Market Roundup
- EUR/USD -0.23%, USD/JPY 0.18%, GBP/USD -0.51%, EUR/GBP 0.24%
- DXY 0.28%, DAX 0.26%, FTSE 0.30%, Brent 1.08%, Gold -0.29%
- Germany Jun Industrial Orders MM, -4.0%, -0.4% forecast, 2.6% previous
- China's stocks, yuan slide as Beijing, Washington step up trade threats, rhetoric
- Sterling falls as dollar rebounds, UK minister says no-deal Brexit likely
- Turkish lira hits record low after U.S. says reviewing duty-free access
- Trump's trade 'extortion' won't work, China state media says
- IMF says German trade surplus contributes to trade tension
- N.Korea urges U.S. to drop sanctions as Seoul probes illicit coal shipments
- EZ Aug Sentix Index, 14.7, 13.5 forecast, 12.1 previous
- White House to detail implementation of new Iran sanctions Monday -Pompeo
Economic Data Ahead
- (1000 ET/1400 GMT) US Jul Employment Trends, 108.9 previous
- N/A The Federal Reserve releases its Loan Officer Survey.
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index surged to a 2-week peak as markets expect a further increase in U.S. Treasury yields following last week's strong U.S. job data. The greenback against a basket of currencies trades 0.4 percent up at 95.50, having touched a high of 95.51 earlier, its highest since July 19. FxWirePro's Hourly Dollar Strength Index stood at 1.34 (Neutral) by 1000 GMT.
EUR/USD: The euro tumbled to an over 5-week low after data showed German industrial orders fell more than expected in June, indicating that trade tensions caused by U.S. President Donald Trump might dent growth in Europe's largest economy. The European currency traded 0.2 percent down at 1.1541, having touched a low of 1.1540 earlier, its lowest since June 28. FxWirePro's Hourly Euro Strength Index stood at -47.81 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1600, a break above targets 1.1633 (June 21 High). On the downside, support is seen at 1.1530 (June 19 Low), a break below could drag it till 1.1508 (June 21 Low).
USD/JPY: The dollar rose, halting a 3-day losing streak as Friday's U.S. jobs data broadly indicated a strong economy, underpinning expectations the Federal Reserve will gradually hike interest rates this year. The major was trading 0.2 percent up at 111.46, having hit a high of 112.15 on Wednesday, its highest since July 20. FxWirePro's Hourly Yen Strength Index stood at 31.79 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. Q4 Loan Officer Survey. Immediate resistance is located at 111.63 (21-DMA), a break above targets 112.17 (July 11 High). On the downside, support is seen at 110.96 (July 24 Low), a break below could take it lower 110.59 (July 26 Low).
GBP/USD: Sterling tumbled to a fresh 11-month low as comments by officials about Brexit fuelled concerns that Britain could soon separate from the European Union without securing a trade agreement. The UK government has less than eight months to agree on a divorce deal with Brussels before it quits the EU. The major traded 0.5 percent down at 1.2939, having hit a low of 1.2932 earlier; it’s lowest since Sept 2017. FxWirePro's Hourly Sterling Strength Index stood at -113.66 (Highly Bearish) 1000 GMT. Immediate resistance is located at 1.3083 (July 19 High), a break above could take it near 1.3103 (10-DMA). On the downside, support is seen at 1.2852 (Aug 31, 2017, Low), a break below targets 1.2800. Against the euro, the pound was trading 0.3 percent down at 89.16 pence, having hit a high of 88.55 on Thursday, it’s highest since July 17.
USD/CHF: The Swiss franc fell to an over 2-week low as the greenback gained on expectations the Federal Reserve will gradually hike interest rates this year. The major trades 0.4 percent up at 0.9977, having touched a high of 0.9979 earlier, it’s highest since July 20. FxWirePro's Hourly Swiss Franc Strength Index stood at 50.03 (Bullish) by 1000 GMT. On the higher side, near-term resistance is around 1.0010 (July 20 High) and any break above will take the pair to next level till 1.0043 (July 19 High). The near-term support is around 0.9925 (10-DMA) and any close below that level will drag it till 0.9897 (August 1 Low).
Equities Recap
European shares gained, reversing early session losses, while sterling slumped to multi-month lows after UK minister stated that Britain likely to leave the EU without agreeing on a deal.
The pan-European STOXX 600 index rallied 0.2 percent at 389.76 points, while the FTSEurofirst 300 index surged 0.2 percent to 1,526.44 points.
Britain's FTSE 100 trades 0.3 percent up at 7,678.22 points, while mid-cap FTSE 250 rose 0.2 percent to 20,674.88 points.
Germany's DAX rose 0.3 percent at 12,657.70 points; France's CAC 40 trades 0.3 percent higher at 5,493.79 points.
Commodities Recap
Crude oil prices rose by more than 1-percent after Saudi crude production registered an unexpected decline in July and U.S. drilling appeared to slow down. International benchmark Brent crude was trading 1.0 percent up at $73.99 per barrel by 1028 GMT, having hit a low of $71.81 on Thursday, its lowest since July 19. U.S. West Texas Intermediate was trading 1.3 percent higher at $69.47 a barrel, after falling as low as $66.95 on Thursday, its lowest since June 22.
Gold prices eased, reversing early session gains amid a firm U.S. dollar on expectations of gradual rate hikes by the Federal Reserve. Spot gold was 0.2 percent down at $1,210.39 an ounce by 1032 GMT, after hitting its lowest since July 2017 at $1,204.36 on Friday. U.S. gold futures were down 0.2 percent at $1,221.4 an ounce.
Treasuries Recap
The U.S. 10-year Treasuries remained flat in a muted trading session that witnessed data of least economic significance. The yield on the benchmark 10-year Treasuries remained flat at 2.95 percent, the super-long 30-year bond yields hovered around 3.08 percent and the yield on the short-term 2-year traded nearly 1 basis point higher at 2.65 percent.
The United Kingdom’s gilt prices remained tad higher during European session as investors wait to watch the country’s 10-year auction, scheduled to be held on August 8 by 09:40GMT. The yield on the benchmark 10-year gilts, slid nearly 1 basis point to 1.32 percent, the super-long 30-year bond yields also fell close to 1 basis point to 1.76 percent and the yield on the short-term 2-year too traded nearly 1 basis point lower at 0.74 percent.
The New Zealand bonds closed flat as investors wait to watch the country’s GlobalDairyTrade (GDT) price auction and the Reserve Bank of New Zealand’s (RBNZ) monetary policy meeting, which will most likely be non-eventful, scheduled to be held on August 7 and August 8 respectively. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slipped 1/2 basis point to 2.79 percent, the yield on the long-term 20-year note hovered around 3.11 percent while the yield on short-term 2-year also closed nearly flat at 1.81 percent.
The Japanese government bonds remained nearly flat as investors wait to watch the country’s household spending for the month of June and the second-quarter gross domestic product (GDP), scheduled to be released today and on August 9 by 23:30GMT and 23:50GMT respectively. The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, hovered around 0.10 percent, the yield on the long-term 30-year flat at 0.84 percent while the yield on short-term 2-year traded tad lower at -0.11 percent.
The Australian government bonds gained across the board on the first trading day after China retaliated with $60 billion tariffs on U.S. imported goods, injecting more fear about a full-fledged trade war between the world’s two major economies. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell nearly 4 basis points to 2.693 percent, the yield on the long-term 30-year Note also dipped 3-1/2 basis points to 3.175 percent and the yield on short-term 2-year slumped nearly 2 basis points to 2.041 percent.
