Market Roundup
- EUR/USD 0.18%, USD/JPY -0.23%, GBP/USD -0.22%, EUR/GBP 0.39%
- DXY -0.14%, DAX -0.08%, FTSE -0.02%, Brent -0.56%, Gold 0.21%
- EZ Markit Manufacturing Flash PMI Aug 57.4 vs 56.6, 56.3 forecast
- EZ Markit Service Flash PMI Aug 54.9 vs 55.4, 55.4 forecast
- EZ Markit Composite Flash PMI Aug 55.8 vs 55.7, 55.5 forecast
- German PMI better across the board but highlighted by manufacturing
- Unconventional policy a success but knowledge gaps remain: Draghi
- Trump defends Charlottesville response at raucous rally
- North Korea presses rocket programme, but amid signs of drama easing
- Oil prices fall on concerns of oversupply as Libyan output recovers
- Gold inches up as focus shifts to Jackson Hole conference
Economic Data Ahead
- (0900 ET/1300 GMT) Mexican retail sales are likely to have rebounded 0.3 percent in June after rising 0.13 percent in the previous month.
- (0930 ET/1330 GMT) Brazil's current account deficit is likely to widen to $3.2 billion in July after posting a surplus of $1.330 billion in the previous month.
- (0945 ET/1345 GMT) Financial firm Markit releases U.S. preliminary Manufacturing PMI for the month of August. The index is likely to edge up to 53.3, after posting a similar final reading in the previous month.
- (0945 ET/1345 GMT) Financial firm Markit releases preliminary U.S. composite PMI for the month of August. The index posted a final reading of 54.6 in the previous month.
- (0945 ET/1345 GMT) Financial firm Markit Economics is likely to report that preliminary U.S. service PMI business activity index rose to 54.9 in August after printing a final reading of 54.7 in July.
- (1000 ET/1400 GMT) The U.S. new home sales are expected to have increased 0.3 percent to a seasonally adjusted annual rate of 612,000 units in July, after rising 0.8 percent in September.
- (1000 ET/1500 GMT) The European Commission releases Eurozone's preliminary Consumer Confidence reading for the month of August. The index posted a final reading of -1.7 in the prior month.
- (1100 ET/1600 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending August 18.
- (1645 ET/2145 GMT) The Statistics New Zealand releases its trade balance data for the month of July. The economy posted an annual trade deficit of $3.660 billion in June.
- (1850 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending August 14.
- (1850 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending August 14.
Key Events Ahead
- (1145 ET/1545 GMT) Fed Trade operation 30-year Ginnie Mae (max $1.475 bn)
- (1305 ET/1705 GMT) Federal Reserve Bank of Dallas President Robert Kaplan participates in a moderated question-and-answer session before a Permian Basin Petroleum Association Membership luncheon in Midland, Texas.
FX Beat
DXY: The dollar eased against the Japanese yen as markets remained cautious ahead of an annual gathering of central bankers at Jackson Hole later in the week. The greenback against a basket of currencies traded 0.1 percent down at 93.41, having touched a high of 94.15 last week, it’s highest since July 26. FxWirePro's Hourly Dollar Strength Index stood at 22.86 (Neutral) by 1000 GMT.
EUR/USD: The euro rose, reversing most of its previous session losses, after data showed Markit’s preliminary manufacturing PMI rose to 55.8, beating expectations and previous reading of 55.7. The European currency traded 0.2 percent up at 1.1784, having touched a high of 1.1828 on Monday, its highest since Aug. 14. FxWirePro's Hourly Euro Strength Index stood at 39.59 (Neutral) by 1000 GMT. On the lower side, near term support is around 1.16575 (23.6% retracement of 1.08930 and 1.19103) and any break below will drag the pair till 1.15985/1.1500. The minor support is around 1.1750/1.1680. The near term resistance is around 1.1850 and any break above will take it till 1.19103 (Aug 8th 2017)/1.19391 (1.13% retracement of 1.19103 and 1.16880)/1.1200.
USD/JPY: The dollar eased against the Japanese yen as investors braced for speeches from European Central Bank President Mario Draghi and Federal Reserve Chair Janet Yellen this week. The major was trading 0.2 percent down at 109.35, having hit a low of 108.60 on Friday, its lowest since Apr. 19 2016. FxWirePro's Hourly Yen Strength Index stood at 26.65 (Neutral) by 1000 GMT. The pair is facing minor resistance at 109.77 (daily Tenkan-Sen) and any convincing break above will take the pair till 110.20 (21- day EMA)/111.20 (100- day MA). The near term resistance is around 112 and any break above targets 112.98/114.
GBP/USD: Sterling tumbled to a fresh 8-week low below the 1.2800 handle as worries over Britain's economic prospects and the Brexit process weighed heavily on the British currency. The major traded 0.2 percent down at 1.2797, having hit a low of 1.2791 on Friday, its lowest since July 12. FxWirePro's Hourly Sterling Strength Index stood at -98.31 (Slightly Bearish) by 1000 GMT. The nearby support is around 1.27763 (38.2% fibo) and any break below will drag the pair down till 1.2700/1.2650 (200- day MA). On the higher side, minor jump can be seen only above 1.28770 (100- day MA) and any break above will take it till 1.2920/1.2955. Against the euro, the pound was trading 0.4 percent down at 92.04 pence, having hit a fresh 10-month low of 92.13.
USD/CHF: The Swiss franc fell to a near 1-week low as the greenback gained some momentum following the release of upbeat regional manufacturing indexes from the U.S. The major trades flat at 0.9686, having touched a high of 0.9765 last week, it’s highest since Aug. 8. FxWirePro's Hourly Swiss Franc Strength Index stood at 24.10 (Neutral) by 1000 GMT. The pair is facing near term support at 0.9580 and any close below will drag the pair till 0.9550/0.9500/0.94370. On the higher side, upside capped at 0.9783 (38.2% retracement of 1.03432 and 0.94385) and any break above will take it till 0.9845/0.9900.
AUD/USD: The Australian dollar slumped, extending previous session losses, ahead of an annual gathering of central bankers at Jackson Hole later in the week. The Aussie trades 0.2 percent down at 0.7896, having hit a high of 0.7962 last week, it’s strongest since Aug. 04. FxWirePro's Hourly Aussie Strength Index stood at 15.31 (Neutral) by 1000 GMT. On the lower side, near term support is around 0.7800 and any break below will drag the pair till 0.7760 (61.8% fibo)/0.7688 (89- day EMA). The near term resistance is around 0.8070 and any break above targets 0.8100/0.8150.
Equities Recap
European shares declined, weighed down by media stocks, while the dollar eased against the yen as investors were wary of taking fresh bets ahead of Jackson Hole symposium.
The pan-European STOXX 600 index eased 0.3 percent to 374.75 points, while the FTSEurofirst 300 index declined 0.3 percent to 1,472.00 points.
Britain's FTSE 100 trades 0.05 percent down at 7,378.11 points, while mid-cap FTSE 250 gained 0.1 percent to 19,774.75 points.
Germany's DAX fell 0.07 percent at 12,154.33 points; France's CAC 40 trades 0.06 percent lower at 5,129.00 points.
Commodities Recap
Crude oil prices consolidated within a narrow range, as concerns of oversupply and a rise in U.S. gasoline inventories weighed on market sentiment. International benchmark Brent crude was trading 0.1 percent up at $51.66 per barrel by 1026 GMT, having hit a high of $52.93 on Friday, its strongest since Aug. 8. U.S. West Texas Intermediate was trading 0.2 percent at $47.71 a barrel, after rising as high as $48.71 last week, its highest since Aug. 14.
Gold prices edged up, supported by concerns over political uncertainty in the United States ahead of a major central banking conference this week. Spot gold was up 0.2 percent to $1,286.50 an ounce at 1028 GMT, having touched a high at $1,300.80 per ounce last week, its highest since Nov. U.S. gold futures were unchanged at $1,292 per ounce.
Treasuries Recap
The U.S. Treasuries remained steady as investors wait to watch the Federal Open Market Committee (FOMC) member Kaplan’s speech, scheduled to be held today by 13:05GMT. Also, markets remain focussed to observe the speeches from the upcoming Jackson Hole Symposium, scheduled to be held on August 24 for detailed insight into debt trading. The yield on the benchmark 10-year Treasury, remained flat at 2.22 percent, the super-long 30-year bond yields hovered around 2.78 percent and the yield on short-term 2-year note also traded steady at 1.32 percent.
The UK gilts traded flat as investors wait to watch the country’s second-quarter gross domestic product, due to be released on August 24 by 08:30GMT. The yield on the benchmark 10-year gilts, hovered around 1.08 percent, the super-long 30-year bond yields traded flat at 1.75 percent while the yield on the short-term 2-year traded 1-1/2 basis points lower at 0.20 percent.
The German government bonds slumped Tuesday after the country’s manufacturing PMI surged during the month of August. Also, investors remained focussed to read the country’s second-quarter gross domestic product, scheduled to be released on August 25 by 06:00GMT. The German 10-year bond yields, which moves inversely to its price, jumped 1-1/2 basis points to 0.41 percent, the yield on 30-year note also climbed 1-1/2 basis points to 1.16 percent and the yield on short-term 2-year traded nearly 1 basis point higher at -0.71 percent.
The Japanese bonds traded nearly flat Wednesday as market awaits inflation data scheduled for Thursday, August 24 at 23:30 GMT. Also, little trading activity is observed in the light of no important economic data or events. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat 0.036 percent, the yield on long-term 40-year note remained steady at 1.043 percent and the yield on short-term 3-year hovered around -0.129 percent.
The New Zealand bonds slumped at the time of closing Wednesday after the government released its Pre-election Economic and Fiscal Update (PREFU), where it reflects policy decisions that were signed off by Cabinet up to 7 August, but do not incorporate any new or upcoming policy announcements. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 4 basis points to 2.94 percent, the yield on 7-year note climbed 3-1/2 basis points to 2.79 percent while the yield on short-term 2-year ended 1 basis point lower at 2.07 percent.
The Australian bonds slumped Wednesday tracking weakness in the U.S. treasuries as investors digest weak economic data ahead of the Federal Reserve’s Jackson Hole Economic Policy Symposium scheduled for this Friday in Wyoming. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose more than 3 basis points to 2.685 percent, the yield on 15-year note also climbed 3 basis points to 2.983 percent and the yield on short-term 2-year rose 2 basis points to 1.847 percent.
