Market Roundup
- EUR/USD -0.38%, USD/JPY -0.19%, GBP/USD -0.35%, EUR/GBP -0.06%
- DXY 0.35%, DAX -1.76%, FTSE -1.07%, Brent -0.35%, Gold 0.06%
- BOJ Deputy Gov says no fixed timeframe for keeping rates low
- China commerce ministry: China is fully confident to achieve high-quality economic growth target
- China commerce ministry: U.S. tactics on China will have no effect
- U.S.-China trade dispute hitting German companies - DIHK
- EZ Jun Producer Prices YY, 3.6%, 3.5% forecast, 3.0% previous
- Great Britain Jul Markit/CIPS Construction PMI, 55.8, 52.8 forecast, 53.1 previous
Economic Data Ahead
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 3,000 to a seasonally adjusted 220,000 for the week ended Jul. 27, while continuing claims for the week ended Jul. 20 is expected to rise to 1.750 million from a previous reading of 1.045 million.
- (0945 ET/1345 GMT) The NAPM-New York releases ISM-New York Index- Business conditions for the month of July. The index stood at 55 in the previous month.
- (1000 ET/1400 GMT) The United States is likely to report that factory orders increased 0.7 percent in June after posting a rise of 0.4 percent in the prior month.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending July 27.
Key Events Ahead
- No Significant Event Scheduled
FX Beat
DXY: The dollar index rallied to a near 2-week peak after the Federal Reserve characterized the economy as strong, keeping the central bank on course to increase interest rate in September and likely again at the end of 2018. The greenback against a basket of currencies trades 0.3 percent up at 94.93, having touched a high of 95.01 earlier, its highest since July 20. FxWirePro's Hourly Dollar Strength Index stood at 94.24 (Slightly Bullish) by 1000 GMT.
EUR/USD: The euro slumped to a 2-week low as the greenback surged after the Federal Reserve provided an upbeat assessment of the U.S. economic growth and the job market. Moreover, renewed US-China trade dispute undermined the positive sentiment around the major. The European currency traded 0.3 percent down at 1.1619, having touched a low of 1.1607 earlier, its lowest since July 19. FxWirePro's Hourly Euro Strength Index stood at -107.78 (Highly Bearish) by 1000 GMT. Immediate resistance is located at 1.1687 (21-DMA), a break above targets 1.1762 (June 10 High). On the downside, support is seen at 1.1600 a break below could drag it till 1.1575 (July 19 Low).
USD/JPY: The dollar tumbled after rising to an over 1-week peak in the previous session as renewed trade tensions between the United States and China boosted demand for the safe-haven Japanese yen. On Wednesday, the U.S. administration officials stated that President Donald Trump is proposing a 25 percent tariff on $200 billion worth of Chinese imports, rattling global financial markets. The major was trading 0.2 percent down at 111.49, having hit a high of 112.15 the day before, its highest since July 20. FxWirePro's Hourly Yen Strength Index stood at 79.04 (Slightly Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. unemployment benefit claims and factory orders. 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 111.36 (5-DMA), a break below could take it lower 111.00.
GBP/USD: Sterling trimmed losses after the Bank of England policymakers raised interest rates to 0.75 percent from 0.50 percent, but signalled it was in no hurry to hike them further ahead of an uncertain Brexit. The central bank estimated the inflation in two years' time likely to be 2.09 percent, above the BoE's 2 percent target. The major traded 0.2 percent down at 1.3107, having hit a low of 1.3067 earlier; it’s lowest since July 20. FxWirePro's Hourly Sterling Strength Index stood at -8.32 (Neutral) 1000 GMT. Immediate resistance is located at 1.3166 (21-DMA), a break above could take it near 1.3244 (July 12 High). On the downside, support is seen at 1.3049 (June 28 Low), a break below targets 1.3010 (July 18 Low). Against the euro, the pound was trading 0.2 percent up at 88.63 pence, having hit a high of 88.54 earlier, it’s highest since July 17.
USD/CHF: The Swiss franc eased, extending losses for the third straight session, as the greenback gained after the Federal Reserve provided an upbeat assessment of the U.S. economy. The major trades 0.2 percent up at 0.9938, having touched a low of 0.9867 on Tuesday, it’s lowest since July 9. FxWirePro's Hourly Swiss Franc Strength Index stood at 99.32 (Slightly Bullish) 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 0.9897 (August 1 Low) and any close below that level will drag it till 0.9867 (July 31 Low)
Equities Recap
European shares tumbled amid growing anxieties over trade tensions after President Donald Trump threatened to increase U.S. tariffs on Chinese imports.
The pan-European STOXX 600 index plunged 0.9 percent at 386.39 points, while the FTSEurofirst 300 index declined 0.9 percent to 1,512.48 points.
Britain's FTSE 100 trades 1.3 percent down at 7,551.17 points, while mid-cap FTSE 250 eased 0.9 percent to 20,604.27 points.
Germany's DAX fell 1.6 percent at 12,523.83 points; France's CAC 40 trades 0.8 percent lower at 5,453.93 points.
Commodities Recap
Crude oil prices declined to multi-week lows as an unexpected increase in U.S. crude inventories and renewed concerns over trade tension between the U.S. and China dented market sentiment. International benchmark Brent crude was trading 0.8 percent down at $71.89 per barrel by 1021 GMT, having hit a high of $75.58 on Tuesday, its highest since July 13. U.S. West Texas Intermediate was trading 1.2 percent lower at $67.00 a barrel, after rising as high as $70.41 on Monday, its highest since July 16.
Gold prices steadied, recovering from the previous session's decline as a weaker dollar versus the Japanese yen supported the safe-haven metal. Spot gold was 0.05 percent up at $1,216.18 an ounce by 1024 GMT, having hit a low of $1,213.88 on Tuesday, its lowest since July 19. U.S. gold futures were little changed at $1,226.70 an ounce.
Treasuries Recap
The U.S. 10-year Treasury yield retreated from the 3 percent mark reached in the overnight trading session, but remained on the downside during Thursday’s session, despite a hawkish outlook from the Federal Open Market Committee (FOMC) in its latest monetary policy meeting. The yield on the benchmark 10-year Treasuries slumped 2-1/2 basis points to 2.97 percent, the super-long 30-year bond yields also plunged nearly 2-1/2 basis points to 3.10 percent and the yield on the short-term 2-year traded close to 1-1/2 basis points lower at 2.67 percent
The United Kingdom’s gilt prices remained mixed during European session after the Bank of England (BoE) adopted a hike in its benchmark interest rate by a 9-0 vote to 0.75 percent, from previous 0.50 percent, compared to expectations of a 7-2 vote. The yield on the benchmark 10-year gilts, slipped nearly 1 basis point to 1.37 percent, the super-long 30-year bond yields slumped 1-1/2 basis points to 1.78 percent and the yield on the short-term 2-year traded flat at 0.79 percent.
The Japanese government bonds remained mixed in a muted trading day ahead of the Bank of Japan’s (BoJ) June monetary policy meeting minutes, scheduled to be released today by 23:50GMT. The yield on Japan’s benchmark 10-year bond, which moves inversely to its price, rose nearly 1 basis point to 0.13 percent, the yield on the long-term 30-year jumped 2 basis points to 0.82 percent while the yield on short-term 2-year fell nearly 1-1/2 basis points to -0.09 percent.
The Australian government bonds plunged across the board after the Federal Open Market Committee’s (FOMC) kept its bias towards further policy tightening, while keeping the fed funds rate target unchanged at 1.75-2 percent. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 3-1/2 basis points to 2.744 percent, the yield on the long-term 30-year Note also jumped 4 basis points to 3.224 percent and the yield on short-term 2-year traded rose 1/2 basis point to 2.055 percent.
