Market Roundup
• U.S. CPI rises in July
• Dollar soars against yen after U.S. makes some concessions
• U.S. to delay some tariffs on Chinese exports
• Oil gains 5% on easing U.S.-China trade tensions
• US Jul Core CPI (YoY), 2.2%, 2.1% forecast,2.1% previous
• US Jul Core CPI (YoY), 0.3%, 0.2% forecast,0.3% previous
• US Jul Core CPI (MoM), 263.57, 263.57 previous
• US Jul Core CPI (MoM), 0.3%, 0.3% forecast,0.1% previous
• US Jul Real Earnings (MoM) -0.3% forecast,0.2% previous
• US Redbook (YoY) 4.4%, 5.1% previous
• US Redbook (YoY) -2.0%,1.1% previous
• US Jul Cleveland CPI (MoM) 0.3%,0.3% previous
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Jun Core Machinery Orders (YoY) -0.6%,-3.7% previous
• 23:50 Japan Jun Core Machinery Orders (MoM) -1.0%,-7.8% previous
• 01.30 Australia Aug Westpac Consumer Sentiment -4.1% previous
• 01.30 Australia Wage Price Index (YoY) (Q2) 2.3% forecast , 2.3% previous
• 01.30 Australia Wage Price Index (QoQ) (Q2) 0.5% forecast , 0.5% previous
• 02:00 China Jul China Fixed Asset Investment (YoY) 5.9% forecast , 5.8% previous
• 02:00 China Jul Industrial Production (YoY) 6 % forecast , 6.3% previous
• 02:00 China Jul Chinese Industrial Production YTD (YoY) 6 % forecast , 6.3% previous
• 02:00 China Chinese Unemployment Rate 5.1% previous
Looking Ahead - Events, Other Releases (GMT)
No Significant Events
Currency Summaries
EUR/USD: The euro declined against the U.S. dollar on Tuesday, after the United States reported that consumer prices in July increased. The Labor Department on Tuesday reported that the consumer price index increased 0.3% last month, lifted by gains in the cost of energy products and a range of other goods. The CPI had edged up 0.1% for two straight months. In the 12 months through July, the CPI increased 1.8% after advancing 1.6% in June. Economists polled had forecast the CPI would accelerate 0.3% in July and rise 1.7% on a year-on-year basis. Financial markets have fully priced in an interest rate cut in September. Expectations that rates will be cut by 25 basis points rose to 92.7% from 84.6% a day prior as fewer traders bet on a more dramatic 50-basis-point cut next month. Immediate resistance can be seen at 1.1238 (50 DMA), an upside break can trigger rise towards 1.1290 (200 DMA).On the downside, immediate support is seen at 1.1162 (11 DMA), a break below could take the pair towards 1.1100 (Psychological level).
GBP/USD: Sterling held near a 2-1/2 year low against dollar on Tuesday, as concerns about a no-deal Brexit dominated sentiment despite data showing wage growth in the United Kingdom rose to an 11-year high. Britain's labour market showed unexpected strength in the second quarter with total earnings growth, including bonuses, rising by an annual 3.7% in the three months to June, the highest rate since June 2008. Strong labour data could put pressure on the Bank of England to hold interest rates. Presently, money markets give a 68% chance of a one quarter point rate cut by end-December. Immediate resistance can be seen at 1.2116 (11 DMA), an upside break can trigger rise towards 1.2207 (Aug 6th high).On the downside, immediate support is seen at 1.2017 (38.2% retracement level), a break below could take the pair towards 1.1964 (Lower Bollinger Band).
USDCAD: The Canadian dollar strengthened to its highest in nearly three weeks against its U.S. counterpart on Tuesday after news showed U.S. and Chinese officials held a telephone call to discuss tariffs and planned another call in two weeks, easing concerns about the U.S.-Sino trade war.The Trump administration will delay imposing a 10% tariff on certain Chinese products, including laptops and cell phones, that had been scheduled to start next month, the Office of the U.S. Trade Representative later said. The Canadian dollar was trading 0.08% higher at 1.3227 to the greenback. The currency pair traded in a range of 1.3313 to 1.3397. Immediate resistance can be seen at 1.3295 (Daily High), an upside break can trigger rise towards 1.3341 (Bollinger Bands).On the downside, immediate support is seen at 1.3168 (21 DMA), a break below could take the pair towards 1.3100 (Psychological level).
USD/JPY: The U.S. dollar strengthened against the yen on Tuesday, after the Trump administration said it would delay 10% tariffs on some Chinese products scheduled to begin next month, a significant concession in the trade conflict between Washington and Beijing. The U.S. Trade Representative said it would delay tariffs on laptops and cellphones, among other products, set to be imposed in September. The U.S. dollar rose 1.49% to 106.85 Japanese yen per dollar. The yen is a safe-haven asset which benefits in moments of geopolitical uncertainty and during economic downturns. The U.S.-China trade war had begun to affect economic growth in the United States and raise fears that the conflict could lead to a recession. Strong resistance can be seen at 105.05 (Daily Low), an upside break can trigger rise towards 104.60 (Psychological level).On the downside, immediate support is seen at 105.05 (Daily Low), a break below could take the pair towards 104.60 (Lower Bollinger Band).
Equities Recap
European shares fell on Tuesday, as a slew of economic and geopolitical worries including Italy and Argentina’s political uncertainty and unrest in Hong Kong, compelled investors to take refuge in safe harbors like bonds and gold.
The UK's benchmark FTSE 100 closed up by 0.33 percent, Germany's Dax ended up by 0.60 percent, and France’s CAC finished the up by 0.33 percent.
U.S. stocks surged almost 2% on Tuesday as the Trump administration said it would delay 10% tariffs on some Chinese products, including laptops and cell phones, driving a 5% surge in shares in iPhone maker Apple Inc.
Dow Jones closed up by 1.46 percent, S&P 500 ended up 1.58 percent, Nasdaq finished the day up by 1.97 percent.
Treasuries Recap
U.S. Treasury yields rose on Tuesday, as risk appetite improved, after the Trump administration delayed imposing a 10% import tariff on laptops, cellphones, video game consoles and a wide range of other products made in China, easing trade tensions between the two world's largest economies for now.
U.S. 10-year note yields hit session highs, while those on 30-year bonds rallied from more than three-year lows. Traders earlier were bracing for 30-year yields sinking to a record low below 2.08%.
Commodities Recap
Gold fell 2% on Tuesday, reversing course from earlier in the session when it scaled a six-year peak, after the United States said it would delay tariffs on some Chinese products and on news that both sides agreed to continue trade talks.
Spot gold was down 0.7% at $1,501.36 per ounce at 12:29 p.m. EDT (1629 GMT), having earlier hit its highest level since April 2013 at $1,534.31.U.S. gold futures were down 0.3% to $1,512.6 an ounce.
Oil prices rose almost 5% on Tuesday after the United States said it would delay imposing a 10% tariff on certain Chinese products, easing concerns over a global trade war that has pummeled the market in recent months.
Brent futures were up $2.69, or 4.6%, at $61.26 a barrel by 1:33 p.m. EDT (1733 GMT), while U.S. West Texas Intermediate (WTI) crude was up $2.07, or 3.8%, at $57.00.
