Market Roundup
• US Redbook (YoY) 5.7% forecast, 4.9% previous
• US Redbook (MoM) -1.4% previous, -1.7% previous
• US Jun House Price Index (MoM) 0.2 %,0.2% forecast, 0.2% previous
• US Jun House Price Index (YoY) 4.8 %, 5.8% previous
• US House Price Index 275.6, 275.2 previous
• US Jun S&P/CS HPI Composite - 20 s.a. (MoM) 0.0%,0.2% forecast, 0.1% previous
• US Jun S&P/CS HPI Composite - 20 n.s.a. (YoY ) 2.1%,2.5% forecast, 2.4% previous
• US Jun S&P/CS HPI Composite - 20 n.s.a. (MoM) 0.3%,0.6% previous
• US Aug CB Consumer Confidence 135.1, 129.5 forecast, 135.8 previous
• US Aug Richmond Manufacturing Index 1, -4 forecast, 12 previous
• US Aug Dallas Fed Services Revenues 7.8 ,20.9 previous
• US Aug Texas Services Sector Outlook 0.2, 4.7 previous
Looking Ahead - Economic Data (GMT)
• 01:30 Australia Construction Work Done (QoQ) (Q2) -1.0% forecast, -1.9 previous
Looking Ahead - Events, Other Releases (GMT)
• 16:20 FOMC Member Barkin Speaks
Currency Summaries
EUR/USD: The euro declined against the U.S. dollar on Tuesday, as dollar gained on signs Sino-U.S. trade hostilities might be easing for now helped restore investor confidence after the previous session’s rout. Supporting the market mood, U.S. President Donald Trump on Monday flagged the possibility of a trade deal with China and said he believed Beijing was sincere in its desire to reach an agreement. Global markets had been roiled at the start of the week by new tariffs from the world’s two largest economies. The dollar index versus a basket of six major currencies stood at 97.990, having risen about 0.5% overnight. The euro was down 0. 10% at $1.1089 after losing 0.4% on Monday. Immediate resistance can be seen at 1.1133 (21 DMA), an upside break can trigger rise towards 1.1200 (50 DMA).On the downside, immediate support is seen at 1.1051 (Aug 23rd low), a break below could take the pair towards 1.1000 (Psychological level).
GBP/USD: The British pound rose against dollar on Tuesday, as opposition parties vowed to try and pass a law to prevent a no-deal Brexit at the end of October, encouraging traders to buy sterling even though most fear the country is headed for a disorderly exit from the EU.Parliament returns from its summer break next week and is preparing for a battle with Prime Minister Boris Johnson, who has pledged to take Britain out of the European Union on Oct. 31, with or without an exit agreement. Labour leader Jeremy Corbyn on Tuesday hosted talks with other opposition parties and they agreed to try and stop a no-deal Brexit, including through passing legislation that would force Johnson to seek a delay to Brexit. Sterling rose more than 0.7% on the day to hit as high as $1.2310, its strongest since July 29, before giving up some of those gains to trade at $1.2284. Immediate resistance can be seen at 1.2311 (Daily high), an upside break can trigger rise towards 1.2379 (50 DMA).On the downside, immediate support is seen at 1.2206 (Aug 27th low), a break below could take the pair towards 1.2147 (21 DMA).
USD/CAD: The Canadian dollar strengthened to a nearly two-week high against its U.S. counterpart on Tuesday as oil prices rose and investors became more optimistic that the prolonged trade dispute between the United States and China would be resolved. The United States and China sought to ease trade tensions on Monday, with Beijing calling for calm and U.S. President Donald Trump predicting a deal after markets fell in response to new tariffs from both countries.Canada exports many commodities, including oil, so its economy could benefit from an improved outlook for global trade. The Canadian dollar was last trading 0.1% higher at 1.3240 to the greenback, or 75.53 U.S. cents. The currency touched its strongest level since Aug. 14 at 1.3225.Immediate resistance can be seen at 1.3307 (200 DMA), an upside break can trigger rise towards 1.3339 (23rd Aug high).On the downside, immediate support is seen at 1.3224 (Daily low), a break below could take the pair towards 1.3171 (50 DMA).
USD/JPY: The U.S. dollar declined against the yen on Tuesday, as investors fled to safer assets amid worries the U.S.-China trade conflict would get worse, days after both sides announced new tariffs. . On Friday, China said it would increase tariffs on $75 billion worth of American goods. The United States retaliated by saying it would raise existing tariffs on $250 billion worth of Chinese goods to 30% from 25% on Oct. 1.U.S. President Donald Trump also said he would tax another $300 billion worth of Chinese imports 15%, rather than the 10% he had planned. The Japanese currency was last up 0.3% at 105.755 against the dollar. That wasn’t as strong as Monday’s gain, when it reached a three-year high, excluding the January flash crash. The yen has gained 3.5% against the dollar this year as the trade war drives traders to safe-haven assets. Strong resistance can be seen at 106.18 (11 DMA), an upside break can trigger rise towards 106.42 (21 DMA).On the downside, immediate support is seen at 105.58 (Daily low), a break below could take the pair towards 105.00 (Psychological level).
Equities Recap
European markets eased off their lows on Tuesday, as Italian stocks rallied on hopes that a snap election could be avoided by an arrangement to form a new government in Rome.
The UK's benchmark FTSE 100 closed down by 0.08 percent, FTSEurofirst 300 ended the day up by 0.08 percent, Germany's Dax ended up by 0.62 percent, and France’s CAC finished the up by 0.67percent.
U.S. stocks opened higher on Tuesday as investors held their hopes on a resolution to the prolonged trade dispute between the world’s two largest economies despite mixed signals from both sides.
Dow Jones closed down by 0.47 percent, S&P 500 ended down 0.32 percent, Nasdaq finished the day down by 0.34 percent.
Treasuries Recap
The U.S. yield curve inversion deepened on Tuesday to levels not seen since 2007, rekindling fears of a looming recession that spurred a sell-off on Wall Street and stoked even more safe-haven demand for government bonds.
The yields on two-year notes were 1.529%, down 2.30 basis points. On Monday, they declined to 1.449%, their lowest since September 2017.
Commodities Recap
Gold rose on Tuesday as uncertainty over the U.S.-China trade dispute kept investors on edge and drove inflows into the safe haven metal.
Spot gold was up 0.4% at $1,531.28 per ounce, as of 1217 GMT. During trading on Monday, the metal had hit its highest level since April 2013 at $1,554.56.U.S. gold futures were up 0.3% at $1,541.60.
Oil prices rose in volatile trade on Tuesday supported by expectations of a drawdown in U.S. crude inventories, though gains were capped by worries about a recession and uncertainty over a China-U.S. trade deal.
Brent crude settled up 81 cents, or 1.4%, at $59.51 a barrel. U.S. West Texas Intermediate crude ended $1.29, or 2.4%, higher at $54.93 a barrel.
