Economic Data Ahead
- No major economic data releases
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index held between tight ranges as U.S. financial markets are closed on account of Independence Day. The greenback against a basket of currencies traded flat at 96.77, having touched a high of 96.88 on Tuesday, its highest since June 20.
EUR/USD: The euro continued to trade within narrow ranges after European Union leaders’ nomination of Christine Lagarde, the head of the International Monetary Fund, to replace Mario Draghi as president of the ECB reinforced expectations of more monetary policy easing if it’s needed. The European currency traded flat at 1.1285, having touched a low of 1.1268 on Wednesday, its lowest since June 20. Immediate resistance is located at 1.1327 (38.2% retracement of 1.1412 and 1.1275), a break above targets 1.1360 (61.8% retracement). On the downside, support is seen at 1.1251 (June 7 Low), a break below could drag it below 1.1203 (June 17 Low).
USD/JPY: The dollar eased, hovering towards a one-week low hit in the previous session as falling Treasury yields boosted expectations the U.S. Federal Reserve will cut interest rates this month for the first time in a decade. The pair was trading flat at 107.78, having hit a low of 107.53 on Wednesday, its lowest since Jun. 26. Investors’ will continue to track the broad-based market sentiment, as U.S. financial markets are closed for a public holiday. Immediate resistance is located at 108.36 (June 4 High), a break above targets 108.80 (June 11 High). On the downside, support is seen at 107.24 (June 24 Low), a break below could take it lower at 106.78 (June 25 Low).
GBP/USD: Sterling consolidated near a 2-week low amid speculation the Bank of England will abandon its preference to raise interest rates as the trade war and uncertainty about Britain's negotiations to leave the European Union dented the outlook. The major traded flat at 1.2574, having hit a low of 1.2557 on Wednesday, it’s lowest since June 19. Immediate resistance is located at 1.2655 (5-DMA), a break above could take it near 1.2743 (June 5 High). On the downside, support is seen at 1.2542 (June 19 Low), a break below targets 1.2506 (June 18 Low). Against the euro, the pound was trading 0.1 percent down at 89.74 pence, having hit a high of 89.19 on Tuesday, it’s highest since Jun. 25.
USD/CHF: The Swiss franc was struck within a narrow range, as investors awaited Friday’s U.S. non-farm payrolls for June, which is expected to have risen by 160,000, compared with 75,000 in May. The major trades flat at 0.9855, having touched a high of 0.9889 on Tuesday; it’s highest since June 20. On the higher side, near-term resistance is around 0.9920 (June 10 High) and any break above will take the pair to next level till 0.9963 (June 6 High). The near-term support is around 0.9825 (5-DMA), and any close below that level will drag it till 0.0.9795 (10-DMA).
Equities Recap
European shares advanced on bets the U.S. Federal Reserve would cut interest rates this month and that other major central banks would embrace looser monetary policy.
The pan-European STOXX 600 index surged 0.05 percent at 392.70 points, while the FTSEurofirst 300 gained 0.05 percent to 1,545.62 points.
Britain's FTSE 100 trades 0.1 percent up at 7,618.49 points, while mid-cap FTSE 250 rallied 0.1 to 19,809.21 points.
Germany's DAX rose 0.1 percent at 12,628.07 points; France's CAC 40 trades 0.2 percent lower at 5,617.72 points.
Commodities Recap
Crude oil prices declined, weighed down by data showing a smaller-than-expected decline in U.S. crude stockpiles and worries about the global economy. International benchmark Brent crude was trading 0.2 percent lower at $63.74 per barrel by 0911 GMT, having hit a low of $62.06 on Wednesday, its lowest since June 19. U.S. West Texas Intermediate was trading 0.5 percent down at $57.11 a barrel, after falling as low as $56.03 on Wednesday, its lowest since the June 20.
Gold prices edged lower due to an uptick in the stock markets, while investors awiated U.S. non-farm payrolls data for more cues on Federal Reserve’s stance on rate cuts .Spot gold was trading 0.2 percent lower at $1,415.17 per ounce by 0925 GMT, having touched a high of $1,437.66 on Wednesday, its highest since June 25. U.S. gold futures were down 0.3 perent to $1,416.9 an ounce.
Treasuries Recap
The German bunds gained during European session after eurozone’s retail sales for the month of May, missed market expectations and also contracting from the reading in April. The German 10-year bond yields, which move inversely to its price, slumped nearly 2 basis points to -0.402 percent, the yield on 30-year note suffered 1-1/2 basis points to 0.191 percent and the yield on short-term 2-year remained tad lower at -0.756 percent.
The Japanese government bonds closed flat amid a successful super-long 30-year auction that drew ample demand from investors ahead of the country’s household spending data for the month of May, due today by 23:30GMT. At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around -0.153 percent, the yield on the long-term 30-year flat at 0.344 percent and the yield on short-term 2-year also steadied at -0.216 percent
The Australian government bonds remained slightly lower amid a muted trading session that witnessed data of little economic significance. Also, the country’s retail sales for the month of May came in tad up from that in April, which barely created an impact on the debt market. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, remained tad higher at 1.296 percent, the yield on the long-term 30-year bond rose nearly 1 basis point to 1.948 percent and the yield on short-term 2-year traded nearly 1-1/2 basis points higher at 0.948 percent.
