Market Roundup
- BOJ to debate policy change in July to make its stimulus sustainable - sources
- BOJ policy tweak prospects jolt Japanese markets, yen
- G20 calls for stepped-up trade dialogue; no agreement on path forward
- China launches probe into stainless steel imports from EU, Japan, S.Korea, Indonesia
- China c.bank unexpectedly injects 502 bln yuan through 1-year MLF, rate unchanged
- France's Macron orders shake-up of presidency after bodyguard scandal-source
- Pompeo assails Iran's leaders, compares them to 'mafia'
- UK households' mood boosted by easing inflation squeeze - IHS Markit
- British reject May's Brexit plan, some turn to Boris and far right - poll
Economic Data Ahead
- (1000 ET/1400 GMT) EZ Consumer Confid. Flash, -0.70 f'cast, -0.50 prev
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index plunged after U.S. President Donald Trump reinforced his criticism of the Federal Reserve's policy on hiking interest rates and accused the European Union and China of manipulating their currencies. The greenback against a basket of currencies trades 0.1 percent down at 94.35, having touched a low of 94.21 earlier, its lowest since July 11. FxWirePro's Hourly Dollar Strength Index stood at -52.16 (Bearish) by 0500 GMT.
EUR/USD: The euro rose to a near 2-week peak as investors turned bullish ahead of Thursday’s European Central bank rate decision and President Mario Draghi's presser. The ECB is expected to keep monetary policy unchanged on July 26, while Draghi could warn on protectionism. The European currency traded 0.2 percent up at 1.1737, having touched a high of 1.1750, its highest since July 11. FxWirePro's Hourly Euro Strength Index stood at -1.13 (Neutral) by 0500 GMT. Investors’ attention will remain on the Eurozone prelim consumer confidence, ahead of the U.S. existing home sales and Chicago Fed National Activity Index. Immediate resistance is located at 1.1762 (June 10 High), a break above targets 1.1801 (June 13 High). On the downside, support is seen at 1.1671 (21-DMA), a break below could drag it till 1.1600.
USD/JPY: The dollar slumped to a 2-week low below the 111.00 handle after U.S. President Donald Trump criticized the Federal Reserve's interest rate tightening policy. The major was trading 0.5 percent down at 110.90, having hit a low of 110.75 earlier, its lowest since July 9. FxWirePro's Hourly Yen Strength Index stood at 89.69 (Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, as U.S. existing home sales and Chicago Fed National Activity Index. Immediate resistance is located at 111.50, a break above targets 111.87 (Jan 11 High). On the downside, support is seen at 110.50 (July 3 low), a break below could take it lower 109.96.
GBP/USD: Sterling surged to a 6-day peak, as the U.S. dollar weakened after U.S. President Donald Trump expressed discomfort with the greenback's strength. The major traded 0.1 percent up at 1.3138, having hit a low of 1.2957 on Thursday; it’s lowest since Sept. 2017. FxWirePro's Hourly Sterling Strength Index stood at -68.08 (Bearish) 0500 GMT. Immediate resistance is located at 1.3187 (21-DMA), a break above could take it near 1.3244 (July 12 High). On the downside, support is seen at 1.2957 (July 19 Low), a break below targets 1.2910. Against the euro, the pound was trading 0.1 percent down at 89.26 pence, having hit a low of 89.57 on Friday, it’s lowest since March 7.
AUD/USD: The Australian dollar steadied above the 0.7400 handle as the greenback came under pressure since Trump last week stated that he was concerned about the potential impact of a stronger dollar on American exports. The Aussie trades 0.1 percent up at 0.7421, having hit a low of 0.7317 on Friday; it’s lowest since July 3. FxWirePro's Hourly Aussie Strength Index stood at -8.55 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7395 (5-DMA), a break below targets 0.7335 (June 29 Low). On the upside, resistance is located at 0.7444 (July 6 High), a break above could take it near 0.7483 (July 10 High).
NZD/USD: The New Zealand dollar rallied to a 6-day peak as President Donald Trump's comments against U.S. dollar strength weakened that currency lower across the board. The Kiwi trades 0.1 percent up at 0.6813, having touched a high of 0.6824 earlier, its highest level since July 17. FxWirePro's Hourly Kiwi Strength Index was at 5.10 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6860, a break above could take it near 0.6900. On the downside, support is seen at 0.6736 (June 29 Low), a break below could drag it below 0.6700.
Equities Recap
Asian shares tumbled amid fears of more protectionist measures from the United States, while the greenback slumped against a basket of currencies after U.S. President Donald Trump criticized the Federal Reserve's tightening policy.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.2 percent.
Tokyo's Nikkei declined 1.3 percent to 22,396.99 points, Australia's S&P/ASX 200 index eased 0.9 percent to 6,227.60 points, and South Korea's KOSPI fell 1.0 percent to 2,266.24 points.
Shanghai composite index rose 0.9 percent to 2,855.76 points, while CSI300 index was trading 0.8 percent up at 3,519.55 points.
Hong Kong’s Hang Seng was trading 0.3 percent higher at 28,301.70 points. Taiwan shares added 0.2 percent to 10,946.89 points.
Commodities Recap
Crude oil prices declined as finance ministers and central bank governors from the G20 warned that global economic growth risks have increased, triggering concerns about fuel demand. International benchmark Brent crude was trading 0.1 percent down at $72.94 per barrel by 0510 GMT, having hit a low of $71.19 on Wednesday, its lowest since April 17. U.S. West Texas Intermediate was trading 0.1 percent higher at $68.11 a barrel, after falling as low as $67.08 on Tuesday, its lowest since June 22.
Gold prices steadied after falling to yearly lows last week as the dollar eased to its lowest in nearly two weeks after U.S. President Donald Trump criticized the Federal Reserve's interest rate tightening policy. Spot gold was trading flat at $1,231.9 an ounce by 0513 GMT, having hit a low of $1,211.45 on Thursday, its lowest since early July 2017. U.S. gold futures for August delivery were 0.1 percent higher at $1,232.10 an ounce.
Treasuries Recap
The Japanese 10-year government bond yields hit a 6-month high as investors’ speculation rose over a possible change in the monetary policy by the Bank of Japan (BoJ) ahead of the central bank’s two-day meeting on July 30-31. The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, jumped 5 basis points to 0.08 percent, the yield on the long-term 30-year surged 8-1/2 basis points to 0.76 percent and the yield on short-term 2-year remained 2 basis points higher at -0.10 percent.
The Australian bonds slumped on the first trading day of the week as U.S. Treasuries saw a downward pressure along the curve as investors absorbed more hostile commentary from President Donald Trump.
The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 4-1/2 basis points to 2.671 percent, the yield on the long-term 30-year Note also jumped 4-1/2 basis points to 3.145 percent and the yield on short-term 2-year up 1 basis point to 2.062 percent.
The New Zealand bonds closed Monday’s session on a lower note amid a muted trading session that witnessed data of no major economic significance. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, jumped nearly 2-1/2 basis points to 2.83 percent, the yield on the long-term 20-year note also surged 2-1/2 basis points to 3.13 percent and the yield on short-term 2-year closed 1-1/2 basis points higher at 1.86 percent.
