Market Roundup
- EUR/USD 0.31%, USD/JPY -0.21%, GBP/USD 0.19%, EUR/GBP 0.16%
- DXY -0.26%, DAX 0.90%, FTSE 0.61%, Brent 1.21%, Gold 0.72%
- Germany Jun Industrial Output MM, -0.9%, -0.5% forecast, 2.6% previous, 2.4% revised
- Germany Jun Trade Balance (EUR) SA, 19.3 bln, 20.3 bln forecast, 20.3 bln previous, 20.4 bln revised
- Great Britain Jul Halifax House Prices MM, 1.4%, 0.20% forecast, 0.30% previous, 0.90% revised
- Great Britain Jul Halifax House Price 3M/YY, 3.3%, 2.7% forecast, 1.80% previous
- In England's forgotten 'rust belt', voters show little sign of Brexit regret
- Trump says anyone trading with Iran will not trade with US
- Chinese newspaper mocks Trump's claim of winning trade war as 'wishful thinking'
- China July FX reserves rise to $3.118 trln despite trade tensions
- Star witness to take stand for second day in Manafort trial
Economic Data Ahead
- (1000 ET/1400 GMT) The U.S. Labor Department releases Job Openings and Labor Turnover Survey (JOLTS) report for the month of June. The report is expected to show job openings rose to 6.646 million from 6.638 million in May
- (1000 ET/1400 GMT) The Investor's Business Daily (IBD)/ TechnoMetrica Institute of Policy and Politics (TIPP) will release U.S. Economic Optimism index for the month of August. The indicator rose to 56.4 in July.
- (1000 ET/1400 GMT) The Richard Ivey School of Business releases Canada's seasonally adjusted Ivey Purchasing Managers Index for the month of July. The index posted a reading of 63.1 in the prior month.
- (1500 ET/1900 GMT) The U.S. Federal Reserve is likely to report that consumer credit rose to $15.25 billion in June, lower than $24.56 billion the month before.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
Key Events
- No Significant Event Scheduled
FX Beat
DXY: The dollar index declined, ahead of U.S. JOLTS Job Openings and IBD/TIPP Economic Optimism. The greenback against a basket of currencies trades 0.3 percent down at 95.08, having touched a high of 95.52 on Monday, its highest since July 19. FxWirePro's Hourly Dollar Strength Index stood at 9.79 (Neutral) by 1000 GMT.
EUR/USD: The euro rebounded from a near 6-week low as the greenback eased amid escalating trade war concerns between the United States and its trading partners. Moreover, data showing German industrial output rose by 0.4 percent for the quarter as a whole, suggested that manufacturing contributed to an expected acceleration in gross domestic product growth during the April-June period. The European currency traded 0.3 percent up at 1.1589, having touched a low of 1.1530 the day before, its lowest since June 28. FxWirePro's Hourly Euro Strength Index stood at -28.25 (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 1.1540 (August 6 Low), a break below could drag it till 1.1508 (June 21 Low).
USD/JPY: The dollar tumbled, reversing most of its previous session gains, as China's threat to impose tariffs on $60 billion of U.S. goods if the White House implemented the newly proposed levies on Chinese products triggered risk-off sentiment. The major was trading 0.1 percent down at 111.20, having hit a high of 112.15 last week, its highest since July 20. FxWirePro's Hourly Yen Strength Index stood at 149.90 (Highly Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. JOLTS Job Opening. Immediate resistance is located at 111.67 (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 retreated from an 11-month low hit in the previous session, as British house prices rose in July, despite other signs of softness in the market. The economy's house prices surged 1.4 percent after a 0.9 percent rise in June, while house prices were 3.3 percent higher than a year ago, the fastest rate of growth since November. The major traded 0.2 percent up at 1.2939, having hit a low of 1.2920 on Monday; it’s lowest since Sept. 2017. FxWirePro's Hourly Sterling Strength Index stood at -103.36 (Highly Bearish) 1000 GMT. Immediate resistance is located at 1.3040 (5-DMA), a break above could take it near 1.3083 (July 19 High). On the downside, support is seen at 1.2920 (Aug. 6 Low), a break below targets 1.2900. Against the euro, the pound was trading 0.2 percent down at 89.43 pence, having hit a low of 89.45 earlier, it’s lowest since July 20.
USD/CHF: The Swiss franc edged up, hovering away from an over 2-week low hit in the previous session, as the greenback eased amid simmering worries over the U.S.-China trade conflict. The major trades 0.2 percent down at 0.9946, having touched a high of 0.9984 on Monday, it’s highest since July 20. FxWirePro's Hourly Swiss Franc Strength Index stood at -58.60 (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 0.9929 (10-DMA) and any close below that level will drag it till 0.9897 (August 1 Low).
Equities Recap
European shares rebounded following gains in the banks and autos sectors, while the euro rose from near 6-week lows on upbeat German industrial output.
The pan-European STOXX 600 index rallied 0.5 percent at 390.73 points, while the FTSEurofirst 300 index surged 0.6 percent to 1,530.69 points.
Britain's FTSE 100 trades 0.7 percent up at 7,720.72 points, while mid-cap FTSE 250 rose 0.3 percent to 20,691.03 points.
Germany's DAX rose 0.8 percent at 12,708.12 points; France's CAC 40 trades 0.7 percent higher at 5,516.01 points.
Commodities Recap
Crude oil prices rallied over 1-percent to hit a 1-week peak as revived U.S. sanctions against major crude exporter Iran are likely to tighten global supply. International benchmark Brent crude was trading 1.4 percent up at $74.66 per barrel by 1016 GMT, having hit a low of $71.81 on Thursday, its lowest since July 19. U.S. West Texas Intermediate was trading 1.1 percent higher at $69.60 a barrel, after falling as low as $66.95 on Thursday, its lowest since June 22.
Gold prices surged, reversing most of its previous session losses, supported by a weaker U.S. dollar. Spot gold was 0.6 percent up at $1,214.86 an ounce at 1022 GMT, having hit its lowest since July 2017 at $1,204.06 on Friday. U.S. gold futures were flat at $1,217.6 an ounce.
Treasuries Recap
The U.S. 10-year Treasuries remained on the downside ahead of JOLTs job openings data for the month of June and the 3-year Note auction scheduled to be held today by 19:30GMT and 22:30GMT for added direction in the debt market. The yield on the benchmark 10-year Treasuries rose nearly 1-1/2 basis points to 2.95 percent, the super-long 30-year bond yields climbed a tad over 1 basis point to 3.09 percent and the yield on the short-term 2-year too traded nearly 1-1/2 basis points higher at 2.66 percent.
The German bunds disappointed during European session as investors have largely shrugged-off the lower-than-expected industrial production and trade balance data for the month of June amid an otherwise, silent trading session. The German 10-year bond yields, which move inversely to its price, rose 1 basis point to 0.40 percent, the yield on 30-year note also climbed 1 basis point to 1.04 percent and the yield on short-term 2-year traded flat at -0.57 percent.
The New Zealand bonds closed on the upside as global trade war tensions re-started with China re-imposing trade tariffs on the United States and the latter repeating sanctions on Iran ahead of the Reserve Bank of New Zealand’s (RBNZ) monetary policy meeting, which will most likely be non-eventful, scheduled to be held on August 8. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, plunged 3 basis points to 2.77 percent, the yield on the long-term 20-year note slumped 2-1/2 basis points to 3.08 percent and the yield on short-term 2-year closed 1-1/2 basis points lower at 1.80 percent.
The Japanese government bonds slumped across the curve after household spending and wages data came better than expected for the month of June. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose 1 basis point lower at 0.114 percent, the yield on the long-term 30-year note also jumped 1 basis point to 0.856 percent and the yield on short-term 2-year moved 1 basis point up to -0.103 percent.
The Australian government bonds gained across the board after the Reserve Bank of Australia (RBA) remained on hold in its August monetary policy meeting, held early today, while remaining slightly dovish on the country’s inflation outlook. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, plunged 5-1/2 basis points to 2.67 percent, the yield on the long-term 30-year Note also slumped 5-1/2 basis points to 3.15 percent and the yield on short-term 2-year traded nearly 2-1/2 basis points lower 2.035 percent.
