Market Roundup
- EUR/USD +0.11%, USD/JPY -0.17%, GBP/USD -0.02%, EUR/GBP +0.14%
- DXY -0.1%, DAX +0.03%, FTSE -0.07%, Brent +0.52%, Gold +0.27%
- Germany Jun Trade balance (EUR) SA, 21.2 bln vs forecast 21.0 bln, previous 20.3 bln
- Germany Jun Imports m/m SA, -4.5% vs forecast 0.2%, previous 1.2% revised 1.3%
- Germany Jun Imports m/m SA, -2.8% vs forecast -0.30%, previous 1.4% revised 1.5%
- China July exports, imports weaker than expected, cloud global outlook
- BOJ should dial back stimulus even if inflation misses target - ex-dep gov Iwata
- No-confidence vote signals "High Noon" for South Africa's Zuma
- Tillerson in Thailand presses for more action on North Korea
- Oil prices steady as Saudi cuts September supplies
- Gold rises as dollar eases, focus on U.S. inflation data
Economic Data Ahead
- (1000 ET/1400 GMT) The U.S. Labor Department releases Job Openings and Labor Turnover Survey (JOLTS) report for the month of July. The report is expected to show job openings rose to 5.775 million from 5.666 million in May.
- (1000 ET/1400 GMT) The Investor's Business Daily (IBD)/ TechnoMetrica Institute of Policy and Politics (TIPP) will release U.S. Economic Optimism index for the month of August. The indicator rose to 50.2 in July.
- (1500 ET/1900 GMT) Argentina will release its CPI figures for the month of July.
- (1630 ET/2130 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- (1145 ET/1545 GMT) FedTrade operation 15-year Fannie Mae / Freddie Mac (max $475 mn)
- (1835 ET/2235 GMT) Reserve Bank of Australia Assistant Governor Christopher Kent Speech
FX Beat
DXY: The dollar slumped across the board as investors remain unconvinced that the Federal Reserve will hike rates again this year. The greenback against a basket of currencies traded 0.2 percent down at 93.30, having touched a high of 93.77 on Friday, it’s highest since July 28. FxWirePro's Hourly Dollar Strength Index stood at 70.78 (Bullish) by 1000 GMT.
EUR/USD: The euro edged up, extending gains above the 1.1800 handle, underpinned by a broadly weaker U.S. dollar and softer tone seen around the European equities. However, downbeat German exports figures limited the upside in the major. The European currency traded 0.2 percent up at 1.1816, having touched a high of 1.1909 on Wednesday, its highest since Jan 5, 2015. FxWirePro's Hourly Euro Strength Index stood at 22.02 (Neutral) by 1000 GMT. The near term resistance is around 1.18280 (100- H MA) any break above will take the pair till 1.1910. On the lower side, 1.17650 (55- M EMA) will be acting as near term support and any break below will drag it down till 1.1720/1.16500.
USD/JPY: The dollar eased as markets priced in less than a 50 percent chance of another Fed hike in 2017 following the latest dovish comments from St. Louis Fed President James Bullard and Minneapolis Fed President Neel Kashkari on Monday. The major was trading 0.3 percent down at 110.43, having hit a low of 109.84 on Friday, its lowest since Jun 15. FxWirePro's Hourly Yen Strength Index stood at 118.66 (Highly Bullish) by 1000 GMT. On the lower side, the pair is facing major support at 110 and any break below will drag the pair down till 108. The pair upside capped by daily Tenken-Sen at 111.01 and any break above will take it till 111.38 (100- day MA).
GBP/USD: Sterling consolidated near a 2-week low against the dollar as investors grew bearish about the outlook of the economy. Data released overnight showed British retail sales on a like-for-like basis grew more slowly at an annual 0.9 percent in July, down from growth of 1.2 percent in June. Sterling traded flat at 1.3033, having hit a low of 1.3014 the prior day, its lowest since July 26. FxWirePro's Hourly Sterling Strength Index stood at -151.44 (Highly Bearish) by 1000 GMT. On the higher side, near term resistance is around 1.3060 and any break above will take the pair till 1.3075 (23.6% retracement of 1.32680 and 1.30140). The near term support is around 1.3000 and any break below will drag it till 1.2930. Against the euro, the pound was trading 0.2 percent down at 90.66 pence, having hit a fresh 10-month low of 90.69 earlier in the session.
USD/CHF: The Swiss franc rose after slumping for two consecutive sessions as the greenback eased on easing expectations that the Federal Reserve will hike rates again this year. The major trades 0.1 percent down at 0.9720, having touched a high of 0.9764 last week, it’s highest since Jun. 20. FxWirePro's Hourly Swiss Franc Strength Index stood at -18.94 (Neutral) by 1000 GMT. The minor bullishness can be seen only above 0.9770 (Jul 15th high) and any break above will take the pair till 0.9808 (May 30th, 2017 high)/0.9847 (61.8% fibo). On the lower side, minor reversal can be seen below 0.9685 (23.6% retracement of 0.94385 and 0.97643) and any break below will drag it till 0.9645 (21- day EMA)/0.9560 (61.8% fibo)/0.9500.
AUD/USD: The Australian dollar gained, halting its 5-day losing streak as upbeat domestic business conditions and broad based U.S. dollar weakness boosted the bid tone around the major. The Aussie trades 0.4 percent up at 0.7941, having hit a low of 0.7891 on Friday, it’s weakest since July 26. FxWirePro's Hourly Aussie Strength Index stood at 13.86 (Neutral) by 1000 GMT. On the lower side, near term support is around 0.7870 (21- day EMA) and any break below will drag the pair till 0.7800/0.7760. The near term resistance is around 0.8070 and any break above targets 0.8100/0.8150.
Equities Recap
European shares edged lower following a decline among miners and travel stocks, while the greenback eased as investors remained concerned over the prospects of another U.S. Federal Reserve interest rate hike this year.
The pan-European STOXX 600 index fell 0.01 percent to 381.99 points, while the FTSEurofirst 300 index shed 0.05 percent to 1,501.83 points.
Britain's FTSE 100 trades 0.1 percent down at 7,526.10 points, while mid-cap FTSE 250 declined 0.1 percent to 19,974.40 points.
Germany's DAX rose 0.1 percent at 12,271.45 points; France's CAC 40 trades 0.01 percent higher at 5,208.60 points.
Commodities Recap
Crude oil prices rose, reversing most of its previous session losses on news that lower crude supplies from Saudi Arabia offset higher production from other large exporters. International benchmark Brent crude was trading 0.6 percent up at $52.56 per barrel by 1015 GMT, having hit a high of $52.90 on Tuesday, its strongest since May 25. U.S. West Texas Intermediate was trading 0.7 percent higher at $49.63 a barrel, after rising as high as $50.40 on Tuesday, its strongest since May 25.
Gold prices edged up as the dollar slightly declined ahead of the U.S. inflation figures later this week for hints on the pace of monetary tightening by the Federal Reserve. Spot gold was 0.4 percent up at $1,262.43 per ounce, as of 1026 GMT, having touched a low of $1,254.08 on Friday, its lowest since July 26. U.S. gold futures for December delivery rose 0.1 percent to $1,265.40 per ounce.
Treasuries Recap
The U.S. Treasuries remained slightly lower ahead of the 3-year auction, scheduled to be held today by 17:00GMT, besides the 10-year note auction, due on August 9 by 17:00GMT. The yield on the benchmark 10-year Treasury, rose nearly 1 basis point to 2.26 percent, the super-long 30-year bond yields hovered around 2.84 percent and the yield on short-term 2-year note traded nearly flat at 1.36 percent.
The UK gilts traded flat Tuesday as investors remained avoided any major trading activity amid lack of economically significant data and as they closely eye the country’s manufacturing production for the month of June for further direction in the debt market. The yield on the benchmark 10-year gilts, rose 1 basis point to 1.15 percent, the super-long 30-year bond yields hovered around 1.79 percent and the yield on the short-term 2-year also traded flat at 0.22 percent.
The German bonds remained flat in European session Tuesday despite the country’s surplus growing wider than market anticipations. Also, investors are closely eyeing the 5-year auction, scheduled to be held on August 9 by 09:35GMT, which will provide further direction in the debt market. The benchmark German 10-year bond yields, which moves inversely to its price hovered around 0.45 percent, the yield on long-term 30-year note remained flat at 1.20 percent and the yield on short-term 3-year traded nearly 1 basis point higher at -0.67 percent.
The Japanese government bonds edged down Tuesday, taking cues from an overnight performance of the U.S. Treasuries in choppy trading on Monday after Friday's stronger-than-expected U.S. non-farm payrolls report, with no real influences ahead of government bond and corporate supply this week. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1/2 basis point to 0.07 percent, the yield on long-term 30-year note hovered around at 0.88 percent and the yield on short-term 2-year too traded flat at -0.10 percent.
The New Zealand 10-year bond yields closed Tuesday’s session at 5-1/2 week low as investors wait to watch the Reserve Bank of New Zealand’s (RBNZ) monetary policy decision scheduled to be unveiled on August 9. Further, the central bank Governor Wheeler’s speech, following the meeting, will add further guidance to the debt market. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 7 basis points to 2.88 percent, the yield on 7-year note also plunged 7 basis points to 2.72 percent and the yield on short-term 2-year ended 5 basis points lower at 2.02 percent.
The Australian bonds continued to be on the downside Tuesday as investors moved away from safe-haven assets despite sharp losses witnessed in the equity market, slightly tracking U.S. Treasuries. Also, markets will be focusing on the RBA Assistant Governor Kent’s speech, scheduled to be held today by 22:35GMT, for further direction in the debt market. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1 basis point to 2.64 percent, the yield on the 15-year note climbed 1/2 basis point to 2.94 percent and the yield on short-term 2-year also traded 1 basis point higher at 1.80 percent.
