred by trade tensions deepened, sending China’s yuan to its lowest in more than a decade and sinking trade-sensitive mining, luxury and technology stocks.
UK's benchmark FTSE 100 closed down by 2.47 percent, Germany's Dax ended down by 1.80 percent, France’s CAC finished the day up by 2.19 percent.
U.S. stock index futures diped on Monday as China’s yuan hit its lowest in a decade, spurring a continuation of a sell-off on trade concerns on Friday that generated the S&P 500’s worst weekly performance of 2019..
Dow Jones closed down by 2.90 percent, S&P 500 ended up by 2.98 percent, Nasdaq finished the down by 3.47 percent.
Treasuries Recap
U.S. Treasury yields tumbled on Monday, with 10-year yields hitting their lowest level since November 2016, as fears over escalation of U.S.-Chinese trade tensions renewed concerns about an economic downturn, spurring safe-haven demand for bonds.
The yields on benchmark 10-year Treasury notes were down 8.8 basis points at 1.7667%. They hit 1.743% earlier on Monday, which was their lowest since Nov. 9 2016, the day after Trump was elected president. The two-year yield, which is sensitive to traders' view on Fed policy, touched 1.587%, its lowest sinceNovember 2017. It was last 11.9 basis points lower at 1.6033%.
Commodities Recap
Gold rose to a more than six-year high on Monday, gaining more than 1%, as an escalating trade conflict between the United States and China sent investors scurrying for the safety of bullion..
Spot gold was up 1.5% at $1,462.40 per ounce as of 1301 GMT, after hitting its highest level since May 2013 at $1,464.60. U.S. gold futures rose 1.2% to $1,474.30.
Global oil benchmark Brent futures fell more than 3% on Monday on global growth concerns after U.S. President Donald Trump last week threatened China with more tariffs, which could limit crude demand from the world’s two biggest buyers.
Brent crude fell $2.08, or 3.36%, to settle at $59.81 a barrel.U.S. West Texas Intermediate (WTI) crude futures fell 97 cents, or 1.74%, to settle at $54.69 a barrel, finding some support from a draw in inventories at the Cushing, Oklahoma, storage hub and delivery hub for WTI.
