Market Roundup
- EUR/USD 0.09%, USD/JPY -0.2%, GBP/USD 0.13%, EUR/GBP -0.03%
- DXY -0.16%, DAX 1.41%, FTSE 0.86%, Brent 0.18%, Gold 0.18%
- EZ Jul Markit Manufacturing Flash PMI, 55.1, 54.6 forecast, 54.9 previous
- EZ Jul Markit Service Flash PMI, 54.4, 55.0 forecast, 55.2 previous
- EZ Jul Markit Composite Flash PMI, 54.3, 54.8 forecast, 54.9 previous
- Germany Jul Markit Manufacturing Flash PMI, 57.3, 55.5 forecast, 55.9 previous
- Germany Jul Markit Service Flash PMI, 54.4, 54.3 forecast, 54.5 previous
- Germany Jul Markit Composite Flash PMI, 55.2, 54.7 forecast, 54.8 previous
- France Jul Business Climate Manufacturing 108, 110 forecast, 110 previous
- France Jul Markit Manufacturing Flash PMI, 53.1, 52.4 forecast, 52.5 previous
- France Jul Markit Service Flash PMI, 55.3, 55.7 forecast, 55.9 previous
- France Jul Markit Composite Flash PMI, 54.5, 54.8 forecast, 55.0 previous
- Iran says will respond in kind if U.S. tries to block oil exports
- Europe will not give in to U.S. threats on trade - Germany
- City of London leader sees 3,500-12,000 finance jobs lost from Brexit
- Oil steady as U.S.-Iran row balances trade worries
- Gold inches down on firmer dollar, muted response to US-Iran tension
Economic Data Ahead
- (0900 ET/1300 GMT) The Federal Housing Finance Agency releases its housing price index for the month of May. The index gained 0.1 percent in April.
- (0945 ET/1345 GMT) Financial firm Markit releases U.S. preliminary Manufacturing PMI for the month of July. The index is likely edged up to 55.4 after posting a similar reading 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 56.5 in July after printing a similar reading in May
- (0945 ET/1445 GMT) Financial firm Markit releases preliminary U.S. composite PMI for the month of July. The index posted a final reading of 56.2 in the previous month.
- (1000 ET/1500 GMT) Federal Reserve Bank of Richmond will publish it Manufacturing Index for July. The index rose to 20 in the prior month.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- N/A The EU Economic and Financial Affairs Council meeting - BRUSSELS
- (1130 ET/1530 GMT) Treasury auctions $55 bn 4-week bills (size increased $10 bn)
- (1300 ET/1700 GMT) BEA briefs media on benchmark revisions to U.S. GDP to be released July 27
- (1300 ET/1700 GMT) Treasury auctions $35 bn 2-year notes (size increased $1 bn)
- (1430 ET/1830 GMT) FedTrade operation 30-year Ginnie Mae (max $515 mn)
FX Beat
DXY: The dollar index eased as the yield on the benchmark 10-year Treasuries lost 1-1/2 basis points. The greenback against a basket of currencies trades 0.2 percent down at 94.45, having touched a low of 94.21 on Monday, its lowest since July 11. FxWirePro's Hourly Dollar Strength Index stood at -147.48 (Highly Bearish) by 1000 GMT.
EUR/USD: The euro rose above the 1.1700 handle after data showed activity in Germany's private sector grew faster than expected in July underpinned by strength in the manufacturing sector. However, fears over a trade war with the United States and weaker global expansion dented optimism in Eurozone business growth. The European currency traded 0.1 percent up at 1.1702, having touched a high of 1.1750 the day before, its highest since July 11. FxWirePro's Hourly Euro Strength Index stood at 1.71 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1762 (June 10 High), a break above targets 1.1801 (June 13 High). On the downside, support is seen at 1.1649 (July 12 Low), a break below could drag it till 1.1600.
USD/JPY: The dollar slumped, extending losses for the fifth straight session, as traders expectations dampened about whether the Bank of Japan will launch a fresh round of stimulus at a scheduled two-day policy meeting on July 30-31. The major was trading 0.2 percent down at 111.09, having hit a low of 110.75 the day before, its lowest since July 9. FxWirePro's Hourly Yen Strength Index stood at 100.46 (Highly Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, as U.S. flash Markit manufacturing, service and composite PMI. Immediate resistance is located at 112.10 (21-DMA), a break above targets 112.62 (July 20 High). On the downside, support is seen at 110.75 (July 23 low), a break below could take it lower 110.27 (July 4 Low).
GBP/USD: Sterling gained, reversing most of its previous session losses after the Confederation of British Industry's survey indicated that growth across British factories recovered over the three months to July after a weak start to the year. The major traded 0.3 percent up at 1.3134, having hit a low of 1.2957 on Thursday; it’s lowest since Sept. 2017. FxWirePro's Hourly Sterling Strength Index stood at 39.88 (Neutral) 1000 GMT. Immediate resistance is located at 1.3180 (21-DMA), a break above could take it near 1.3244 (July 12 High). On the downside, support is seen at 1.2957 (July 19 Low), a break below targets 1.2910. Against the euro, the pound was trading 0.1 percent up at 89.17 pence, having hit a low of 89.57 on Friday, it’s lowest since March 7.
USD/CHF: The Swiss franc consolidated within narrow ranges, as the greenback eased across the board following a drop in the U.S. Treasury yields. The major trades flat at 0.9925, having touched a low of 0.9901 the day before, it’s lowest since July 9. FxWirePro's Hourly Swiss Franc Strength Index stood at 69.40 (Bullish) by 1000 GMT. On the higher side, near-term resistance is around 0.9970.and any break above will take the pair to next level till 1.0040. The near-term support is around 0.9884 (July 6 Low) and any close below that level will drag it till 0.9857 (July 9 Low).
Equities Recap
European shares advanced in early deals, boosted by strong results from the banking sector, while the euro gained on better-than-expected preliminary German Markit manufacturing PMI.
The pan-European STOXX 600 index gained 0.9 percent at 388.57 points, while the FTSEurofirst 300 index rallied 0.9 percent to 1,521.11 points.
Britain's FTSE 100 trades 0.8 percent up at 7,719.21 points, while mid-cap FTSE 250 surged 0.6 percent to 20,900.96 points.
Germany's DAX rose 1.5 percent at 12,737.95 points; France's CAC 40 trades 0.9 percent higher at 5,431.69 points.
Commodities Recap
Crude oil prices steadied as growing tension between the United States and Iran highlighted risks to supply while escalating trade disputes raised the prospect of slower economic growth. International benchmark Brent crude was trading 0.4 percent up at $73.22 per barrel by 1011 GMT, having hit a low of $71.19 on Wednesday, its lowest since April 17. U.S. West Texas Intermediate was trading 0.8 percent higher at $68.36 a barrel, after falling as low as $67.08 on Tuesday, its lowest since June 22.
Gold prices rose, reversing early session losses, as investors' reaction to the dispute between the United States and Iran remained muted. Spot gold was 0.2 percent up at $1,226.64 an ounce at 1015 GMT, having hit a low of $1,211.26 on Thursday, its lowest since early July 2017. U.S. gold futures for August delivery were 0.4 percent lower at $1,220.20 an ounce.
Treasuries Recap
The U.S. Treasuries gained as investors wait to watch the country’s 2-year bond auction and the manufacturing PMI for the month of July, both scheduled to be released today by 17:00GMT and 13:45GMT respectively, besides, the coming up of services PMI for the similar period. The yield on the benchmark 10-year Treasuries lost 1-1/2 basis points to 2.94 percent, the super-long 30-year bond yields slumped 2 basis points to 3.08 percent and the yield on the short-term 2-year traded tad lower at 2.62 percent.
The German bunds traded steady after the country’s manufacturing PMI for the month of July, beat market expectations. Investors will now focus on the European Central Bank’s (ECB) monetary policy decision, due to be unveiled on July 26 by 11:45GMT for further direction in the debt market. The German 10-year bond yields, which move inversely to its price, remained tad higher at 0.40 percent, the yield on 30-year note slipped 1 basis point to 1.06 percent and the yield on short-term 3-year steadied at -0.48 percent.
The New Zealand bonds closed Tuesday’s session on a mixed tone as investors are keeping a close eye on the country’s employment report for the second quarter of this year, besides the trade balance for the month of June, both scheduled to be released today by 22:45GMT respectively. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, rose 1-1/2 basis points to 2.85 percent, the yield on the long-term 20-year note slipped 1 basis point to 3.14 percent while the yield on short-term 2-year closed flat at 1.85 percent.
The Japanese government bonds remained mixed amid a muted trading session that witnessed data of little economic significance. The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, hovered around 0.08 percent, the yield on the long-term 30-year surged nearly 2 basis points to 0.93 percent and the yield on short-term 2-year remained tad lower at -0.10 percent.
The Australian government bonds slumped tracking board weakness in the U.S. Treasuries as investors remained optimistic about world’s largest economy and Federal Reserve interest rate hikes. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 4-1/2 basis points to 2.724 percent, the yield on the long-term 30-year Note also jumped 4-1/2 basis points to 3.201 percent and the yield on short-term 2-year up 1 basis point to 2.075 percent.
