Market Roundup
- Japan end-July foreign reserves USD1.260 trln, up from June on JPY cross buys
- S. Korea, U.S. agree on pressure for No. Korea, China media warns on sanctions
- UK ready to pay up to 40 billion euros to leave EU -Sunday Telegraph
- UK consumer spending sees the longest decline since 2013 -Visa
- Ex-BoE Gov King - UK needs Brexit fall - back position
- In Asia financial markets, fear indicators still send a buy signal
- Swiss business group calls for end to negative interest rates -SZ
- Australia Jul Job ads +1.5% vs 3%
- New Zealand inflation expectations fall in Q3 -RBNZ
- Lofty NZ dollar, softer data in focus as central bank meets
Economic Data Ahead
- (0315 ET/0715 GMT) Switzerland Jul CPI, -0.30% m/m, 0.30% y/y eyed; last -0.10%, 0.20%
- (0430 ET/0800 GMT) Eurozone Aug Sentix Index, 27.80 eyed, last 28.30
Key Events Ahead
- (0540 ET/0940 GMT) Netherlands 6-month, E1.0-E2.0 bln auction
- (0955 ET/1355 GMT) France E2.8-3.2/1.0-1.4/0.7-1.1 bln for 3/6/12 months auctions
FX Beat
DXY: The dollar slightly recovered versus its major peers after an upbeat U.S. jobs report released on Friday kept the prospects of a December interest rate hike by the Federal Reserve alive. The greenback against a basket of currencies traded 0.1 percent down at 93.36, having touched a high of 93.77 last week, it’s highest since July 28. FxWirePro's Hourly Dollar Strength Index stood at 120.70 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro edged up after declining to a four-day low in the prior session as better-than expected July U.S. non-farm payrolls and wage growth figures boosted the greenback from multi-month lows. The European currency traded 0.2 percent up at 1.1797, having touched a high of 1.1909 on Wednesday, its highest since Jan 5, 2015. FxWirePro's Hourly Euro Strength Index stood at -35.47 (Neutral) by 0400 GMT. Investors’ attention will remain on Eurozone's Sentix investor confidence, ahead of the U.S. labour market conditions index data. Immediate resistance is located at 1.1900, a break above targets 1.1930. On the downside, support is seen at 1.1720 (61.8% retracement 1.1370 and 1.1909), a break below could drag it near 1.1638 (50.0% retracement 1.1370 and 1.1909).
USD/JPY: The dollar steadied after declining to a seven-week low last week, as closely watched data released on Friday showed nonfarm payrolls increased by a bigger-than-estimates 209,000 jobs in July, while average hourly earnings increased 0.3 percent to match forecasts. The major was trading flat at 110.70, having hit a low of 109.84 the prior session, its lowest since Jun 15. FxWirePro's Hourly Yen Strength Index stood at 61.29 (Bullish) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of the U.S. labour market conditions index data for further momentum. Immediate resistance is located at 111.02 (50.0% retracement of 112.19 and 109.84), a break above targets 111.30 (61.8% retracement of 112.19 and 109.84). On the downside, support is seen at 110.21 (July 31 Low), a break below could take it near 109.63 (June 12 Low).
GBP/USD: Sterling rose after tumbling in the previous session as a strong U.S. July payrolls report prompted investors to cut some of their heavy bets against the dollar versus a basket of currencies. The major traded 0.2 percent up at 1.3056, having hit a high of 1.3267 on Thursday, its highest since Sept. 16. FxWirePro's Hourly Sterling Strength Index stood at -120.81 (Highly Bearish) by 0400 GMT. Investors’ focus will remain on UK Halifax house prices figures, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3117 (10-DMA), a break above could take it near 1.3162 (5-DMA). On the downside, support is seen at 1.3014 (23.6% retracement of 1.2816 and 1.3268), a break below targets 1.2932 (July 20 Low). Against the euro, the pound was trading down at 90.33 pence, having hit a near 9-week low of 90.54 the prior session.
AUD/USD: The Australian dollar rebounded after slumping for four consecutive sessions, as a corrective slide seen in the U.S. dollar against its major peers and positive tone around the Asian equities supported the recovery in the major. The Aussie trades 0.1 percent up at 0.7935, having hit a low of 0.7891 on Friday, it’s weakest since July 26. FxWirePro's Hourly Aussie Strength Index stood at -78.09 (Slightly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7891 (Previous Session Low), a break below targets 0.7850. On the upside, resistance is located at 0.8000, a break above could take it near 0.8042.
NZD/USD: The New Zealand dollar eased as the economy's inflation expectations fell in Q3 and crude oil prices edged lower ahead of a joint OPEC and non-OPEC technical committee meeting in Abu Dhabi on Monday and Tuesday to discuss ways to boost compliance with their supply reduction agreement. The Kiwi trades 0.2 percent down at 0.7397, having touched a low of 0.7391 last week, its lowest level since July 20. FxWirePro's Hourly Kiwi Strength Index was at -31.99 (Neutral) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7450, a break above could take it near 0.7500. On the downside, support is seen at 0.7380 (50.0% retracement of 0.7201 and 0.7558), a break below could drag it till 0.7338 (38.2% retrace).
Equities Recap
Asian shares edged up, following gains on Wall Street, while the dollar retained most gains made on Friday's stronger-than-expected July jobs growth.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.5 percent.
Tokyo's Nikkei rallied 0.6 percent to 20,063.13 points, Australia's S&P/ASX 200 index climbed 0.9 percent to 5,773.60 points and South Korea's KOSPI gained 0.4 percent to 2,404.02 points.
Shanghai composite index rose 0.2 percent to 3,269.16 points, while CSI300 index was trading 0.3 percent up at 3,717.84 points.
Hong Kong’s Hang Seng was trading 0.4 percent higher at 27,687.44 points. Taiwan shares added 0.7 percent to 10,579.38 points.
Commodities Recap
Crude oil prices edged lower, reversing some of its previous session gains, as rising output from OPEC and non-OPEC countries capped crude markets. International benchmark Brent crude was trading 0.2 percent down at $52.22 per barrel by 0429 GMT, having hit a high of $52.90 on Tuesday, its strongest since May 25. U.S. West Texas Intermediate was trading 0.2 percent lower at $49.38 a barrel, after rising as high as $50.40 on Tuesday, its strongest since May 25.
Gold prices edged down, extending losses towards a near two-week low hit in the previous session, weighed down by a rebound in the U.S. dollar after stronger-than-expected U.S. jobs data last week. Spot gold was trading down at $1,258.16 per ounce at 0433 GMT, having touched a low of $1,254.08 on Friday, its lowest since July 26. U.S. gold futures for December delivery fell 0.1 percent to $1,263.00 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.269 percent lower by 0.001 bps, while 5-year yield was 0.001 bps down at 1.822 percent.
The Japanese government bonds traded flat at the start of the trading week as investors wait to watch the country’s 30-year auction, scheduled to be held on August 8 amid a silent week that will witness no data of any economic significance. The yield on the benchmark 10-year Treasury note hovered around 0.07 percent, the yield on long-term 30-year note traded flat at 0.87 percent and the yield on short-term 2-year too traded steady at -0.10 percent.
The Australian extended their sell-off, tracking a similar trend in U.S. Treasuries after the latter’s labour market report showcased some relief to the otherwise uninspiring set of economic data that weighed on the financial markets. The yield on the benchmark 10-year Treasury note jumped nearly 3-1/2 basis points to 2.66 percent, the yield on the 15-year note climbed 3 basis points to 2.96 percent while the yield on short-term 2-year traded 1 basis point higher at 1.79 percent.
