Market Roundup
- EUR/USD -0.07%, USD/JPY 0.03%, GBP/USD -0.1%, EUR/GBP flat
- DXY 0.09%, DAX 0.5%, FTSE 0.54%, Brent -0.19%, Gold flat
- Strong U.S. job growth expected in July, tariffs yet to bite
- EZ Jun Markit Comp Final PMI, 54.3, 54.3 forecast, 54.3 previous
- EZ Jun Retail Sales YY, X, 1.4% forecast, 1.4% previous
- Germany Jul Markit Comp Final PMI, 55.0, 55.2 forecast, 55.2 previous
- France Jul Markit Serv PMI, 54.9, 55.3 forecast, 55.3 previous
- Italy Jun Industrial Output YY WDA, 1.7%, 1.5% forecast, 2.1% previous
- Great Britain Jul Markit/CIPS Serv PMI, 53.5, 54.7 forecast, 55.1 previous
- China says it wants to resolve differences with U.S. "on equal footing"
- BoE's Carney sees "uncomfortably high" risk of no-deal Brexit
- China state banks seen selling dollars to arrest sharp yuan losses - traders
- China says it seeks more ways to support economy amid uncertainties
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Labor Department releases nonfarm payrolls report for the month of July. The report is likely to show 190,000 jobs were added compared with an increase of 213,000 in June.
- (0830 ET/1230 GMT) The U.S. Bureau of Labor Statistics will release labor force participation rate for the month of July. The rate stood at 62.9 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Labor Department is expected to report that unemployment rate eased to 3.9 percent in July from 4.0 percent in June.
- (0830 ET/1230 GMT) The United States' average hourly earnings are likely to rise 0.3 percent in July after climbing 0.2 percent in the month before.
- (0830 ET/1230 GMT) The United States releases trade balance figures for the month of June. The economy's trade deficit is expected to have widened to $46.5 billion from 43.1 billion in May.
- (0830 ET/1230 GMT) The Statistics Canada is likely to report that international trade deficit narrowed to C$2.30 billion in June from C$2.77 billion in May.
- (0945 ET/1345 GMT) Financial firm Markit releases final U.S. composite PMI for the month of July. The index posted a final reading of 55.9 in the previous month.
- (0945 ET/1345 GMT) Markit Economics reports final U.S. services PMI for the month of July. The index posted a final reading of 56.2 in June.
- (1000 ET/1400 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. non-manufacturing Purchasing Managers' index eased to a final reading of 58.6 in July from 59.1 in June.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- N/A Federal Reserve Bank of New York Executive Vice President Simon Potter speaks on monetary policy implementation before the 23rd Executives' Meeting of East Asia-Pacific Central Banks (EMEAP) Governors' Meeting, in Manila, Philippines.
FX Beat
DXY: The dollar index retreated from a 2-week peak as investors fear retaliation from China over the proposed tariffs on Chinese imports by the Trump administration. The greenback against a basket of currencies trades 0.1 percent down at 95.09, having touched a high of 95.37 earlier, its highest since July 19. FxWirePro's Hourly Dollar Strength Index stood at 101.33 (Highly Bullish) by 1000 GMT.
EUR/USD: The euro slumped to a 5-week low as the greenback hit 2-week peak ahead of the U.S. non-farm payrolls and wage growth number. The data is expected show that the U.S. economy created 190K jobs in July compared to 213K jobs created in June, while average hourly earnings are seen rising 0.3 percent month-on-month in July, up from the 0.2 percent rise in June. The European currency traded 0.1 percent down at 1.1576, having touched a low of 1.1561, its lowest since June 29. FxWirePro's Hourly Euro Strength Index stood at -126.77 (Highly Bearish) by 1000 GMT. Immediate resistance is located at 1.1633 (June 21 High), a break above targets 1.1690 (June 29 High). On the downside, support is seen at 1.1558 (June 29 Low), a break below could drag it till 1.1508 (June 21 Low).
USD/JPY: The dollar consolidated within narrow ranges after China vowed to retaliate if U.S. President Donald Trump acted on a threat to increase tariffs to 25 percent from 10 percent on $200 billion in Chinese imports. The major was trading 0.05 percent up at 111.69, having hit a high of 112.15 on Tuesday, its highest since July 20. FxWirePro's Hourly Yen Strength Index stood at 58.90 (Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. non-farm payrolls, unemployment rate, trade balance, and service PMI by both Markit and ISM. Immediate resistance is located at 112.17 (July 11 High), a break above targets 112.56 (July 16 High). On the downside, support is seen at 111.34 (10-DMA), a break below could take it lower 111.00.
GBP/USD: Sterling slumped to a 2-week low below the 1.3000 handle after growth in British services companies slowed in July by more than expected, raising doubts about the Bank of England's decision to hike interest rates before Brexit. The major traded 0.1 percent down at 1.3003, having hit a low of 1.2975 earlier; it’s lowest since July 19. FxWirePro's Hourly Sterling Strength Index stood at 24.47 (Neutral) 1000 GMT. Immediate resistance is located at 1.3083 (July 19 High), a break above could take it near 1.3116 (10-DMA). On the downside, support is seen at 1.2957 (July 19 Low), a break below targets 1.2925. Against the euro, the pound was trading flat at 89.03 pence, having hit a high of 88.55 on Thursday, it’s lowest since July 17.
USD/CHF: The Swiss franc edged up, benefiting from turbulence caused by escalating U.S.-China trade tensions. The major trades 0.1 percent down at 0.9946, having touched a high of 0.9965 earlier, it’s highest since July 27. FxWirePro's Hourly Swiss Franc Strength Index stood at 27.49 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9978 (July 27 High) and any break above will take the pair to next level till 1.0010 (July 20 High). The near-term support is around 0.9923 (10-DMA) and any close below that level will drag it till 0.9897 (August 1 Low).
Equities Recap
European shares advanced, boosted by gains in tech stocks, while the greenback retreated from recent peaks ahead of the U.S. jobs report.
The pan-European STOXX 600 index rallied 0.5 percent at 388.65 points, while the FTSEurofirst 300 index surged 0.5 percent to 1,522.05 points.
Britain's FTSE 100 trades 0.7 percent up at 7,626.57 points, while mid-cap FTSE 250 rose 0.5 percent to 20,656.81 points.
Germany's DAX rose 0.5 percent at 12,607.63 points; France's CAC 40 trades 0.3 percent higher at 5,476.56 points.
Commodities Recap
Crude oil prices steadied after falling to multi-week lows in the prior session, as U.S. crude inventories declined to their lowest in nearly four years. International benchmark Brent crude was trading 0.05 percent up at $73.38 per barrel by 1015 GMT, having hit a low of $71.81 on Thursday, its lowest since July 19. U.S. West Texas Intermediate was trading 0.1 percent lower at $68.90 a barrel, after falling as low as $66.95 on Thursday, its lowest since June 22.
Gold prices held gains after falling to their lowest in over a year amid a resilient U.S. dollar. Spot gold was trading 0.05 percent up at $1,208.23 an ounce at 1022 GMT, after easing to the lowest since July 2017 at $1,204.36. and were headed for a fourth straight weekly loss. U.S. gold futures were 0.5 percent lower at $1,214.10 an ounce on Friday.
Treasuries Recap
The U.S. Treasuries gained as investors hope to see a fall in the country’s non-farm payrolls for the month of July, while the unemployment rate is expected to fall, which might cap further rise in bond prices. The yield on the benchmark 10-year Treasuries slipped 1 basis point to 2.97 percent, the super-long 30-year bond yields fell nearly 1-1/2 basis points to 3.10 percent and the yield on the short-term 2-year traded tad lower at 2.66 percent.
The German bunds rallied during European session after the country’s services PMI for the month of July missed market expectations, while eurozone’s retail sales for June remained unchanged, albeit failing to cheer investors. The German 10-year bond yields, which move inversely to its price, slumped nearly 3 basis points to 0.43 percent, the yield on 30-year note plunged 2-1/2 basis points to 1.08 percent and the yield on short-term 3-year too remained nearly 2-1/2 basis points higher at -0.59 percent.
The New Zealand government bonds ended Friday’s session on a higher note amid a silent trading day that witnessed data of little economic significance. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, remained flat at 2.82 percent, the yield on the long-term 20-year note also fell nearly 1-1/2 basis points to 3.13 percent and the yield on short-term 2-year closed nearly 2 basis points lower at 1.84 percent
The Japanese benchmark 10-year JGB yield declined on the last trading day after the Bank of Japan bought bonds in its scheduled market operation. The yield on the benchmark 10-year JGB note, which moves inversely to its price, fell 1 basis point to 0.112 percent, and the yield on short-term 2-year also moved 1 basis point lower to -0.107 percent, while the yield on the long-term 30-year note rose 1-1/2 basis points to 0.847 percent.
The Australian government bonds remained flat on the last trading day of the week after the country’s retail sales for the month of June remained unchanged, albeit topping market expectations. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, hovered around 2.73 percent, the yield on the long-term 30-year Note remained flat at 3.20 percent and the yield on short-term 2-year remained tad lower at 2.05 percent.
