Market Roundup
- Tokyo core consumer prices rise 0.8 pct in July; BOJ target elusive.
- U.S. touts EU trade truce, attention now turns to China.
- Cohen says Trump knew about Trump Tower meeting with Russians –CNN.
- Consumers, soybeans seen powering U.S. second-quarter growth.
- IMF says China growth robust, urges Beijing to stick to reform plan.
- AU Q2 PPI YY, 1.7% previous.
- Foreign CB US debt holdings +$4.125 bln to $3.411 tln July 25 week.
- Treasuries -$1.248 bln to $3.041 tln, agencies +$5.601 bln to +$297.7 bln.
Economic Data Ahead
- (0300 ET/0700 GMT) Spain Retail sales.
- (0300 ET/0700 GMT) Hungary unemployment rate.
- (0330 ET/0730 GMT) Sweden retail sales, trade balance.
- (0400 ET/0800 GMT) Italy June Producer Prices YY, 2.4%.
- (0630 ET/1030 GMT) Russia Central Bank key rate.
- (0730 ET/1130 GMT) India Forex reserves.
Key Events Ahead
- No major economic events scheduled.
FX Recap
USD: The dollar index, which measures the greenback's strength against a basket of six major currencies, stood little changed at 94.719. It had risen 0.4 percent overnight to pull away from a two-week trough of 94.084 as the euro slid sharply after the European Central Bank kept to its planned timetable to move away from its accommodative monetary policy.
EUR/USD: The euro was virtually flat at $1.1643. The euro earlier on Thursday had advanced in relief after the United States and the European Union agreed to begin talks to lower tariffs, soothing trade concerns. A consistent close below $1.1638 will drag the parity down towards key supports around $1.1390 and $1.1185 levels respectively. Alternatively, reversal from key support will drag the parity higher towards key resistances around $1.1738, $1.1852, $1.1938 and $1.1996 marks respectively.
USD/JPY: The Japanese yen trades marginally higher in early Asia on robust CPI as well as core CPI data. It made intraday high at 111.24 and low at 110.90 levels. A sustained close above 111.22 is required to take the parity higher towards key resistance around 112.62 and 114.72 marks respectively. Alternatively, a daily close below 111.22 will drag the parity down towards key supports around 110.60, 110.27, 109.24, 108.72 and 107.90 marks respectively.
GBP/USD: The pound was flat at $1.3104. It had dropped 0.6 percent overnight as a stronger dollar and mounting uncertainty over Brexit negotiations offset the positive impact of bets on a Bank of England interest rate hike next week. A sustained close below $1.3105 requires for dragging the parity down towards key support around $1.2957 mark. On the other side, key resistances are seen at $1.3215, $1.3362 and $1.3490 levels respectively.
AUD/USD: The Australian dollar was 0.15 percent higher at $0.7388, recovering a bit of ground after the previous day's tumble. The Aussie, often seen as a liquid proxy of China-related trades, had fallen 1 percent on Thursday amid a drop in Chinese equities. The pair made intraday high at $0.7393 and low at $0.7373 levels. A sustained close above $0.7465 requires for the upside rally. Alternatively, current downside movement will take the parity down towards $0.7310 marks.
NZD/USD:
The New Zealand dollar was back at $0.6780 after encountering resistance around $0.6850/60, a level that has held solid for a whole month now. Support is seen around $0.6720 and $0.6688. The currency was now poised for a weekly drop of 0.4 percent. Pair made intraday high at $0.6787 and low at $0.6774 levels. A sustained close above $0.6835 is required to take the parity higher towards $0.7050 mark. Alternatively current downside movement will take the parity down towards key supports around $0.6687 levels.
Equities Recap
Japan’s Nikkei was trading 0.31 pct higher at 22,656.50 points.
Australia’s S&P/ASX 200 was trading 0.80 pct higher at 6,294.85 points.
Shanghai composite index to open down 0.1 pct at 2,879.69 points and China's CSI300 index to open down 0.1 pct at 3,533.77 points.
Taiwanese stock was trading around 0.41 percent higher at 11,055.93 points.
Hong Kong’s Hang seng was trading 0.20 pct lower at 28,720.55 points.
India’s NSE Nifty was trading around 0.71 percent higher at 11,250.22 points while BSE Sensex was trading 0.90 points higher at 37,313.82 points.
South Korea’s Kospi was trading 0.04 percent higher at 2,290.94 points.
Commodities Recap
Oil prices slipped on Friday in quiet trading after three days of gains, but took support from Saudi Arabia halting crude transport through a key shipping lane, falling U.S. inventories and easing trade tensions between Washington and Europe. Brent futures were down 22 cents, or 0.3 percent, at $74.32 a barrel by 0236 GMT, after gaining 0.8 percent on Thursday. U.S. West Texas Intermediate futures were 7 cents lower, at $69.54, after posting a nearly 0.5-percent gain the previous session.
Gold prices edged higher on Friday as the dollar slipped against major peers ahead of U.S. economic growth data that could shed light on the pace of rate hikes in the world's top economy. Spot gold was up 0.2 percent at $1,224.40 an ounce as of 0430 GMT. The precious metal was, however, on track for its third straight weekly decline. U.S. gold futures were 0.2 percent lower at $1,223.80 an ounce.
Treasuries Recap
New Zealand government bonds gained, sending yields 3 basis points lower at the long end of the curve.
Australian government bond futures were mixed, with the three-year bond contract flat at 97.885, while the 10-year contract firmed 1.5 ticks to 97.3250.
The 10-year U.S. Treasury note yield extended its overnight rise and touched a six-week high of 2.988 percent as traders braced for a potentially strong reading of U.S. gross domestic product (GDP) data, set for release later on Friday.
