Market Roundup
- EUR/USD -0.14%, USD/JPY -0.17%, GBP/USD -0.02%, EUR/GBP -0.1%
- DXY -0.12%, DAX 1.35%, FTSE -0.01%, Brent 0.8%, Gold -0.23%
- ECB to stay on hold but highlight growth risks
- DE Aug GfK Consumer Sentiment, 10.6, 10.7 f'cast, 10.7 prev
- FR Jul Consumer Confidence, 97, 98 f'cast, 97 prev
- Trump relents on EU car tariffs, as US-China fight derails Qualcomm deal
- UK housing starts slow, led by slump in London - NHBC
- Brent oil price up as some Saudi Red Sea shipments suspended
- Gold prices edge lower as dollar gains vs yuan
Economic Data Ahead
- (0830 ET/1230 GMT) US Jun Durable Goods, 3.0% f'cast, -0.4% prev
- (0830 ET/1230 GMT) US Jun Durables Ex-Transport, 0.5% f'cast, 0.0% prev
- (0830 ET/1230 GMT) US Jun Durables Ex-Defense (mm), -1.3% prev
- (0830 ET/1230 GMT) US Jun Nondefe Cap Ex-Air, 0.4% f'cast, 0.3% prev
- (0830 ET/1230 GMT) US Jun Adv Goods Trade Balance, -64.77B prev
- (0830 ET/1230 GMT) US Jun Wholesale Inventories Adv, 0.5% f'cast, 0.6% prev
- (0830 ET/1230 GMT) US Jun Retail Inventories Ex-Auto Adv, 0.1% prev
- (0830 ET/1230 GMT) US Initial Jobless Claims, 215k f'cast, 207k prev
- (0830 ET/1230 GMT) US Jobless Claims 4-Wk Avg, 220.50k prev
- (0830 ET/1230 GMT) US Continued Jobless Claims, 1.730M f'cast, 1.751M prev
- (0830 ET/1230 GMT) CA May Average Weekly Earnings (yy), 2.49% prev
- (1000 ET/1500 GMT) US KC Fed Manufacturing, 38 prev
- (1000 ET/1500 GMT) US KC Fed Composite Index, 28 prev
Key Events Ahead
- (0745 ET/1145 GMT) ECB Governing Council meeting, followed by interest rate announcement - Frankfurt
- (0700 ET/1100 GMT) Treasury announces 13- and 26-week bills (e: $51/45 bn)
- (0745 ET/1145 GMT) FedTrade operation 30-year Fannie Mae/Freddie Mac (max $675 mn)
- (1000 ET/1500 GMT) ECB President Mario Draghi holds a press conference, after the interest rate meeting. - Frankfurt
- (0800 ET/1300 GMT) Treasury auctions $30 bn 7-year notes
FX Beat
DXY: Dollar index edges higher from 2-week lows at 94.08, trades slightly higher at 94.29. Technical studies on daily charts are turning bearish. Focus on US US Q2 GDP figures for further impetus.
EUR/USD: The single currency remains largely muted despite a breakthrough in U.S.-EU trade talks overnight as traders remain wary ahead of the ECB policy meet. European Central Bank (ECB) monetary policy decision due to be announced today at 1145 GMT, which will be followed by President Draghi’s press conference at 1230 GMT. EUR/USD struggles at 55-EMA at 1.1753. Breakout could see further upside.
GBP/USD: Cable extends gains as expectations about a rate hike next week from the Bank of England underpinned the British pound. The pair is trading higher for fifth consecutive session and has jumped more than 250 pips from the low of 1.29575 made on July 19th 2018. Intraday trend is bullish as long as support at 1.3125 holds. Any break below 1.3125 will drag the pair down till 1.3070/1.3000. Any break below 1.2950 confirms further weakness.
CAD/CHF: CAD/CHF is likely on verge of a bullish breakout. Technical indicators for the pair are turning bullish. Price action has edged above major EMAs after bullish divergence on Stochs. Stochs have rolled over from oversold levels and RSI is also above 50 levels. The pair is currently trading muted after previous session's spike with stiff resistance at 0.7615 (nearly converged 200-DMA and cloud). Breakout there could see further bullishness. Scope then for test of 61.8% Fib at 0.7686. Rejection at 200-DMA could see retrace till 21-EMA at 0.7565. Violation there could see further weakness.
USD/JPY: Greenback came under renewed selling pressure after U.S. and EU agreed to begin talks on lowering tariffs dented risk assets. USD/JPY resumes declines, trades 0.14% lower on the day at 110.82 at the time of writing. Technical indicators support further weakness. 50-DMA at 110.55 is immediate support. Violation at 50-DMA wil take the pair lower to test 200-DMA at 110 levels. Focus now on U.S. durable goods, goods trade balance, wholesale inventories, initial jobless claims, KC Fed manufacturing index.
NZD/USD: Antipodeans subdued on Thursday's trade. AUD/USD retraced from session highs at 0.7463 to trade at 0.7426, down 0.38% on the day. While, NZD/USD was down 0.18% at 0.6823 at around 1050 GMT. NZD/USD has shown a breakout at major trendline resistance at 0.6810, bias higher. Upside finds immediate resistance at 23.6% Fib at 0.6854 ahead of 50-DMA at 0.6880. Focus now shifts towards the US US Q2 GDP figures slated for release this Friday.
Equities Recap
Breakthrough in U.S.-EU trade talks boosted European stocks on Thursday. The pan-European STOXX 600 index was up 0.53 percent at 389.24 points, while the FTSEurofirst 300 index rose 0.53 percent to 1,524.20 points.
Britain's FTSE 100 largely unchanged at 7,659.14 points, while mid-cap FTSE 250 was up 0.2 percent to 20,757.94 points.
Germany's DAX was up 1.33 percent at 12,746.25 points; France's CAC 40 was up 0.57 percent at 5,457.56 points.
Commodities Recap
Brent crude prices rise as Saudi suspends Red Sea shipments following an attack on two of its oil tankers. Further, EIA data showing U.S. inventories fell to a 3-1/2 year low added to upside pressure.
Brent crude futures had risen 55 cents to $74.48 a barrel by 0832 GMT. While U.S. West Texas Intermediate crude futures were 4 cents lower at $69.26 barrel.
Gold prices edge lower on the day as dollar gains vs yuan. Spot gold was down 0.3 percent at $1,227.61 an ounce, as of 0755 GMT. U.S. gold futures for August delivery were 0.3 percent lower at $1,227.70 an ounce.
Silver edged 0.4 percent lower to $15.50 an ounce. Palladium dropped 0.5 percent to $934.50 an ounce. Platinum was down 0.5 percent at $836.10 an ounce.
Treasuries Recap
U.S.: The U.S. Treasuries slumped Thursday, after a successful meeting between President Donald Trump and European Commission counterpart Juncker Claude held late yesterday. Investors, will today remain focused on the country’s initial jobless claims and 7-year auction, both scheduled to be released today by 12:30GMT and 17:00GMT respectively. The yield on the benchmark 10-year Treasuries jumped 3 basis points to 2.96 percent, the super-long 30-year bond yields also surged 3 basis points to 3.09 percent and the yield on the short-term 2-year traded nearly 1 basis point higher at 2.66 percent.
EUR: The German bunds plunged during European session Thursday as investors moved away from safe-haven assets, following optimism over Trump-Juncker trade talks ahead of the European Central Bank’s (ECB) monetary policy meeting, scheduled to be held today at 11:45GMT for further direction in the debt market. The German 10-year bond yields, which move inversely to its price, jumped 2-1/2 basis points to 0.41 percent, the yield on 30-year note surged 3 basis points to 1.06 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.60 percent.
JGBs: The 10-year Japanese government bond yield touched a 6-month high during Asian session Thursday as investors continue to speculate that the Bank of Japan (BoJ) will adopt a change in its monetary policy stance at its July meeting, scheduled for early next week. Debt prices had gained a day back when the central bank engaged in an unlimited amount of government bond-buying, pulling yields lower; however, it refrained from any daily market bond-buying operation today. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 2-1/2 basis points to 0.09 percent, the yield on the long-term 30-year note surged nearly 3-1/2 basis points to 0.81 percent and the yield on short-term 2-year too traded 1 basis point higher at -0.11 percent.
AUD: Australian government bonds traded narrowly mixed in subdued Thursday session as markets receive no more important data for now. But, investors will now focus on the European Central Bank monetary policy decision and U.S. Q2 GDP data. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 1 basis point to 2.699 percent, the yield on the long-term 30-year Note up 1/2 basis point to 3.175 percent and the yield on short-term 2-year fell 1/2 basis point to 2.046 percent.
