Market Roundup
- Trump blasts UK PM May's Brexit plan, says it puts trade deal in doubt
- Trump claims NATO victory after ultimatum to go it alone
- Fed's Powell: Trump stimulus to boost economy for 'at least' 3 years
- U.S. would re-open trade talks if China makes major changes -Mnuchin
- China Jun Exports y/y, 11.3%, 10.0% f'cast, 12.6% last
- China Jun Imports y/y, 14.1%, 20.8% f'cast, 26.0% last
- China Jun Trade Balance (USD), 41.61 bln, 27.61 bln f'cast, 24.92 bln last
- Investors pull $1.85 bln from U.S.-based equity funds -Lipper
- Foreign CB US debt holdings +$9,659 bln to $3.405 tln July 11 week
- Treasuries +$9,083 bln to $3.041 tln, agencies unchanged at +$291.2 bln
Economic Data Ahead
- (0300 ET/0700 GMT) Spain CPI m/m, 0.3% f'cast, 0.9% last
- (0300 ET/0700 GMT) Spain CPI y/y, 2.3% f'cast, 2.1% last
- (0300 ET/0700 GMT) Spain HICP m/m, 0.2% f'cast, 0.9% last
- (0300 ET/0700 GMT) Spain HICP y/y, 2.3% f'cast, 2.3% last
Key Events Ahead
- N/A European Central Bank Vice President Luis de Guindos participates in ECOFIN meeting in Brussels, Belgium
- (0730 ET/1130 GMT) BoE Deputy Gov Jon Cunliffe gives speech at the Cumbria Chamber of Commerce, Kendall
- (1230 ET/1630 GMT) Atlanta Fed President Raphael Bostic participates in Town Hall chat before the Northern Chapter Virginia Society of Certified Public Accountants
FX Beat
DXY: The dollar index rallied to a 10-day peak, boosted by U.S. Treasury yields that edged higher on expectations the U.S. inflation rate will rise. The greenback against a basket of currencies trades 0.1 percent up at 94.93, having touched a high of 94.95, its highest since July 3. FxWirePro's Hourly Dollar Strength Index stood at 136.39 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro declined, extending losses for the third straight session after minutes of the European Central Bank showed the central bank will keep rates at a record low for as long as needed to raise inflation. The European currency traded 0.1 percent down at 1.1655, having touched a high of 1.1790 on Monday, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at 4.12 (Neutral) by 0500 GMT. Investors’ attention will remain on series of data from the Eurozone economies, ahead of U.S. import and export price indexes and Fed Monetary Policy report. Immediate resistance is located at 1.1716 (5-DMA), a break above targets 1.1801 (June 13 High),. On the downside, support is seen at 1.1630 (July 4 Low), a break below could drag it till 1.16300.
USD/JPY: The dollar rallied to a fresh 6-month peak above the 112.00 handle after U.S. consumer prices data showed a steady buildup of inflation pressure that could convince the Federal Reserve to hike interest rates as many as four times in 2018. The major was trading 0.1 percent up at 112.62, having hit a high of 112.77 earlier, its highest since Jan 10. FxWirePro's Hourly Yen Strength Index stood at -81.29 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. import and export price indexes and Fed Monetary Policy report. Immediate resistance is located at 113.07 (Dec 19 High), a break above targets 113.38 (Dec 8 High). On the downside, support is seen at 111.91 (July 12 Low), a break below could take it lower 111.36 (5-DMA).
GBP/USD: Sterling slumped to a 10-day low as markets remained concerned that the European Union will demand more concessions from Britain before agreeing on a deal. On Thursday, Prime Minister Theresa May's government outlined its plans to retain the closest possible ties with the bloc, reinforcing hopes that the UK is headed for a soft Brexit. The major traded 0.2 percent down at 1.3173, having hit a high of 1.3362 on Monday; it’s highest since June 14. FxWirePro's Hourly Sterling Strength Index stood at -77.88 (Bearish) 0500 GMT. Investors’ attention will remain on BoE MPC member Cunliff's speech, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3362 (June 1 High), a break above could take it near 1.3389 (June 13 High). On the downside, support is seen at 1.3146 (June 20), a break below targets 1.3114 (July 3). Against the euro, the pound was trading 0.1 percent down at 88.48 pence, having hit a low of 89.00 pence on Monday, it’s lowest since March 9.
AUD/USD: The Australian dollar rose, extending previous session gains after mixed Chinese trade figures suggested the threat of tariffs had no major impact as yet with exports beating forecasts in June. The Aussie trades 0.1 percent up at 0.7414, having hit a high of 0.7483 on Tuesday; it’s highest since June 14. FxWirePro's Hourly Aussie Strength Index stood at 55.28 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7345, a break below targets 0.7300. On the upside, resistance is located at 0.7444 (July 6 High), a break above could take it near 0.7490.
NZD/USD: The New Zealand dollar edged down after a domestic survey of manufacturing showed activity slipping to a 6-month low in June. The Kiwi trades 0.1 percent down at 0.6769, having touched a high of 0.6858 on Monday, its highest level since June 27. FxWirePro's Hourly Kiwi Strength Index was at -44.85 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6809 (5-DMA), a break above could take it near 0.6835 (21-DMA). 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 surged, boosted by gains on Wall Street fueled by expectations of strong U.S. earnings, while the greenback rallied to a 10-day peak as upbeat comments from Fed Chair Powell underpinned investor sentiment.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent.
Tokyo's Nikkei rallied 1.9 percent to 22,623.71 points, Australia's S&P/ASX 200 index surged 0.01 percent to 6,268.40 points, and South Korea's KOSPI advanced 1.2 percent to 2,310.62 points.
Shanghai composite index fell 0.3 percent to 2,828.00 points, while CSI300 index was trading 0.3 percent up at 3,489.80 points.
Hong Kong’s Hang Seng was trading 0.4 percent higher at 28,583.68 points. Taiwan shares added 1.2 percent to 10,864.54 points.
Commodities Recap
Crude oil prices declined and were set for a second weekly fall, as the market shrugged off a warning that spare capacity may be extended as OPEC and Russia increase production. International benchmark Brent crude was trading 0.2 percent up at $74.27 per barrel by 0448 GMT, having hit a low of $73.08 on Wednesday, its lowest since June 21. U.S. West Texas Intermediate was trading 0.1 percent higher at $70.35 a barrel, after rising as low as $70.41 on Wednesday, its lowest since June 26.
Gold prices eased as the dollar extended gains from the previous session when strong U.S. inflation data boosted demand for the greenback. Spot gold was 0.2 percent down at $1,245.16 an ounce by 0452 GMT, having touched a low of $1241.22 on Wednesday, its lowest since July 3 and was down about 0.7 percent for the week. U.S. gold futures for August delivery were little changed at $1,246.10 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.852 percent higher by 0.001 bps, while 5-year yield was 0.001 bps up at 2.755 percent.
The Australian government bond futures were little changed, with the three-year bond contract off 1 tick at 97.925 and the 10-year contract steady at 97.3650.
The New Zealand government bonds gained, sending yields 0.7 basis points lower towards the long end of the curve.
The Canadian government bond prices were mixed across the yield curve, with the two-year rising 1 Canadian cents to yield 1.946 percent and the 10-year declining 8 Canadian cents to yield 2.160 percent.
