Market Roundup
- Reuters Poll- Japan Inc sees 2% CPI goal unrealistic, not keen on more ease
- 46% want BoJ even-keel, 40% say CB should seek exit, no plans to up prices
- Japan Inc’s pension obligations shrink for first time in 8 years - Nikkei
- UK outlines ways of resolving cross-border legal disputes post-Brexit
- Britain pushes plan on goods and services in post-Brexit talks, EU sceptical
- UKTsy Macpherson - Quantitative easing is like heroin - Guardian
- Hard Labour: NZ's Ardern takes tougher line on immigration
- Trump commits to more troops in Afghanistan, vows 'fight to win'
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Jul PSNB Ex-banks (GBP), 0.950 bln eyed, last 6.854 bln
- (0430 ET/0830 GMT) Great Britain Jul PSNB (GBP), -0.200 bln eyed, last 6.278 bln
- (0500 ET/0900 GMT) Germany Aug ZEW Economic sentiment, 15.0 eyed, last 17.5
- (0500 ET/0900 GMT) Germany Aug Current conditions, 85.5 eyed, last 86.4
Key Events Ahead
- (0800 ET/1200 GMT) ECB's Constancio participates in "Inequality and the Distributional Impact of Macroeconomic Policies", of the European Economic Association in Portugal
- N/A Sweden USD1bn 5yr Global via CACIB/JPM/Nomura/Scotia
- N/A World Bank marketing a 3yr USD Global via BAML/Citi/JPM/TD
FX Beat
DXY: The dollar continued to consolidate within narrow ranges versus its major peers, ahead of the annual central banking conference in Jackson Hole. The greenback against a basket of currencies traded 0.2 percent up at 93.23, having touched a high of 94.15 on Wednesday, it’s highest since July 26. FxWirePro's Hourly Dollar Strength Index stood at -81.17 (Slightly Bearish) by 0500 GMT.
EUR/USD: The euro eased after rising to a 1-week high in the previous session, as German Zew survey indices are expected to show a slight deterioration in the economic sentiment. The European currency traded flat at 1.1807, having touched a high of 1.1828 the session before, its highest since Aug. 14. FxWirePro's Hourly Euro Strength Index stood at -3.20 (Neutral) by 0400 GMT. Investors’ attention will remain on Eurozone ZEW Survey ahead of the U.S. housing price index. Immediate resistance is located at 1.1838 (Aug 14 High), a break above targets 1.1889. On the downside, support is seen at 1.1720 (61.8% retracement 1.1370 and 1.1909), a break below could drag it near 1.1638 (50.0% retracement 1.1370 and 1.1909).
USD/JPY: The dollar rose after falling for four consecutive sessions, with traders focusing on the annual central banking conference in Jackson Hole this week for insights on the outlook for monetary policy. The major was trading 0.3 percent up at 109.24, having hit a low of 108.60 on Friday, its lowest since Apr. 19 2016. FxWirePro's Hourly Yen Strength Index stood at 84.51 (Slightly Bullish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. housing price index for further momentum. Immediate resistance is located at 109.99 (61.8% retracement of 112.19 and 108.60), a break above targets 110.41 (50.0% retracement of 112.19 and 108.80). On the downside, support is seen at 109.00, a break below could take it near 108.63 (Previous Session Low).
GBP/USD: Sterling declined, halting its 2-day winning streak as doubts around UK economic growth and Brexit talks continued to weigh on the British currency. The major traded 0.1 percent down at 1.2885, having hit a low of 1.2831 on Friday, its lowest since July 12. FxWirePro's Hourly Sterling Strength Index stood at -100.17 (High Bearish) by 0400 GMT. Investors’ focus will remain on the UK’s CBI industrial trends survey, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2933 (10-DMA), a break above could take it near 1.3000. On the downside, support is seen at 1.2831 (August 18 Low), a break below targets 1.2811 (July 12 Low). Against the euro, the pound was trading flat at 91.64 pence, having hit a fresh 10-month low of 91.64.
AUD/USD: The Australian dollar eased as traders were wary of geopolitical tensions in North Korea and held their bets ahead of an annual gathering of central bankers at Jackson Hole later in the week. The Aussie trades flat at 0.7936, having hit a high of 0.7962 on Wednesday, it’s strongest since Aug. 04. FxWirePro's Hourly Aussie Strength Index stood at 15.46 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7869 (August 18 Low), a break below targets 0.7807. On the upside, resistance is located at 0.7950, a break above could take it near 0.7927 (Aug 17 High).
NZD/USD: The New Zealand dollar consolidated within a narrow range, as investors awaited the annual central banking conference in Jackson Hole this week. The Kiwi trades flat at 0.7324, having touched a low of 0.7223 on Wednesday, its lowest level since July 12. FxWirePro's Hourly Kiwi Strength Index was at -18.78 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7351 (61.8% retracement of 0.7558 and 0.7223), a break above could take it near 0.7381 (21-DMA). On the downside, support is seen at 0.7300 (10-DMA), a break below could drag it till 0.7275 (Aug 18 Low)
Equities Recap
Asian shares edged higher, following overnight gains on Wall Street even as investors remained cautious ahead of the annual central banking conference in Jackson Hole later this week.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent.
Tokyo's Nikkei fell 0.1 percent to 19,367.05 points, Australia's S&P/ASX 200 index rose 0.4 percent to 5,747.40 points and South Korea's KOSPI climbed 0.4 percent to 2,363.29 points.
Shanghai composite index gained 0.1 percent to 3,290.18 points, while CSI300 index was trading 0.3 percent up at 3,751.05 points.
Hong Kong’s Hang Seng was trading 0.9 percent higher at 27,408.94 points. Taiwan shares added 0.6 percent to 10,388.15 points.
Commodities Recap
Crude oil prices rose, after falling from a 1-week high in the previous session, as indications that supply is gradually tightening, especially in the United States boosted market sentiment. International benchmark Brent crude was trading 0.3 percent up at $51.84 per barrel by 0414 GMT, having hit a high of $52.93 on Friday, its strongest since Aug. 8. U.S. West Texas Intermediate was trading 0.4 percent at $47.71 a barrel, after rising as high as $48.71 last week, its highest since Aug. 14.
Gold prices declined, amid a steady dollar, with investors eying developments on the geopolitical front and remaining cautious ahead of an annual central banking meeting in Jackson Hole later this week. Spot gold fell 0.1 percent to $1,288.83 an ounce by 0420 GMT, having touched a high at $1,300.80 per ounce in the previous session, its highest since Nov. U.S. gold futures for December delivery were down 0.1 percent to $1,295.30 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.193 percent higher by 0.014 bps, while 5-year yield was 0.011 bps up at 1.762 percent.
The Japanese government bonds remained narrowly mixed, as investors wait to watch the country’s consumer price inflation for the month of July, scheduled to be released on August 24. The yield on the benchmark 10-year Treasury note rose 1/2 basis point to 0.04 percent, the yield on long-term 30-year traded fell 1 basis point to 0.84 percent and the yield on short-term 2-year also hovered around -0.13 percent.
The Australian bonds traded nearly flat as investors await cues from the Federal Reserve’s Jackson Hole Economic Policy Symposium scheduled for this Friday in Wyoming. The yield on the benchmark 10-year Treasury note traded tad higher at 2.65 percent, the yield on 15-year note remained steady at 2.95 percent and the yield on short-term 2-year rose nearly 1 basis point to 1.82 percent.
The New Zealand bonds closed flat as investors remained side-lined in any major trading activity and as market participants look forward to the release of the country’s trade balance for the month of July, scheduled on August 23. At the time of closing, the yield on the benchmark 10-year Treasury note slumped 3-1/2 basis points to 2.88 percent, the yield on 7-year note plunged 3 basis points to 2.73 percent and the yield on short-term 2-year ended 2-1/2 basis points lower at 2.04 percent.
The Canadian government bond prices were mostly lower across the maturity curve, with the two-year price down one Canadian cent to yield 1.25 percent and the benchmark 10-year falling eight Canadian cents to yield 1.88 percent. The Canada-U.S. two-year bond spread stood at -5.3 basis points, while the 10-year spread stood at -30.1 basis points.
