Market Roundup
- Chinese state media slams Trump for 'extortion' in trade dispute
- Huawei in British spotlight over use of U.S. firm's software
- White House to detail implementation of new Iran sanctions Monday -Pompeo
- Trump says his son sought information on Clinton from Russians in 2016
- Iran eases currency rules, hoping to buoy rial ahead of sanctions
- Saudi Arabia freezes new trade with Canada for urging activists' release
Economic Data Ahead
- No major economic data releases
Key Events Ahead
- No significant events scheduled.
FX Beat
DXY: The dollar index surged as mixed U.S. job data supported expectations of gradual rate hikes by Federal Reserve. The greenback against a basket of currencies trades 0.2 percent up at 95.32, having touched a high of 95.37 on Friday, its highest since July 19. FxWirePro's Hourly Dollar Strength Index stood at 111.1 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro slumped to a 5-week low as the greenback gained after the U.S. job data reinforced investors' expectations the Federal Reserve will gradually raise interest rates this year. The European currency traded 0.1 percent down at 1.1552, having touched a low of 1.1551, its lowest since June 28. FxWirePro's Hourly Euro Strength Index stood at -138.41 (Highly Bearish) by 0500 GMT. Investors’ attention will remain on the Eurozone Ssentix Investor Confidence, ahead of the U.S. Q4 Loan Officer Survey. 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 (June 27 Low), a break below could drag it till 1.1508 (June 21 Low).
USD/JPY: The dollar steadied after falling for three straight sessions, as a decline in the U.S. unemployment rate suggested that the labour market conditions were tightening, further boosting expectations the Federal Reserve will gradually hike interest rates this year. The major was trading 0.1 percent up at 111.31, having hit a high of 112.15 on Wednesday, its highest since July 20. FxWirePro's Hourly Yen Strength Index stood at 137.31 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. Q4 Loan Officer Survey. Immediate resistance is located at 111.63 (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 tumbled for a third consecutive session, amid growing concerns over the potential for a no-deal or hard Brexit, as the UK's Brexit leaders continued to disagree with the European Union's unwillingness to close on negotiating terms or show preference the UK. The major traded 0.1 percent down at 1.2987, having hit a low of 1.2975 on Friday; it’s lowest since July 19. FxWirePro's Hourly Sterling Strength Index stood at -73.15 (Bearish) 0500 GMT. Investors’ attention will remain on the UK BRC Like-For-Like Retail Sales for July y/y, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3083 (July 19 High), a break above could take it near 1.3103 (10-DMA). On the downside, support is seen at 1.2957 (July 19 Low), a break below targets 1.2925. Against the euro, the pound was trading flat at 88.94 pence, having hit a high of 88.55 on Thursday, it’s highest since July 17.
AUD/USD; The Australian dollar eased ahead of the Reserve Bank of Australia policy meetings this week, where it is considered certain to keep interest rates at record lows. The Aussie trades 0.2 percent down at 0.7387, having hit a low of 0.7348 the session before; it’s lowest since July 20. FxWirePro's Hourly Aussie Strength Index stood at -31.75 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7343 (July 18 Low), a break below targets 0.7300. 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 declined, hovering towards a 2-week low hit in the previous session, as the Reserve Bank of New Zealand is set to leave the benchmark Overnight Cash Rate (OCR) unchanged at its monetary policy meeting, scheduled this week. The Kiwi trades 0.1 percent down at 0.6735, having touched a low of 0.6720 on Friday, its lowest level since July 20. FxWirePro's Hourly Kiwi Strength Index was at -115.63 (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 traded in a volatile session as China's retaliation with $60 billion tariffs on U.S. imported goods triggered fears of a full-fledged trade war between the U.S. and China.
MSCI's broadest index of Asia-Pacific shares outside Japan rallied 0.9 percent.
Tokyo's Nikkei eased 0.1 percent to 22,507.32 points, Australia's S&P/ASX 200 index rose 0.6 percent to 6,273.00 points, and South Korea's KOSPI declined 0.05 percent to 2,287.13 points.
Shanghai composite index fell 1.4 percent to 2,703.48 points, while CSI300 index traded 1.3 percent down at 3,272.27 points.
Hong Kong’s Hang Seng traded 0.4 percent higher at 27,789.74 points. Taiwan shares added 0.1 percent to 11,024.10 points.
Commodities Recap
Crude oil prices rose, reversing most of its previous session losses after Saudi crude production registered an unexpected drop dip in July and as American shale drilling appeared to subdue. International benchmark Brent crude was trading 0.2 percent up at $73.38 per barrel by 0502 GMT, having hit a low of $71.81 on Thursday, its lowest since July 19. U.S. West Texas Intermediate was trading 0.3 percent higher at $68.72 a barrel, after falling as low as $66.95 on Thursday, its lowest since June 22.
Gold prices surged, extending previous session's rebound from a 17-month low as the U.S. – China trade war fueled risk-off sentiment. Spot gold was 0.1 percent up at $1,214.87 an ounce at 0511 GMT, after hitting its lowest since July 2017 at $1,204.06 on Friday. U.S. gold futures were little changed at $1,223.4 an ounce.
Treasuries Recap
The Japanese government bonds remained nearly flat as investors wait to watch the country’s household spending for the month of June and the second-quarter gross domestic product (GDP), scheduled to be released today and on August 9 by 23:30GMT and 23:50GMT respectively. The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, hovered around 0.10 percent, the yield on the long-term 30-year flat at 0.84 percent while the yield on short-term 2-year traded tad lower at -0.11 percent.
The Australian government bonds gained across the board on the first trading day after China retaliated with $60 billion tariffs on U.S. imported goods, injecting more fear about a full-fledged trade war between the world’s two major economies. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell nearly 4 basis points to 2.693 percent, the yield on the long-term 30-year Note also dipped 3-1/2 basis points to 3.175 percent and the yield on short-term 2-year slumped nearly 2 basis points to 2.041 percent.
The New Zealand bonds closed flat as investors wait to watch the country’s GlobalDairyTrade (GDT) price auction and the Reserve Bank of New Zealand’s (RBNZ) monetary policy meeting, which will most likely be non-eventful, scheduled to be held on August 7 and August 8 respectively. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slipped 1/2 basis point to 2.79 percent, the yield on the long-term 20-year note hovered around 3.11 percent while the yield on short-term 2-year also closed nearly flat at 1.81 percent.
