Market Roundup
- Chinese newspaper mocks Trump's claim of winning trade war as 'wishful thinking'
- Japan wage growth hits 21-year high, signals pickup in household spending
- Australia central bank holds rates at 1.5 pct
- Manafort's right-hand man testifies against him in tax fraud case
- Canada defiant after Saudi Arabia freezes new trade over human rights call
- Japan Jun All Household Spending MM, 2.9%, 1.7% f'cast, -0.2% previous
- Japan Jun Overtime Pay, 3.5%, 1.6% previous
Economic Data Ahead
- (0245 ET/0645 GMT) France Jun Current Account, -2.9 bln prev
- (0245 ET/0645 GMT) France Jun Trade Balance, EUR, SA, -5.50 bln f'cast, -6.01 bln prev
- (0245 ET/0645 GMT) France Jun Imports, EUR Approx Time, 46.520 bln prev
- (0245 ET/0645 GMT) France Jun Exports, EUR Approx Time, 40.510 bln prev
- (0330 ET/0730 GMT) Great Britain Jul Hailfax House Prices MM, 0.2% f'cast, 0.3% prev
- (0330 ET/0730 GMT) Great Britain Jul Hailfax House Prices 3M/YY, 2.7% f'cast, 1.8% prev
Key Events Ahead
- No significant event scheduled.
FX Beat
DXY: The dollar index declined after rising to an over 2-week peak in the prior session as the U.S. Treasury yields moved beyond the previous day’s decline. The greenback against a basket of currencies trades 0.1 percent down at 95.24, having touched a high of 95.52 on Monday, its highest since July 19. FxWirePro's Hourly Dollar Strength Index stood at 5.70 (Neutral) by 0500 GMT.
EUR/USD: The euro rebounded, after falling to an over 5-week low in the previous session on data that showed German industrial orders fell more than expected in June, recording their steepest monthly decline in well over a year. The European currency traded 0.05 percent up at 1.1557, having touched a low of 1.1530 the day before, its lowest since June 28. FxWirePro's Hourly Euro Strength Index stood at -46.88 (Neutral) by 0500 GMT. Investors’ attention will remain on series of data from the Eurozone economies, ahead of the U.S. JOLTS Job Opening. Immediate resistance is located at 1.1600, a break above targets 1.1633 (June 21 High). On the downside, support is seen at 1.1540 (August 6 Low), a break below could drag it till 1.1508 (June 21 Low).
USD/JPY: The dollar eased against the Japanese yen ahead of expected bilateral trade talks between the U.S. and Japan in Washington. Moreover, China's threat to impose tariffs on $60 billion of U.S. goods if the White House implemented the newly proposed levies on Chinese products supported risk-off sentiment. The major was trading 0.1 percent down at 111.33, having hit a high of 112.15 on Wednesday, its highest since July 20. FxWirePro's Hourly Yen Strength Index stood at 32.92 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. JOLTS Job Opening. Immediate resistance is located at 111.67 (21-DMA), a break above targets 112.17 (July 11 High). On the downside, support is seen at 110.96 (July 24 Low), a break below could take it lower 110.59 (July 26 Low).
GBP/USD: Sterling consolidated near 11-month lows as comments from officials about a no-deal Brexit spiked worries that Britain would separate from the EU next year without securing a trade agreement. The major traded 0.05 percent down at 1.2939, having hit a low of 1.2920 on Monday; it’s lowest since Sept. 2017. FxWirePro's Hourly Sterling Strength Index stood at -53.47 (Bearish) 0500 GMT. Investors’ attention will remain on the UK Halifax house prices, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3040 (5-DMA), a break above could take it near 1.3083 (July 19 High). On the downside, support is seen at 1.2920 (Aug. 6 Low), a break below targets 1.2900. Against the euro, the pound was trading flat at 89.25 pence, having hit a low of 89.36 on Monday, it’s lowest since July 23.
AUD/USD: The Australian dollar rose, reversing most of its previous session losses, after the Reserve Bank of Australia left its cash rate at 1.5 percent, a widely expected decision and showed every intention of keeping them at the record low. The Aussie trades 0.2 percent up at 0.7404, having hit a low of 0.7348 on Friday; it’s lowest since July 20. FxWirePro's Hourly Aussie Strength Index stood at 67.79 (Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7370 (July 27 Low), a break below targets 0.7343 (July 18 Low). On the upside, resistance is located at 0.7414 (July 27 High), a break above could take it near 0.7444 (July 6 High).
NZD/USD: The New Zealand dollar steadied as the greenback retreated from recent highs amid simmering U.S.-China trade tensions. The Kiwi trades 0.05 percent up at 0.6734, having touched a low of 0.6720 on Friday, its lowest level since July 20. FxWirePro's Hourly Kiwi Strength Index was at -107.92 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6797 (July 5 High), a break above could take it near 0.6834 (July 20 High). On the downside, support is seen at 0.6713 (June 19 Low), a break below could drag it below 0.6687 (July 3 Low).
Equities Recap
Asian shares consolidated within narrow ranges as simmering worries over the U.S.-China trade conflict undermined investors risk-sentiment.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.05 percent.
Tokyo's Nikkei gained 0.6 percent to 22,646.66 points, Australia's S&P/ASX 200 index declined 0.3 percent to 6,253.90 points, and South Korea's KOSPI surged 0.4 percent to 2,296.71 points.
Shanghai composite index rose 2.1 percent to 2,761.72 points, while CSI300 index traded 2.3 percent up at 3,247.42 points.
Hong Kong’s Hang Seng traded 1.3 percent higher at 28,169.41 points. Taiwan shares shed 0.4 percent to 10,983.55 points.
Commodities Recap
Crude oil prices rose, extending previous session gains ahead of the introduction of U.S. sanctions against major crude exporter Iran. International benchmark Brent crude was trading 0.4 percent up at $73.91 per barrel by 0459GMT, having hit a low of $71.81 on Thursday, its lowest since July 19. U.S. West Texas Intermediate was trading 0.2 percent higher at $69.04 a barrel, after falling as low as $66.95 on Thursday, its lowest since June 22.
Gold prices steadied after a recent price slump, as a strong dollar and expectations of further interest rate hikes in the United States hurt the safe-haven metal's demand. Spot gold was 0.3 percent up at $1,210.35 an ounce at 0504 GMT, having hit its lowest since July 2017 at $1,204.06 on Friday. U.S. gold futures were flat at $1,217.6 an ounce.
Treasuries Recap
The Japanese government bonds slumped across the curve after household spending and wages data came better than expected for the month of June. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose 1 basis point lower at 0.114 percent, the yield on the long-term 30-year note also jumped 1 basis point to 0.856 percent and the yield on short-term 2-year moved 1 basis point up to -0.103 percent.
The Australian government bonds gained across the board after the Reserve Bank of Australia (RBA) remained on hold in its August monetary policy meeting, held early today, while remaining slightly dovish on the country’s inflation outlook. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, plunged 5-1/2 basis points to 2.67 percent, the yield on the long-term 30-year Note also slumped 5-1/2 basis points to 3.15 percent and the yield on short-term 2-year traded nearly 2-1/2 basis points lower 2.035 percent.
The New Zealand bonds closed on the upside as global trade war tensions re-started with China re-imposing trade tariffs on the United States and the latter repeating sanctions on Iran ahead of the Reserve Bank of New Zealand’s (RBNZ) monetary policy meeting, which will most likely be non-eventful, scheduled to be held on August 8. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, plunged 3 basis points to 2.77 percent, the yield on the long-term 20-year note slumped 2-1/2 basis points to 3.08 percent and the yield on short-term 2-year closed 1-1/2 basis points lower at 1.80 percent.
