Market Roundup
•Italian Jul Composite PMI 50.3 forecast, 51.3 previous
•Italian Jul Italian Services PMI 51.7,53.0 forecast, 53.7 previous
•French Jul S&P Global Composite PMI 49.1,49.5 forecast,48.8 previous
•French Jul Services PMI 50.1, 50.7 forecast,49.6 previous
•German Jul Composite PMI 49.1,48.7 forecast, 50.4 previous
•German Jul Services PMI 52.5, 52.0 forecast,53.1 previous
•EU Jul Services PMI 51.9, 51.9 forecast, 2.8 previous
•EU Jul S&P Global Composite PMI 50.2, 50.1 forecast,50.9 previous
•UK Jul Composite PMI 52.8, 52.7 forecast, 52.3 previous
•UK Jul Services PMI 52.5, 52.4 forecast, 52.1 previous
•EU Aug Sentix Investor Confidence -13.9, -5.5 forecast,-7.3 previous
•EU Jun PPI (YoY) -3.2%, -3.3% forecast,-4.2% previous
Looking Ahead Economic Data(GMT)
•13:00 French 6-Month BTF Auction 3.456% previous
•13:00 French 3-Month BTF Auction 3.610% previous
•13:00 French 12-Month BTF Auction 3.252% previous
•13:45 US Jul Services PMI 56.0 forecast,55.3 previous
•13:45 US Jul S&P Global Composite PMI 55.0 forecast,54.8 previous
•14:00 US Jul ISM Non-Manufacturing Employment 46.1 previous
•14:00 US Jul ISM Non-Manufacturing Business Activity 49.6 previous
•14:00 US Jul CB Employment Trends Index 110.27 previous
•14:00 US Jul ISM Non-Manufacturing PMI 51.4 forecast,48.8 previous
•15:30 US 3-Month Bill Auction 5.145% previous
•15:30 US 6-Month Bill Auction 4.930% previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro rose on Monday as fears that the U.S. could be heading towards a recession sent investors dashing away from risk assets.Data on Friday showed that U.S. job growth in July fell short of expectations, with the unemployment rate rising to 4.3%, pointing to possible weakness in the labour market and greater vulnerability to recession. Traders are pricing a more than 70% chance of the U.S. central bank lowering rates by 50 basis points in September, compared with an 11.5% chance a week earlier, according to the CME FedWatch tool. On the data front, growth in euro zone business activity stalled last month - Purchasing Managers' Index for the currency union fell to 50.2 in July from 50.9 in June.Growth in Germany's services sector slowed for the second consecutive month in July. Immediate resistance can be seen at 1.0977(23.6%fib), an upside break can trigger rise towards 1.1000(Psychological level).On the downside, immediate support is seen at 1.0903(38.2%fib), a break below could take the pair towards 1.0839(50%fib).
GBP/USD: The pound eased on Monday as mounting concern over the possibility of a U.S. recession sent currency investors fleeing for the comparative safety of the Swiss franc and the euro.A series of data last week, culminating in Friday's U.S. monthly employment report, has ignited concern that the world's largest economy may be slowing more quickly than many had expected. Traders are now placing a 90% chance that the Federal Reserve will cut interest rates by half a point in September to ward off further economic deterioration. Sterling was down 0.3% on Monday at $1.2767 and down 0.6% against the euro at 85.72 pence. Immediate resistance can be seen at 1.2810(38.2%fib), an upside break can trigger rise towards 1.2930(23.6%fib).On the downside, immediate support is seen at 1.2713(50%fib), a break below could take the pair towards 1.2612(61.8%fib).
USD/CHF: The dollar declined against the Swiss franc on Monday as concerns that the U.S. could be heading towards a recession have sent investors to safe haven Swiss franc. Markets have been hit by Friday's weak U.S. July payrolls report, which showed the unemployment rate had risen to 4.3%, stoking concerns the world's biggest economy may be heading for a recession. Investors also kept a close eye on the Middle East conflict, with the Pentagon announcing that the U.S. military will deploy additional fighter jets and Navy warships to the Middle East to strengthen defence against threats from Iran and its allies, Hamas and Hezbollah. Immediate resistance can be seen at 0.8506(38.2%fib), an upside break can trigger rise towards 0.8606(Daily higih).On the downside, immediate support is seen at 0.8478 (23.6%fib), a break below could take the pair towards 0.8400(Psychological level).
USD/JPY: The dollar slipped against the yen on Monday as traders aggressively unwound carry trades after a slew of economic data last week raised the prospect of a U.S. economic downturn and bigger rate cuts from the Federal Reserve. Weaker-than-expected U.S. jobs data, along with disappointing earnings reports from large technology firms and heightened concerns over the Chinese economy, have sparked a global sell-off in stocks, oil and high-yielding currencies in the past week as investors sought the safety of cash. So called carry trades, where investors borrow in money from economies with low interest rates such as Japan or Switzerland to fund investments in higher-yielding assets elsewhere, have been popular in recent years. The dollar was last trading at 142.41 yen, down 2.8% on the day, with the yen trading near its strongest level since early January. Strong resistance can be seen at 143.93(38.2 %fib), an upside break can trigger rise towards 145.74 (50%fib). On the downside, immediate support is seen at 141.79(23.6%fib), a break below could take the pair towards 140.00 (Psychological level).
Equities Recap
European shares fell to near six-month lows amid a global selloff in equities on fears of a slowdown in U.S. economic growth, with only a handful of stocks trading in the green.
At (GMT 12:46 ),UK's benchmark FTSE 100 was last trading down at 2.94 percent, Germany's Dax was down by 3.20 percent, France’s CAC finished was down by 2.69 percent.
Commodities Recap
Gold prices fell more than 2% in volatile trading on Monday as investors liquidated positions in tandem with a broader equities selloff, though analysts said bullion's safe-haven appeal remains strong as U.S. recession fears mount.
Spot gold was down 2% at $2,393.66 an ounce by 1139 GMT. U.S. gold futures lost 1.4% to $2,434.10.
Oil futures extended losses in a volatile session on Monday, trailing a stock market selloff sparked by fears of a U.S. recession, though declines were buffered by worries that spreading conflict in the Middle East could hit crude supplies.
Brent crude futures dropped $1.07, or 1.4%, to $75.74 a barrel by 1128 GMT, with prices trading around their lowest since January. U.S. West Texas Intermediate crude was down $1.18, or 1.6%, at $72.34.
