Market Roundup
- EUR/USD -0.02%, USD/JPY -0.04%, GBP/USD -0.05%, EUR/GBP 0.03%
- DXY -0.01%, DAX -0.96%, FTSE -0.75%, Brent 0.43%, Gold -0.12%
- Trump and Trudeau upbeat about prospects for NAFTA deal by Friday
- IMF studying Argentina request for early help as peso crashes
- Sterling jumps on Brexit hopes, but no-deal risk caps gains
- EU Aug Industrial Sentiment, 5.5, 5.5 forecast, 5.8 previous
- EU Aug Services Sentiment, 14.7, 15.1 forecast, 15.3 previous
- EU Aug Consumer Confidence Final, -1.9, -1.9 forecast, -1.9 previous
- China says trade talks with U.S. should be based on "equality"
- Germany Aug Unemployment Chg SA, -8k, -8k forecast, -6k previous
- Germany Aug Unemployment Rate SA, 5.2%, 5.2% forecast, 5.2% previous
- Great Britain Jul BOE Consumer Credit, 0.817 bln, 1.500 bln forecast, 1.567 bln previous 1.521 bln revised
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Commerce Department releases personal income figures for July, which is expected to rise 0.3 percent, after gaining 0.4 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Commerce Department releases the personal consumption expenditures (PCE) price index for the month of July. The index rose at an annualized rate of 2.2 percent in the prior month, while core PCE is likely to have increased 2.0 percent in the 12 months through July from 1.9 in June
- (0830 ET/1230 GMT) The U.S. Personal spending is likely to rise 0.4 percent in the month of July, after posting similar gains in the previous month.
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 4,000 to a seasonally adjusted 210,000 for the week ended Aug. 24, while continuing claims for the week ended Aug. 17 is expected to decline to 1.725 million from a previous reading of 1.727 million.
- (0830 ET/1230 GMT) The Statistics Canada is expected to report that gross domestic product increased at a 3.0 percent annual rate in the second quarter from a 1.3 percent pace in the previous quarter. While on monthly basis, it is likely to rise 0.1 percent in June, after posting a growth of 0.5 percent in May.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending August 24.
Key Events Ahead
- (1330 ET/1730 GMT) Bundesbank chief Jens Weidmann speaks in Athens
FX Beat
DXY: The dollar index rebounded as some investors speculate a likely trade deal between the United States and Canada. The greenback against a basket of currencies trades 0.1 percent up at 94.61, having touched a low of 94.43 on Tuesday, its lowest since July 31. FxWirePro's Hourly Dollar Strength Index stood at -63.71 (Bearish) by 1000 GMT.
EUR/USD: The euro edged down, halting its four-day winning-streak after data showed Eurozone economic sentiment declined for an eighth consecutive month in August, weighed down by less optimism in industry and services. The European currency traded 0.1 percent down at 1.1697, having touched a high of 1.1733 on Tuesday, its highest since July 31. FxWirePro's Hourly Euro Strength Index stood at 62.85 (Bullish) by 1000 GMT. Investors’ attention will remain on series of data from Eurozone economies, ahead of the U.S. personal consumption expenditures-price index and unemployment benefit claims. Immediate resistance is located at 1.1747 (July 31 High), a break above targets 1.1790 (July 9 High). On the downside, support is seen at 1.1647 (5-DMA), a break below could drag it till 1.1570 (10-DMA).
USD/JPY: The dollar eased after rising to a near a 4-week peak in the previous session as concerns over trade conflicts fuelled appetite for safe-haven currencies. The major was trading 0.1 percent down at 111.56, having hit a high of 111.82 on Wednesday, its highest since August 3. FxWirePro's Hourly Yen Strength Index stood at -100.73 (Highly Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. personal consumption expenditures-price index and unemployment benefit claims. Immediate resistance is located at 111.95 (July 31 High), a break above targets 112.17 (July 11 High). On the downside, support is seen at 111.28 (5-DMA), a break below could take it lower 110.87 (10-DMA).
GBP/USD: Sterling nudge down from a near 4-week peak touched earlier in the day after Bank of England data that showed British consumers borrowed at the weakest pace in nearly three years in July on concerns of a soft economy ahead of Brexit. However, positive signals from London and Brussels over the trade provided support to the British pound. The major traded 0.1 percent down at 1.3017, having hit a high of 1.3042 earlier; it’s highest since August 3. FxWirePro's Hourly Sterling Strength Index stood at 117.63 (Highly Bullish) 1000 GMT. Immediate resistance is located at 1.3083 (July 19 High), a break above could take it near 1.3159 (July 24 High). On the downside, support is seen at 1.2888 (5-DMA), a break below targets 1.2799 (August 24 Low). Against the euro, the pound was trading 0.1 percent up at 89.76 pence, having hit a low of 90.98 on Tuesday, it’s lowest since September 2017.
USD/CHF: The Swiss franc surged to an over 4-month peak against the dollar amid growing concerns over the development of the U.S.-China trade war. The major trades 0.05 percent down at 0.9701, having touched a low of 0.9686 earlier, it’s lowest since April 19. FxWirePro's Hourly Swiss Franc Strength Index stood at 16.46 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9730 (23.6% retracement of 0.9866 and0.9686) and any break above will take the pair to next level till 0.9756 (38.2% retracement). The near-term support is around 0.9675 and any close below that level will drag it till 0.9640.
Equities Recap
European shares declined, while safe-haven currencies surged as concerns over global trade conflicts undermined investor risk sentiment.
The pan-European STOXX 600 index slumped 0.5 percent at 384.43 points, while the FTSEurofirst 300 index declined 0.4 percent to 1,506.95 points.
Britain's FTSE 100 trades 0.7 percent down at 7,511.80 points, while mid-cap FTSE 250 eased 0.2 percent to 20,699.87 points.
Germany's DAX fell 1.02 percent at 12,434.05 points; France's CAC 40 trades 0.4 percent lower at 5,477.52 points.
Commodities Recap
Crude oil prices rose, extending previous session gains amid growing evidence of disruptions to crude supply from Iran and Venezuela and after a fall in U.S. crude inventories. International benchmark Brent crude was trading 0.1 percent up at $77.42 per barrel by 1031 GMT, having hit a high of $77.52, its highest since July 11. U.S. West Texas Intermediate was trading 0.1 percent higher at $69.75 a barrel, after rising as high as $69.85 earlier, its highest since August 8.
Gold prices declined, reversing some of its previous session gains, as the greenback surged on the back of expectations of higher U.S. interest rates. Spot gold was down 0.2 percent at $1,204.08 an ounce at 1037 GMT, having hit a high of $1214.19 on Tuesday, its highest since August 10. U.S. gold futures shed 0.2 percent to $1,209 an ounce.
Treasuries Recap
The U.S. Treasuries gained ahead of the country’s initial jobless claims and personal consumer expenditure (PCE) data, a proxy for consumer price inflation, both scheduled to be released today by 12:30GMT. The yield on the benchmark 10-year Treasuries slipped 1/2 basis point to 2.87 percent, the super-long 30-year bond yields also remained tad lower at 3.018 percent and the yield on the short-term 2-year traded close to 1 basis point lower at 2.669 percent.
The German bunds jumped during European session as investors have largely shrugged-off a further drop in the country’s unemployment in the month of August and will now be awaiting Eurozone’s consumer price inflation (CPI) data for the same period, scheduled to be released on August 31 for further direction in the debt market. The German 10-year bond yields, which move inversely to its price, fell 1-1/2 basis points to 0.395 percent, the yield on 30-year note slipped1 basis point to 1.072 percent while the yield on short-term 2-year traded flat at -0.589 percent.
The New Zealand 10-year bond yield closed at a 2-low low after the country’s business confidence worsened in a decade, thus weighing on investors’ sentiments and leading to a rise in debt prices. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, plunged nearly 6-1/2 basis points to 2.575 percent, the yield on the long-term 20-year note slumped nearly 7 basis points to 2.895 percent while the yield on short-term 2-year closed nearly 1 basis point up at 1.673 percent.
The Japanese government bonds fell after the country’s retail sales for the month of July beat market expectations, albeit down from the previous reading in June, also revised lower. Investors will now wait to watch the country’s unemployment rate and industrial production for the month of July, scheduled to be released on August 30 by 23:50GMT for further direction in the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose 1 basis point to 0.111 percent, the yield on the long-term 30-year note also gained 1 basis point to 0.852 percent and the yield on short-term 2-year hovered around -0.108 percent
The Australian bond yields fell during the Asian session, tracking a similar movement in U.S. counterpart following an oversupply in the debt market after the United States Treasury Department auctioned off $31 billion in 7-year notes on Wednesday. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 1 basis point to 2.565 percent, the yield on the long-term 30-year bond jumped 1-1/2 basis points to 3.088 percent and the yield on short-term 2-year also rose nearly 1-1/2 basis points to 1.990 percent.
