Market Roundup
- EUR/USD 0.02%, USD/JPY 0.46%, GBP/USD 0.08%, EUR/GBP -0.06%
- DXY 0.05%, DAX 0.44%, FTSE 0.65%, Brent 1.46%, Gold 0.21%
- Beijing urges U.S. firms in China to lobby Washington over a trade war
- EU cuts eurozone growth forecast, blames U.S. trade wars
- EZ May Industrial Production MM, 1.3%, 1.2% forecast, -0.9% previous
- EZ May Industrial Production YY, 2.4%, 2.1% forecast, 1.7% previous
- BoE adds systemic buffers to 2018 stress test of banks
- Great Britain Jun RICS Housing Survey, 2, -2 forecast, -3 previous
- Great Britain Jul TR IPSOS PCSI, 50.62, 49.02 previous
- Germany Jun CPI Final MM, 0.1%, 0.1% forecast, 0.1% previous
- Germany Jun CPI Final YY, 2.1%, 2.1% forecast, 2.1% previous
- Germany Jun HICP Final MM, 0.1%, 0.1% forecast, 0.1% previous
- Germany Jun HICP Final MM, 2.1%, 2.1% forecast, 2.1% previous
- Germany Jul TR IPSOS PCSI, 57.67, 56.07 previous
- France Jun CPI (EU Norm) Final MM, 0.0%, 0.1% forecast, 0.5% previous
- France Jun CPI (EU Norm) Final YY, 2.3%, 2.4% forecast, 2.4% previous
- France Jul TR IPSOS PCSI, 42.23, 43.22 previous
Economic Data Ahead
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 6,000 to a seasonally adjusted 225,000 for the week ended Jul. 2, while continuing claims for the week ended Jun. 2 is expected to decline to 1.720 million from a previous reading of 1.739 million.
- (0830 ET/1230 GMT) The U.S. consumer price index likely increased 0.2 percent in June after posting similar gains in May. While in the 12 months through June, the CPI is expected to have risen 2.9 percent. Excluding food and energy, the core CPI probably rose 0.2 percent, matching the gain in the previous month.
- (0830 ET/1230 GMT) The Statistics Canada releases its New Housing Price Index (NHPI) for the month of May. The index rose at an annualized rate of 1.6 percent in April.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending July 2.
- (1300 ET/1700 GMT) The U.S. reports its monthly budget statement for the month of June. The government is likely to show a budget deficit of $98.2 billion after posting a deficit of $147.0 billion in the previous month.
Key Events Ahead
- (1215 ET/1615 GMT) Philadelphia Fed President Patrick Harker speaks before the Global Interdependence Center Tenth Annual Rocky Mountain Economic Summit in Victor, Idaho.
- (2000 ET/0000 GMT) Federal Reserve Bank of Minneapolis President Neel Kashkari takes part in a panel on immigration before the Worthington International Festival.
FX Beat
DXY: The dollar index rose to an over 1-week peak as investors awaited the U.S. CPI figures, which are expected to have risen 2.9 percent year-on-year in June, while core CPI has likely risen to 2.3 percent year-on-year. The greenback against a basket of currencies trades 0.2 percent up at 94.90, having touched a high of 94.93, its highest since July 3. FxWirePro's Hourly Dollar Strength Index stood at 86.89 (Slightly Bullish) by 1000 GMT.
EUR/USD: The euro rose, reversing some of its previous session losses after data from the European statistics office showed production at factories in the eurozone increased by more than expected in May. The economy's industrial production increased by 1.3 percent in May, compared to April, and a 2.4 percent expansion year on year. The European currency traded 0.1 percent up at 1.1677, having touched a high of 1.1790 on Monday, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at 29.77 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1720 (5-DMA), a break above targets 1.1801 (June 13 High),. On the downside, support is seen at 1.1630 (July 4 Low), a break below could drag it till 1.16300.
USD/JPY: The dollar rallied above the 112.00 handle to hit a 6-month peak after Federal Reserve Bank of Cleveland President Loretta Mester stated that U.S. economy can certainly handle two more interest rate increases this year, as long as supported by solid U.S. economic growth, low unemployment, and stable inflation. The major was trading 0.5 percent up at 112.56, having hit a high of 112.57 earlier, its highest since Jan 9. FxWirePro's Hourly Yen Strength Index stood at -154.46 (Highly Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment benefit claims consumer price index, ad monthly budget statement. Immediate resistance is located at 112.60 (Jan 3 High), a break above targets 113.07 (Dec 19 High). On the downside, support is seen at 110.97 (5-DMA), a break below could take it lower 110.28 (July 4 Low).
GBP/USD: Sterling steadied after falling to an early 3-day low, as British Prime Minister Theresa May sets out a blueprint of its core plan for a free trade area for goods that her government has called principled and practical. The major traded 0.05 percent up at 1.3199, having hit a high of 1.3362 on Monday; it’s highest since June 14. FxWirePro's Hourly Sterling Strength Index stood at 109.75 (Highly Bullish) 1000 GMT. Immediate resistance is located at 1.3362 (June 1 High), a break above could take it near 1.3389 (June 13 High). On the downside, support is seen at 1.3170 (July 4 Low), a break below targets 1.3146 (June 20). Against the euro, the pound was trading 0.1 percent down at 88.35 pence, having hit a low of 89.00 pence on Monday, it’s lowest since March 9.
USD/CHF: The Swiss franc slumped to a 3-week low as the greenback rose on growing expectations that the Federal Reserve will hike interest rates two more times this year. The major trades 0.4 percent up at 0.9993, having touched a high of 0.9994 earlier, it’s highest since May 21. FxWirePro's Hourly Swiss Franc Strength Index stood at 15.29 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 1.0018 (May 18 High) and any break above will take the pair to next level till 1.0041 (May 15 High). The near-term support is around 0.9880 and any close below that level will drag it till 0.9855.
Equities Recap
European shares rallied, boosted by gains in the media sector, while the greenback rallied on the back of concern U.S. inflation pressures will pick up, and prompt the Fed to raise interest rates at least twice more this year.
The pan-European STOXX 600 index advanced 0.4 percent at 382.90 points, while the FTSEurofirst 300 index surged 0.6 percent to 1,501.98 points.
Britain's FTSE 100 trades 0.8 percent up at 7,651.56 points, while mid-cap FTSE 250 gained 0.6 percent to 20,755.73 points.
Germany's DAX rose 0.3 percent at 12,456.35 points; France's CAC 40 trades 0.4 percent higher at 5,375.96 points.
Commodities Recap
Crude oil prices rallied, reversing some of its previous session losses after Libya said it would resume oil exports. International benchmark Brent crude was trading 0.6 percent up at $74.51 per barrel by 1025 GMT, having hit a low of $73.08 on Wednesday, its lowest since June 21. U.S. West Texas Intermediate was trading 0.4 percent higher at $70.85 a barrel, after rising as low as $70.41 on Wednesday, its lowest since June 26.
Gold prices rose, snapping two sessions of declines amid worries over the intensifying trade war between the United States and China. Spot gold was 0.2 percent up at $1,244.00 an ounce at 1028 GMT, having touched a high of $1265.79 on Monday, its highest since Jun. 26.U.S. gold futures for August delivery were little changed at $1,244 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.863 percent higher by 0.02 bps, while 5-year yield was 0.029 bps up at 2.769 percent.
The super-long Japanese government bond prices firmed slightly. The 30-year JGB yield fell 0.5 basis point to 0.685 percent. On the other hand, the 10-year JGB yield rose 0.5 basis point to 0.040 percent while the benchmark 10-year JGB futures price was flat at 150.92.
The Australian government bond futures dipped but were still near recent three-month highs. The three-year bond contract was off half a tick at 97.935, while the 10-year contract fell 1.5 ticks to 97.3700. The New Zealand government bonds eased a fraction, sending yields 0.5 basis points higher towards the long end of the curve.
