Market Roundup
- EUR/USD 0.48%, USD/JPY -0.67%, GBP/USD -0.7%, EUR/GBP 0.56%
- DXY -0.34%, DAX -0.52%, FTSE -0.15%, Brent -0.57%, Gold 0.72%
- EZ Jul Sentix Index 28.2 vs 27.7, 27.4 forecast
- EZ Jul Producer Prices MM 0.0% vs -0.1%, -0.2% revised, 0.1% forecast
- EZ Jul Producer Prices YY 2.0% vs 2.5%, 2.4% revised, 2.2% forecast
- Great Britain Aug Markit/CIPS Cons PMI 51.1 vs 51.9, 52.0 forecast
- Labor shortage, Olympic buildup seen sustaining Japan CAPEX growth – Nikkei
- Japan industrial material imports hit by chancing Asia landscape – Nikkei
- Foreign Investment – Japan better bet than US? – Barron’s
- South Korea warns that North may launch ICBM after nuclear test
- Trump to scrap protection for "Dreamers," give Congress 6 months to fix
- U.S. gasoline price sink as Harvey subsides
- Gold prices near 1-year high in wake of N. Korea nuclear test
Economic Data Ahead
- (1901 ET/2301 GMT) The British Retail Consortium (BRC) will report its Like-for-Like Retail Sales for the month of August. The index rose at an annualized rate of 0.9 percent in July.
- (1930 ET/ 2330 GMT) The Australian Industry Group (AiG) releases its Performance of Services Index for the month of July. The index stood at 56.4 in the previous month.
Key Events Ahead
- No significant event scheduled
FX Beat
DXY: The dollar slumped against the Japanese yen and the Swiss franc as concerns about geopolitical risks following North Korea's nuclear test over the weekend heightened risk aversion. The greenback against a basket of currencies traded 0.3 percent down at 92.55, having touched a low of 91.62 last week, its lowest since Jan 2015. FxWirePro's Hourly Dollar Strength Index stood at -70.51 (Bearish) by 1000 GMT.
EUR/USD: The euro rallied against the dollar after data showed Eurozone's Sentix investor confidence index rose to 28.2 in September, surpassing estimates of 27.4 and previous reading of 27.7. However, downbeat EZ producer price index figures capped the upside in the major. The European currency traded 0.4 percent up at 1.1908, having touched a high of 1.2070 last week, its highest since Dec. 2014. FxWirePro's Hourly Euro Strength Index stood at -48.38 (Neutral) by 1000 GMT. The pair has taken support near 21- day EMA at 1.1813 and any break below will drag the pair down till 1.1770/1.1745. On the higher side, 1.19765 (61.8% fibo) will be acting as near term intraday resistance and any break above will take it till 1.2000/1.2070 (161.8% retracement).
USD/JPY: The dollar tumbled to 6-day low against the safe-haven Japanese yen as concerns about geopolitical risks following North Korea's latest nuclear test over the weekend triggered a fresh bout of risk aversion across the financial markets. The major was trading 0.6 percent down at 109.58, having hit a high of 110.67 on Thursday, its highest since Aug. 16. FxWirePro's Hourly Yen Strength Index stood at 44.79 (Neutral) by 1000 GMT. On the lower side, any break below 108 confirms minor weakness, a decline till 106 likely. The pair is facing minor resistance at 110.67 (55- day EMA) and any convincing break above will take it till 111.15 (100- day MA)/112.
GBP/USD: Sterling declined, reversing some of its previous session gains following the release of the UK construction sector activity report, which showed the weakest reading since August 2016. The economy's final construction Purchasing Managers' Index dropped sharply to 51.1 points in August, after rising 51.9 points in July. Sterling traded 0.1 percent down at 1.2941, having hit a high of 1.2995 in the previous session, its highest since August 14. FxWirePro's Hourly Sterling Strength Index stood at 64.65 (Bullish) by 1000 GMT. The near term resistance is around 1.3000 and any break above will take the pair to next level till 1.30308/1.3050/1.3100. On the lower side, near term support stands at 1.2840 (61.8% fibo) and any break below will drag it down till 1.2800/1.27730. Against the euro, the pound was trading 0.5 percent down at 91.99 pence, having hit a multi-month low of 93.06 pence last week.
USD/CHF: The Swiss franc gained as news of North Korea's latest nuclear test triggered a fresh bout of risk aversion, sending investors towards safe-haven assets. The major trades 0.6 percent down at 0.9583, having touched a high of 0.9679 on Thursday, it’s highest since Aug. 23. FxWirePro's Hourly Swiss Franc Strength Index stood at 28.85 (Neutral) by 1000 GMT. Major near term intraday resistance is around 0.9630 and any break above confirms minor bullishness, a jump till 0.9680/0.9700/0.9725 likely. The near term support is around 0.95450 and any break below will drag the pair till 0.95295/0.9500.
AUD/USD: The Australian dollar eased as downbeat domestic data showing company operating profits declined by 4.5 percent in the second quarter coupled with falling crude oil prices weighed heavily on the major. The Aussie trades 0.1 percent down at 0.7951, having hit a high of 0.7995 on Wednesday, it’s strongest since Aug. 1. FxWirePro's Hourly Aussie Strength Index stood at 35.85 (Neutral) by 1000 GMT. On the lower side, near term support is around 0.7875 (61.8% retracement) and any break below will drag the pair till 0.7800. The near term resistance is around 0.8070 and any break above targets 0.8100/0.8150.
Equities Recap
European shares slumped, while safe haven assets gains as news of North Korea's latest nuclear test triggered a fresh bout of risk-off sentiment.
The pan-European STOXX 600 index declined 0.5 percent to 374.31 points, while the FTSEurofirst 300 index eased 0.5 percent to 1,471.16 points.
Britain's FTSE 100 trades 0.1 percent down at 7,428.48 points, while mid-cap FTSE 250 fell 0.4 percent to 19,716.22 points.
Germany's DAX fell 0.4 percent at 12,091.00 points; France's CAC 40 trades 0.4 percent lower at 5,104.13 points.
Commodities Recap
Crude oil prices declined after a powerful North Korean nuclear test triggered risk off market sentiment, sending investors towards assets perceived to be safer. International benchmark Brent crude was trading 0.7 percent down at $52.37 per barrel by 0925 GMT, having hit a high of $52.91 the prior session, its strongest since Aug. 18. U.S. West Texas Intermediate was trading down at $47.30 a barrel, after falling as low as $45.57 on Thursday, its lowest since Jul. 24.
Gold prices rallied 1 percent to their highest in almost a year after North Korea's latest nuclear test drove investors seeking safety into safe-haven assets. Spot gold was trading 0.6 percent higher at $1,334.21 per ounce by 0932 GMT, having hit a high of $1,339.76 earlier, its highest since September 2016. U.S. gold futures for December delivery were up 1 percent at $1,344 an ounce.
Treasuries Recap
The UK gilts traded flat Monday after the country’s construction PMI for the month of August disappointed, coming in at 51.1, from 51.9 in July, missing expectations of 52.0. The yield on the benchmark 10-year gilts, hovered around 1.05 percent, the super-long 30-year bond yields climbed nearly 1 basis point to 1.72 percent and the yield on the short-term 2-year traded flat at 0.18 percent.
The German government bonds traded higher Monday as investors wait to watch the country’s 5-year auction, scheduled to be held on September 6 by 09:35GMT. The German 10-year bond yields, which moves inversely to its price, fell nearly 1-1/2 basis points to 0.36 percent, the yield on 30-year note slipped 1 basis point to 1.15 percent and the yield on short-term 2-year traded flat at -0.73 percent.
The Japanese government bonds traded flat Monday as investors remained cautious ahead of the country’s 10-year as well as super-long 30-year auction scheduled to be held on September 5 and 7 by 03:45GMT respectively. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.01 percent, the yield on the long-term 30-year flat at 0.82 percent and the yield on short-term 2-year traded tad higher at -0.15 percent.
The New Zealand bonds closed on a mixed note Monday as investors wait to watch the country’s GlobalDairyTrade price auction, scheduled to be held on September 5 amid a silent trading week that will witness little data of major economic significance. At the time of closing, the yield on the benchmark 10-year Treasury note hovered around 2.86 percent, the yield on 7-year note rose nearly 1 basis point to 2.70 percent and the yield on short-term 2-year ended 1 basis point lower at 2.00 percent.
The Australian bonds jumped at the start of the trading week Monday as investors wait to watch the Reserve Bank of Australia’s (RBA) monetary policy decision, followed by Governor Lowe’s speech, scheduled to be held on September 5 by 04:30GMT and 09:10GMT respectively. The yield on the benchmark 10-year Treasury note slumped nearly 2-1/2 basis points to 2.65 percent, the yield on 15-year note plunged nearly 3 basis points to 2.95 percent and the yield on short-term 2-year traded 1-1/2 basis points lower at 1.85 percent.
