Market Roundup
- EUR/USD 0.11%, USD/JPY -0.35%, GBP/USD -0.13%, EUR/GBP 0.10%
- DXY -0.13%, DAX -0.35%, FTSE -0.18%, Brent 1.02%, Gold 0.29%
- Turkey's lira weakens more than 6 pct on threat of more U.S. sanctions
- South Africa's rand slides as lira plunge triggers EM sell-off
- Pressure mounts on Trump to deliver for Iowa ahead of elections
- Euro zone banks see rising loan demand, easing credit standards: ECB
- EZ Jul HICP Final YY, 2.1%, 2.1% forecast, 2.0% previous
- EZ Jul HICP Final MM, -0.3%, -0.3% forecast, 0.1% previous
- EZ Jun Current Account SA, EUR, 23.5 bln, 22.4 bln previous, 24.4 bln revised
- Oil heads for weekly loss on economic growth concerns
- Gold heads for its worst week in more than a year
Economic Data Ahead
- (0830 ET/1230 GMT) The Statistics Canada will report foreign portfolio investment in domestic stocks for the month of June.
- (0830 ET/1230 GMT) The Statistics Canada will release investment in foreign securities figures for the month of June.
- (0830 ET/1230 GMT) The Statistics Canada is expected to report that annual inflation rate remained unchanged at 2.5 percent in July.
- (1000 ET/1400 GMT) The University of Michigan is likely to report that U.S. preliminary consumer sentiment index rose to 98.0 in August, after posting a final reading of 97.9 in July.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index extended prior session losses, as investors remain concerned about volatility in developing markets. The greenback against a basket of currencies trades 0.1 percent down at 96.48, having touched a high of 96.98 on Wednesday, its highest since July 2017. FxWirePro's Hourly Dollar Strength Index stood at 19.11 (Neutral) by 1000 GMT.
EUR/USD: The euro rose, extending gains for the third straight session, after data from the European Central Bank showed eurozone's current account surplus over the past 12 months rose to 3.6 percent of gross domestic product from 3.2 percent in the 12 months to June 2017. The European currency traded 0.05 percent up at 1.1382, having touched a low of 1.1301 on Wednesday, its lowest since July 2017. FxWirePro's Hourly Euro Strength Index stood at -25.95 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1427 (38.2% retracement of 1.1628 and 1.1301), a break above targets 1.1503 (50% retracement). On the downside, support is seen at 1.1300, a break below could drag it till 1.1260.
USD/JPY: The dollar slumped against the Japanese yen as investors remain cautious about the Turkish lira's recovery as well as the latest efforts by the U.S. and China to avoid a trade war. The major was trading 0.3 percent down at 110.52, having hit a high of 111.43 on Wednesday, its highest since August 8. FxWirePro's Hourly Yen Strength Index stood at 174.00 (Highly Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. Michigan Consumer Sentiment index. Immediate resistance is located at 111.37 (61.8% retracement of 112.15 and 110.11), a break above targets 111.87 (August 3 Low). On the downside, support is seen at 110.11 (August 13 Low), a break below could take it lower 109.68 (June 27 Low).
GBP/USD: Sterling eased, hovering towards a near 14-month low as persisting worries about whether Britain can agree on a trade deal with the European Union over the coming months to avoid a hard exit from the bloc continued to weigh on investor sentiment. The major traded 0.05 percent down at 1.2705, having hit a low of 1.2661 on Wednesday; it’s lowest since June. 2017. FxWirePro's Hourly Sterling Strength Index stood at -47.64 (Neutral) 1000 GMT. Immediate resistance is located at 1.2782 (23.6% retracement of 1.3173 and 1.2661), a break above could take it near 1.2857 (38.2% retracement). On the downside, support is seen at 1.2660, a break below targets 1.2610. Against the euro, the pound was trading 0.2 percent down at 89.61 pence, having hit a low of 89.71 earlier, it’s lowest since August 10.
USD/CHF: The Swiss franc edged up as prevailing risk-off market sentiment underpinned safe-haven assets. The major trades 0.05 percent down at 0.9962, having touched a high of 0.9982 on Wednesday, it’s highest since August 6. FxWirePro's Hourly Swiss Franc Strength Index stood at -71.68 (Slightly Bearish) 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 0.9937 (21-DMA) and any close below that level will drag it till 0.9915 (August 3 Low).
Equities Recap
European shares tumbled as the U.S. and China are due to impose tariffs on billions of dollars of each other's goods on Aug. 23 in addition to levies that took effect on July 6.
The pan-European STOXX 600 index plunged 0.4 percent at 380.03 points, while the FTSEurofirst 300 index slumped 0.2 percent to 1,488.73 points.
Britain's FTSE 100 trades 0.2 percent down at 7,544.63 points, while mid-cap FTSE 250 declined 0.3 percent to 20,393.98 points.
Germany's DAX fell 0.4 percent at 12,184.35 points; France's CAC 40 trades 0.3 percent lower at 5,331.34 points.
Commodities Recap
Crude oil prices surged, despite increasing concerns about slowing global economic growth that could hit demand. International benchmark Brent crude was trading 0.6 percent up at $71.75 per barrel by 1013 GMT, having hit a low of $70.28 on Wednesday, its lowest since April 10. U.S. West Texas Intermediate was trading 0.3 percent higher at $65.60 a barrel, after falling as low as $64.45 on Thursday, its lowest since June 21.
Gold prices rebounded after declining to a 19-month low in the previous session; but were on track for its biggest weekly decline since mid-2017. Spot gold was 0.2 percent up at $1,175.72 an ounce by 1016 GMT, having hit a low of $1160.07 on Thursday, its lowest since early January 2017. U.S. gold futures were down 0.2 percent at $1,181.30 an ounce.
Treasuries Recap
The U.S. Treasuries gained in a silent trading session ahead of no economically significant data for the day. The yield on the benchmark 10-year Treasuries slumped nearly 2 basis points to 2.85 percent, the super-long 30-year bond yields also plunged close to 2 basis points to 3.01 percent and the yield on the short-term 2-year traded nearly 1 basis point lower at 2.612 percent.
The German bunds surged during European session after Turkey’s political crisis worsened, with the United States threatening to impose higher economic sanctions if the former refuses to set free a detained American pastor. The German 10-year bond yields, which move inversely to its price, slumped 2-1/2 basis points to 0.29 percent, the yield on 30-year note also plunged 2-1/2 basis points to 0.95 percent while the yield on short-term 2-year traded 2 basis points lower at -0.64 percent.
The New Zealand bonds closed lower, tracking similar movement in the U.S. Treasuries, following hopes of a re-commencement in the trade talks between the United States and China. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, remained tad higher 2.603 percent, the yield on the long-term 20-year note jumped nearly 1-1/2 basis points to 2.92 percent and the yield on short-term 2-year closed nearly flat at 1.71 percent.
The Japanese government bonds remained tad higher on the last trading day of the week in a muted session that witnessed least investor interference amid a slew of geopolitical tensions surrounding China and Turkey with the United States. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped 1/2 basis point to 0.095 percent, the yield on the long-term 30-year note also fell 1/2 basis point to 0.846 percent and the yield on short-term 2-year traded nearly 1-1/2 basis points lower at -0.127 percent.
The Australian government bonds jumped during early Asian session even as risk sentiments among investors rebounded, following expectations of a resumption in trade talks between the United States and China after a series of sour emotions between the two nations. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell nearly 1-1/2 basis points to 2.555 percent, the yield on the long-term 30-year bond also dipped-1/2 basis points to 3.048 percent and the yield on short-term 2-year remained tad lower at 2.003 percent.
