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Market Roundup
• German 12-Month Bubill Auction 2.656%,2.566% previous
• German 6-Month Bubill Auction 2.502%, 2.436% previous
•US NY Empire State Manufacturing Index (Aug) 20.60, 10.60 forecast, 15.60 previous
•Canada Core CPI (MoM) (Jul) 0.2%, 0.1% previous
•Canada Core CPI (YoY) (Jul) 2.3%, 2.1% previous
•Canada Foreign Securities Purchases (Jun) 40.83B, 15.00B forecast, 8.80B previous
•Canada CPI (MoM) (Jul) 0.5%, 0.4% forecast, -0.4% previous
•Canada Common CPI (YoY) (Jul) 2.7%, 2.5% forecast, 2.6% previous
•Canada CPI (YoY) (Jul) 3.0%, 2.8% previous
•Canada Median CPI (YoY) (Jul) 2.0%, 2.0% forecast, 1.9% previous
•Canada Trimmed CPI (YoY) (Jul) 1.9%, 1.8% forecast, 1.9% previous
•Canada Foreign Securities Purchases by Canadians (Jun) 35.430B, 21.890B previous
Looking Ahead Economic Data (GMT)
•14:00 France 12-Month BTF Auction 2.752% previous
•14:00 France 3-Month BTF Auction 2.448% previous
•14:00 France 6-Month BTF Auction 2.579% previous
•16:30 US 3-Month Bill Auction 3.735% previous
•16:30 US 6-Month Bill Auction 3.830% previous
•16:30 US TIC Net Long-Term Transactions (Jun) 232.7B previous
•16:30 US TIC Net Long-Term Transactions including Swaps (Jun) 151.40B forecast, 232.70B previous
Looking Ahead Events And Other Releases (GMT)
•NO Data Ahead
Currency Forecast
EUR/USD : The euro strengthened to hit two-month high against the U.S. dollar on Monday as traders trimmed U.S. rate hike bets against the backdrop of a run of softer economic data. A run of soft U.S. economic data last week prompted markets to pare back bets on an imminent rate hike, sending the U.S. dollar lower for a third straight session, down 0.2%.Investors appear content to look past the simmering Middle East crisis after last week's cooler-than-expected inflation print eased fears of a near-term Fed hike, while robust tech-sector earnings gave sentiment an added lift.However, that fragile optimism may soon be tested. Oil prices traded mixed after last week's advance, with Iran on Saturday calling on Washington to accept defeat, even as U.S. President Donald Trump urged Americans to brace for higher gasoline prices while the conflict grinds on. Immediate resistance can be seen at 1.1633(Higher BB), an upside break can trigger rise towards 1.1655(50%fib).On the downside, immediate support is seen at 1.1525(38.2%fib), a break below could take the pair towards 1.1497(SMA 20).
GBP/USD: The pound rose on Monday as investors awaited a batch of inflation and labour market data that could put the currency's recent gains to the test.The inflation and labour market readings due later this week will be crucial to the Bank of England's interest rate outlook and could determine whether sterling can extend its recovery after a period of political turmoil in the UK.The currency was boosted by data last week that showed the British economy had grown unexpectedly in June thanks to the start of the men's soccer World Cup, hot weather and respite from the energy price surge.However, a survey published on Monday showed that employers remain reluctant to hire and confidence has held near its weakest levels outside the COVID-19 pandemic. .Immediate resistance can be seen at 1.3602(Higher BB), an upside break can trigger rise towards 1.3648(23.6%fib).On the downside, immediate support is seen at 1.3503(38.2%fib), a break below could take the pair towards1.3427(SMA 20).
AUD/USD: The Australian dollar edged higher against the U.S. dollar on Monday as softer U.S. economic data weighed on the greenback . U.S. producer prices were unchanged in July, while annual PPI inflation slowed to 4.7% from 5.5% in June, reinforcing expectations that the Federal Reserve may keep interest rates unchanged in September. Meanwhile, U.S. retail sales unexpectedly fell 0.6% last month after an unrevised 0.2% gain in June, the Commerce Department's Census Bureau said on Friday, adding further pressure on the dollar. Traders are pricing in a nearly 31% chance the Fed will raise rates by 25 basis points next month, sharply lower than the near-even chances of a hike versus a hold a week ago, according to CME's FedWatch tool. Immediate resistance can be seen at 0.7126(Higher BB%fib), an upside break can trigger rise towards 0.7204(May 29th high).On the downside, immediate support is seen at 0.7080 (Daily low), a break below could take the pair towards 07034(50%fib).
USD/JPY: The U.S. dollar dipped on Monday as yen gained momentum against the dollar, largely shrugging off weaker-than-expected Japanese GDP data as traders reined in expectations the Federal Reserve could raise interest rates this year.The yen was 0.2% stronger against the U.S. dollar at 159.075 yen, on track for a second straight day of modest gains but still firmly within its trading range of the past week, after data on Monday showed Japanese GDP for the second quarter expanded at an annualised 1.1%. Soggy U.S. data, including non-farm payrolls and gauges of price inflation for consumers and producers, have doused investor expectations of rate hikes from the Fed this year, with few clues expected from the U.S. central bank until the Jackson Hole symposium from August 27 to 29.Immediate resistance can be seen at 158.92 (50%fib), an upside break can trigger rise towards 160.39(SMA 20).On the downside, immediate support is seen at 158.50(38.2%fib) a break below could take the pair towards 158.00 (Psychological level).
Equities Recap
European shares inched up on Monday, led by basic resources stocks as gold prices advanced, while easing expectations of a Federal Reserve rate hike supported sentiment.
UK's benchmark FTSE 100 was down by 0.13percent, Germany's Dax was down by 0.16percent, France’s CAC was down by 0.52 percent.
Commodities Recap
Gold prices edged higher on Monday, supported by a weaker dollar and fading expectations of a U.S. Federal Reserve rate hike, while investors continued to monitor geopolitical tensions in the Middle East.
Spot gold was up 0.28% to $4,387.95 per ounce by 09:25 a.m. EDT (1325 GMT). U.S. gold futures for December delivery edged 0.2% higher to $4,444.40.
Oil prices rose on Monday on a lack of progress in diplomatic efforts to resolve the Iran war, though the absence of major supply outages limited gains.
Brent crude futures were up 43 cents, or 0.5%, at $88.95 a barrel by 1313 GMT after hitting a session high of $89.68. U.S. West Texas Intermediate crude futures rose 25 cents, or 0.3%, to $82.65 a barrel.
