Market Roundup
- Britain's May could face trouble over Brexit deal, Conservative lawmaker warns
- Business leaders' confidence in UK economy at lowest so far this year -survey
- Trump says 'nothing to hide' from Special Counsel Mueller
- ECB on course to normalize monetary policy -Bundesbank chief tells paper
- Japan firms welcome skilled foreign workers, frown at unskilled labourers-Reuters poll
- China regulator asks financial institutions to support infrastructure investment
- China, Malaysia to push forward bilateral ties
- Iran says no OPEC member can take over its share of oil exports
- U.S. net long dollars hit highest since Jan 2017-CFTC
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Jun Construction Output MM, 0.28% prev
Key Events Ahead
- (1100 ET/1500 GMT) Fed's Bostic speaks before a fireside chat of the Johnson City, Kingsport, and Bristol Chamber of Commerce
- (1200 ET/1600 GMT) Bundesbank president Weidmann speaks in Frankfurt
FX Beat
DXY: The dollar index rebounded from a 1-week low touched in the previous session as investors awaited developments on proposed U.S.-China trade talks. The greenback against a basket of currencies trades 0.1 percent up at 96.25, having touched a high of 96.98 on Wednesday, its highest since July 2017. FxWirePro's Hourly Dollar Strength Index stood at -33.52 (Neutral) by 0500 GMT.
EUR/USD: The euro eased, halting a 3-day winning streak amid persisting concerns that the Turkish crisis could hurt European banks. The European currency traded 0.1 percent down at 1.1424, having touched a low of 1.1301 on Wednesday, its lowest since July 2017. FxWirePro's Hourly Euro Strength Index stood at 59.02 (Bullish) by 0500 GMT. Investors’ attention will remain on EZ construction output, ahead of FOMC member Bostic's speech. Immediate resistance is located at 1.1465 (50.0% retracement of 1.1628 and 1.1301), a break above targets 1.1503 (50% retracement). On the downside, support is seen at 1.1366 (5-DMA), a break below could drag it till 1.1301 (August 15 Low).
USD/JPY: The dollar surged against the Japanese yen amid optimism over a reduction in U.S.-China trade tensions and receding fears over the Turkish lira's plunge. The major was trading 0.1 percent up at 110.62, having hit a high of 111.43 on Wednesday, its highest since August 8. FxWirePro's Hourly Yen Strength Index stood at -33.52 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of FOMC member Bostic's speech. Immediate resistance is located at 111.13 (50.0% retracement of 112.15 and 110.11), a break above targets 111.87 (August 3 Low). On the downside, support is seen at 110.11 (August 13 Low), a break below could take it lower 109.68 (June 27 Low).
GBP/USD: Sterling consolidated within narrow ranges after last week's data indicated that the UK economy was gaining momentum, however, worries about whether Britain can agree on a trade deal with the European Union over coming months to avoid a disorderly exit from the bloc continued to dent investor sentiment. The major traded flat at 1.2743, having hit a low of 1.2661 on Wednesday; it’s lowest since June. 2017. FxWirePro's Hourly Sterling Strength Index stood at -24.07 (Neutral) 0500 GMT. Immediate resistance is located at 1.2782 (23.6% retracement of 1.3173 and 1.2661), a break above could take it near 1.2857 (38.2% retracement). On the downside, support is seen at 1.2660, a break below targets 1.2610. Against the euro, the pound was trading flat at 89.65 pence, having hit a low of 89.77 on Friday, it’s lowest since August 6.
AUD/USD: The Australian dollar declined after an opinion poll showed that voter support for Australian Prime Minister Malcolm Turnbull fell to its lowest level since December, stoking speculation that he could face a leadership challenge in his ruling centre-right coalition. The Aussie trades 0.2 percent down at 0.7301, having hit a low of 0.7202 on Wednesday; it’s lowest since Jan. 2017. FxWirePro's Hourly Aussie Strength Index stood at 101.97 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7264 (5-DMA), a break below targets 0.7214 (August 16 Low). On the upside, resistance is located at 0.7357 (61.8% retracement of 0.7453 and 0.7202), a break above could take it near 0.7405 (August 6 HIgh).
NZD/USD: The New Zealand dollar retreated from an over 1-week peak despite easing U.S.- China trade tensions after both the economies agreed to hold lower-level trade talks late this month. The Kiwi trades 0.2 percent down at 0.6617, having touched a high of 0.6640 earlier, its highest level since February 2016. FxWirePro's Hourly Kiwi Strength Index was at 141.83 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6680 (61.8% retracement of 0.6763 and 0.6544), a break above could take it near 0.6716 (78.6% retracement). On the downside, support is seen at 0.6588 (5-DMA), a break below could drag it below 0.6544 (August 15 Low)
Equities Recap
Asian shares gained as investors cautiously awaited lower-level trade talks between Chinese and U.S. officials in Washington later in the week.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.4 percent.
Tokyo's Nikkei declined 0.3 percent to 22,199.00 points, Australia's S&P/ASX 200 index surged 0.1 percent to 6,345.00 points, and South Korea's KOSPI plunged 0.05 percent to 2,246.10 points.
Shanghai composite index rose 0.4 percent to 2,679.19 points, while CSI300 index traded 0.5 percent down at 3,244.64 points.
Hong Kong’s Hang Seng traded 0.9 percent higher at 27,481.44 points. Taiwan shares added 0.1 percent to 10,699.05 points.
Commodities Recap
Crude oil prices declined as concerns over slowing economic growth weighed on market sentiment. International benchmark Brent crude was trading 0.3 percent down at $71.57 per barrel by 0507 GMT, having hit a low of $70.28 on Wednesday, its lowest since April 10. U.S. West Texas Intermediate was trading 0.4 percent lower at $65.66 a barrel, after falling as low as $64.45 on Thursday, its lowest since June 21.
Gold prices rose, extending previous session's rebound from 19-month lows hit last week, underpinned by mild weakness in the U.S. dollar on hopes trade tensions between the United States and China could be easing. Spot gold was trading 0.1 percent up at $1,185.60 an ounce at 0521 GMT, having hit a low of $1160.07 on Thursday, its lowest since early January 2017. U.S. gold futures were up 0.6 percent at $1,191.60 an ounce.
Treasuries Recap
The Japanese government bonds traded slightly higher on the first trading day of the week as geopolitical tensions continued to bother investors’ sentiments, leading to a rise in demand for safe-haven bonds, thus weighing on bond yields. The yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around 0.095 percent, the yield on the long-term 30-year note remained tad lower at 0.85 percent and the yield on short-term 2-year slipped nearly 1/2 basis point to -0.129 percent.
The Australian government bonds rallied across the curve during early Asian session as investors risk appetite remained sour ahead of U.S.-China trade talks this week. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 2 basis points to 2.531 percent (lowest since December 2017), the yield on the long-term 30-year bond also dipped 2 basis points to 3.026 percent and the yield on short-term 2-year remained 1 basis point lower at 1.989 percent.
