Market Roundup
- China angered at new U.S. defence act, to assess content
- Trump aide Bolton met Turkish envoy to discuss U.S. pastor -White House
- Musk says Silver Lake, Goldman advising on taking Tesla private
- China's July property investment grows at fastest pace in 2-years
- China Jul Industrial Output YY, 6.0%, 6.3% f'cast, 6.0% prev
- China Jul Urban Investment (ytd)yy, 5.5%, 6.0% f'cast, 6.0% prev
- China Jul Retail Sales YY, 8.8%, 9.1% f'cast, 9.0% prev
- Australia Jul NAB Business Conditions, 12, 15 prev
- Australia Jul NAB Business Confidence, 7, 6 prev
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Jun ILO Unemployment Rate, 4.2% f'cast, 4.2% prev
- (0430 ET/0830 GMT) Great Britain Jun Employment Change, 98k f'cast, 137k prev
- (0500 ET/0900 GMT) Germany Aug ZEW Economic Sentiment, -20.7 f'cast, -24.7 prev
- (0500 ET/0900 GMT) Germany Aug ZEW Current Conditions, 72.3 f'cast, 72.4 prev
- (0500 ET/0900 GMT) EZ Q2 GDP Flash Estimate YY, 2.1% f'cast, 2.5% prev
- (0500 ET/0900 GMT) EZ Industrial Production YY, 2.6% f'cast, 2.4% prev
Key Events Ahead
- (1100 ET/1500 GMT) Fed of New York issues its Q2 household debt and credit report
FX Beat
DXY: The dollar index held firm near recent peaks as worries over the collapse of the Turkish lira ebbed. The greenback against a basket of currencies trades 0.05 percent up at 96.30, having touched a high of 96.52 on Monday, its highest since July 2017. FxWirePro's Hourly Dollar Strength Index stood at 113.41 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro eased, hovering towards 13-month low touched in the previous session, ahead of Eurozone preliminary Q2 gross domestic product. Moreover, a rally in the greenback dented the bid tone around the major. The European currency traded 0.1 percent down at 1.1402, having touched a low of 1.1365, its lowest since July 2017. FxWirePro's Hourly Euro Strength Index stood at -119.41 (Highly Bearish) by 0500 GMT. Investors’ attention will remain on the economic data from the Eurozone and EZ prelim GDP and industrial production, ahead of the U.S. export and import price index. Immediate resistance is located at 1.1466 (38.2% retracement of 1.6282 and 1.1365), a break above targets 1.1497 (50% retracement). On the downside, support is seen at 1.1350, a break below could drag it till 1.1310.
USD/JPY: The dollar rebounded after falling to a 6-week low in the previous session, as the 10-year U.S. Treasuries yield bounced back to 2.877 percent from a 3-week low of 2.848 percent. The major was trading 0.1 percent up at 110.83, having hit a low of 110.11 earlier, its lowest since June 28. FxWirePro's Hourly Yen Strength Index stood at 121.54 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. export and import price index. Immediate resistance is located at 111.13 (50.0% retracement of 112.15 and 110.11), a break above targets 111.49 (21 -DMA). On the downside, support is seen at 109.96 (June 28 Low), a break below could take it lower 109.36 (June 25 Low).
GBP/USD: Sterling slumped, extending losses for the ninth straight session, amid growing unease among investors that Britain would leave the European Union without securing a trade deal. The major traded 0.05 percent down at 1.2760, having hit a low of 1.2722 on Friday; it’s lowest since June. 2017. FxWirePro's Hourly Sterling Strength Index stood at -44.66 (Neutral) 0500 GMT. Investors attention will remain on the UK labour data, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.2830 (23.6% retracement of 1.3173 and 1.2722), a break above could take it near 1.2948 (50% retracement). On the downside, support is seen at 1.2700, a break below targets 1.2665. Against the euro, the pound was trading 0.05 percent down at 89.405 pence, having hit a high of 89.12 on Monday, it’s highest since August 6.
AUD/USD: The Australian dollar steadied near a 1-1/2 year low touched in the previous session, after data earlier in the day showed domestic business conditions eased modestly in July but remained at levels consistent with solid activity, while hiring intentions rebounded. The Aussie trades 0.1 percent up at 0.7276, having hit a low of 0.7256 on Monday; it’s lowest since Jan. 2017. FxWirePro's Hourly Aussie Strength Index stood at -111.32 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7250, a break below targets 0.7215. On the upside, resistance is located at 0.7303 (23.6% retracement of 0.7453 and 0.7256), a break above could take it near 0.7331 (38.2% retracement).
NZD/USD: The New Zealand dollar rebounded from 2-1/2 month lows, however, it continues to be weighed down by last week's dovish RBNZ stance, after it left the doors open for a rate cut and signalled that the OCR could stay at the current level through 2019 and into 2020. The Kiwi trades 0.3 percent up at 0.6596, having touched a low of 0.6561 on Monday, its lowest level since March 2016. FxWirePro's Hourly Kiwi Strength Index was at -68.75 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6609 (23.6% retracement of 0.6763 and 0.6561), a break above could take it near 0.6650 (5-DMA). On the downside, support is seen at 0.6545, a break below could drag it below 0.6500.
Equities Recap
Asian shares slumped as investor sentiment weakened on softer-than-expected Chinese economic data that underlined the need for more policy stimulus in China.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.2 percent.
Tokyo's Nikkei rose 2.3 percent to 22,356.08 points, Australia's S&P/ASX 200 index surged 0.8 percent to 6,299.60 points, and South Korea's KOSPI rallied 0.6 percent to 2,261.32 points.
Shanghai composite index fell 0.3 percent to 2,777.03 points, while CSI300 index traded 0.6 percent down at 3,369.21 points.
Hong Kong’s Hang Seng traded 0.9 percent lower at 27,674.46 points. Taiwan shares added 0.7 percent to 10,824.23 points.
Commodities Recap
Crude oil prices steadied after falling to multi-month lows in the previous session as a report from OPEC confirmed that top exporter Saudi Arabia had cut production to avert looming oversupply. International benchmark Brent crude was trading 0.1 percent up at $72.81 per barrel by 0501 GMT, having hit a low of $71.02 on Monday, its lowest since April 18. U.S. West Texas Intermediate was trading 0.1 percent higher at $67.46 a barrel, after falling as low as $65.74 on Monday, its lowest since June 21.
Gold prices edged up after falling to an 18-month low in the prior session, as the U.S. dollar pared gains after posting a 13-month high on Monday. Spot gold nudged up 0.05 percent at $1,193.81 an ounce by 0508 GMT, having hit a low of $1190.82 on Monday, its lowest since January 27, 2017. U.S. gold futures were up 0.1 percent at $1,200.5 an ounce.
Treasuries Recap
The Japanese government bonds fell as risk sentiments improved and investors shifted away from safe-haven buying after the Turkish political disturbance calmed to some extent, following the intervention of the country’s central bank to provide more liquidity and bring a halt to the unstoppable decline in the lira. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped nearly 1 basis point to 0.105 percent, the yield on the long-term 30-year note jumped 1-1/2 basis points to 0.846 percent and the yield on short-term 2-year traded tad higher at -0.111 percent.
The Australian government bonds traded mixed in subdued session as investors remain sidelined in any major deal ahead of June quarter wage price index data. However, Turkey was the main focus for markets with emerging markets feeling contagion pain. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 1 basis point to 2.586 percent, the yield on the long-term 30-year Note also climbed 1 basis point to 3.075 percent and the yield on short-term 2-year slumped 1/2 basis point to 2.003 percent.
The New Zealand bonds closed higher as geopolitical tensions lingered, although Asian markets are expected not to be affected heavily by the ongoing political crisis in Turkey. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, remained tad lower at 2.60 percent, the yield on the long-term 20-year note fell 1-1/2 basis points to 2.91 percent and the yield on short-term 1-year closed 1/2 basis point lower at 1.76 percent.
The Canadian government bond prices were mixed across the yield curve, with the 10-year rising 2 Canadian cents to yield 2.300 percent.
