Market Roundup
- Canada rejoins NAFTA talks as U.S. autos tariff details emerge
- Mexico-U.S. deal includes Mexican auto export cap -sources
- U.S. Senate votes to confirm Fed vice chair nominee Clarida
- U.S. military says no plans to suspend more major exercises on Korean peninsula
- China's state planner head says economy faces increased risks in H2
- BOJ's Suzuki: need to watch policy impact on bond market
- UK Aug Shop prices +0.1% yy vs -0.3% prev; first increase in over 5 years - BRC
Economic Data Ahead
- No major economic data releases
Key Events Ahead
- N/A French Finance Minister Bruno Le Maire and German Finance Minister Olaf Scholz speak at the annual summer conference of MEDEF employers' association in Paris
FX Beat
DXY: The dollar index steadied after falling to a 4-week low in the previous session, amid optimism over the U.S.-Mexico trade deal. The greenback against a basket of currencies trades 0.2 percent up at 94.87, having touched a low of 94.43 on Tuesday, its lowest since July 31. FxWirePro's Hourly Dollar Strength Index stood at -77.83 (Slightly Bearish) by 0500 GMT.
EUR/USD: The euro eased after rising to a 4-week peak in the prior session after European Central Bank's chief economist Peter Praet warned risks associated with the central bank's ultra-easy monetary policy after years of economic expansion. The European currency traded 0.1 percent down at 1.1685, having touched a high of 1.1733 the day before, its highest since July 31. FxWirePro's Hourly Euro Strength Index stood at 81.36 (Slightly Bullish) by 0500 GMT. Investors’ attention will remain on series of data from Eurozone economies, ahead of the U.S. prelim gross domestic product, personal consumption expenditures and pending home sales. Immediate resistance is located at 1.1747 (July 31 High), a break above targets 1.1790 (July 9 High). On the downside, support is seen at 1.1625 (5-DMA), a break below could drag it till 1.1538 (21-DMA).
USD/JPY: The dollar edged down against the Japanese yen, as a lack of progress in the trade negotiations between the U.S. and China could worsen risk sentiment. The major was trading 0.05 percent down at 111.17, having hit a high of 111.48 on Friday, its highest since August 6. FxWirePro's Hourly Yen Strength Index stood at -84.98 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. prelim gross domestic product, personal consumption expenditures and pending home sales. Immediate resistance is located at 111.52 (August 6 High), a break above targets 111.73 (August 2 High). On the downside, support is seen at 110.77 (10-DMA), a break below could take it lower 110.31 (August 17 Low).
GBP/USD: Sterling eased, extending previous session losses after a survey showed house prices in London's overvalued market will fall this year and next and will decline if Britain fails to secure a deal ahead of its departure from the European Union. The major traded 0.1 percent down at 1.2854, having hit a high of 1.2931 on Tuesday; it’s highest since August 22. FxWirePro's Hourly Sterling Strength Index stood at -84.98 (Slightly Bearish) 0500 GMT. Immediate resistance is located at 1.2936 (August 22 High), a break above could take it near 1.3006 (August 6 High). On the downside, support is seen at 1.2817 (10-DMA), a break below targets 1.2729 (August 20 Low). Against the euro, the pound was trading 0.1 percent down at 90.85 pence, having hit a low of 90.98 earlier, it’s lowest since September 2017.
AUD/USD: The Australian dollar fell to a 5-day low, as investors traded cautiously as Washington prepared for another round of tariffs on Chinese goods. The Aussie trades 0.4 percent down at 0.7306, having hit a low of 0.7238 on Friday; it’s lowest since August 16. FxWirePro's Hourly Aussie Strength Index stood at 13.35 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7280 (August 10 Low), a break below targets 0.7252 (August 17 Low). On the upside, resistance is located at 0.7381 (August 21 High), a break above could take it near 0.7411 (August 3 High).
NZD/USD: The New Zealand dollar eased from a near 3-week peak touched in the previous session, amid looming deadline on tariffs with China. The Kiwi trades 0.2 percent down at 0.6694, having touched a high of 0.6726 on Tuesday, its highest level since 9 August. FxWirePro's Hourly Kiwi Strength Index was at -80.56 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6726 (August 28 High), a break above could take it near 0.6763 (August 8 High). On the downside, support is seen at 0.6653 (10-DMA), a break below could drag it below 0.6610 (August 20 Low).
Equities Recap
Asian shares surged amid optimism over the U.S.-Mexico trade deal, however, deadline on China tariffs weighed on investor sentiment.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.3 percent.
Tokyo's Nikkei surged 0.2 percent to 22,848.22 points, Australia's S&P/ASX 200 index rose 0.8 percent to 6,352.20 points, and South Korea's KOSPI gained 0.3 percent to 2,308.95 points.
Shanghai composite index fell 0.4 percent to 2,766.19 points, while CSI300 index traded 0.5 percent down at 3,382.52 points.
Hong Kong’s Hang Seng traded 0.1 percent lower at 28,334.23 points. Taiwan shares added 1.0 percent to 11,099.57 points.
Commodities Recap
Crude oil prices steadied after falling from recent highs, supported by falling supplies from Iran ahead of U.S. sanctions. International benchmark Brent crude was trading 0.05 percent up at $75.90 per barrel by 0519 GMT, having hit a high of $76.94 on Tuesday, its highest since July 11. U.S. West Texas Intermediate was trading 0.05 percent higher at $68.53 a barrel, after rising as high as $69.29 on Friday, its highest since August 8.
Gold prices surged after slumping as much as 1 percent from an over 2-week peak in the previous session, amid ongoing trade tensions between U.S. and China. Spot gold was up 0.3 percent at $1,204.12 an ounce at 0523 GMT, having hit a high of $1214.19 on Tuesday, its highest since August 10. U.S. gold futures were down 0.5 percent at $1,208.90 an ounce on Wednesday.
Treasuries Recap
The Australian government bond futures were weaker, with the three-year bond contract off 1.5 ticks at 97.930. The 10-year contract slipped 2 ticks to 97.42.
The New Zealand government bonds gained, sending yields 0.5 basis points lower towards the short end of the curve.
The Canadian government bond prices were lower across a steeper yield curve, with the two-year down 1 Canadian cent to yield 2.145 percent and the 10-year falling 16 Canadian cents to yield 2.316 percent.
