Market Roundup
• Trump, U.S. Congress leaders reach deal on debt limit
• IMF cuts global growth outlook
• Pound sags as hard Brexit advocate Johnson becomes UK PM
• US Treasury to sell $40 bln two-year notes
tension driven gains
• US Redbook (MoM), 1.1%, 1.0% previous
• US Redbook (YoY), 4.9%, 4.7% previous
• US May House Price Index (MoM) 0.1%, 0.3% forecast, 0.4% previous
• US May House Price Index (YoY), 5.0%, 5.3% previous
• US May House Price Index, 275.0, 274.8 previous
• US June Existing Home Sales ,5.27m, 5.35m forecast, 5.36 m previous
• US July Richmond Manufacturing Index -12, 5 forecast, 2 previous
• US Jul Richmond Services Index 11, -16 previous
• EU Jul Consumer Confidence -6.6, -7.2 forecast, -7.2 previous
• Brazil Jun Federal Tax Revenue 119.95B, 113.28B previous
Looking Ahead - Economic Data (GMT)
• 22:45 New Zealand Jun Exports 5.29B forecast, 5.81B previous
• 22:45 New Zealand Jun Imports 5.20B forecast, 5.54B previous
• 22:45 New Zealand Jun Trade Balance MoM 100m forecast, 264m previous
• 23:00 Australia Manufacturing PMI 52.0 previous
• 23:00 Australia Services PMI 52.6 previous
• 00:30 Japan July Manufacturing PMI 49.7 forecast, 49.3 previous
• 05:00 Japan Leading Index 95.2 forecast, 95.2 previous
Looking Ahead - Events, Other Releases (GMT)
• No major economic events are scheduled
Currency Summaries
EUR/USD: The euro declined against the U.S. dollar on Tuesday, as dollar rose after President Donald Trump and U.S. lawmakers reached a two-year deal that raises the limits on government borrowing to cover spending. The agreement averted another partial government shutdown. A 35-day shutdown between December and January led to a furlough of 800,000 federal workers and cost the economy about $3 billion.The euro was down 0.53 percent at $1.1148. An index that tracks the dollar versus a basket of six major currencies was up 0.45 at 97.73. Immediate resistance can be seen at 1.1217 (5 DMA), an upside break can trigger rise towards 1.1242 (50 DMA).On the downside, immediate support is seen at 1.1126 (lower Bollinger Band), a break below could take the pair towards 1.1100 (Psychological level).
GBP/USD: Sterling strengthened against dollar on Tuesday, after eurosceptic Johnson was elected as the replacement for outgoing Prime Minister Theresa May.Concern that Britain will crash out of the European Union without a withdrawal agreement have grown since Johnson said he would pull Britain out on Oct. 31 “do or die”.The pound traded 0.3% weaker at $1.2437, near last week’s 27-month low of $1.2382, having made it as high as $1.2481. Sterling has fallen 3.7% versus the dollar in the past three months due to uncertainty about how Britain will avoid a no-deal exit from the EU. Immediate resistance can be seen at 1.2551 (21 DMA), an upside break can trigger rise towards 1.2618 (50 DMA).On the downside, immediate support is seen at 1.2419 (Daily low), a break below could take the pair towards 1.2347 (Lower Bollinger Band).
USD/CAD:The Canadian dollar weakened to a near one-month low against its U.S. counterpart on Tuesday, as the greenback broadly climbed and after recent domestic data supported the view that the Bank of Canada could cut interest rates this year.Since Friday, domestic data for May has showed a surprise decline in both retail sales and wholesale trade. The U.S. dollar rose to a two-week high versus its rivals after U.S. President Donald Trump and congressional leaders agreed a two-year extension of the debt limit, dousing fears of a government default later this year. At (1952 GMT), the Canadian dollar was trading 0.2% lower at 1.3143 to the greenback. The currency, which touched its lowest intraday level since June 26 at 1.3164, has pulled back from a near nine-month high on Friday at 1.3016.
Immediate resistance can be seen at 1.3162 (Higher Bollinger Band), an upside break can trigger rise towards 1.3200 (Psychological level).On the downside, immediate support is seen at 1.3067 (9 DMA), a break below could take the pair towards 1.3000(Lower Bollinger Band).
USD/JPY: The dollar rose against the Japanese yen on Tuesday ,as market participants eyed upcoming Fed meetings for new signals about interest rate cut. The U.S. central bank is widely expected to lower interest rate at its meeting ending July 31, but expectations for a larger 50-basis point cut have waxed and waned due to mixed signals from Fed policymakers. Though a 25-basis-point cut by the Fed is viewed as more likely than a deeper one, some analysts have argued that a 50- basis-point decrease would be more effective at stimulating the economy and offsetting concerns about slowing global growth. The dollar was last trading 0.31 percent higher versus the Japanese yen at 108.21. Strong resistance can be seen at 108.47 (50 DMA), an upside break can trigger rise towards 109.00 (Psychological level).On the downside, immediate support is seen at 107.97 (9 DMA), a break below could take the pair towards 107.27 (Lower Bollinger Band).
Equities Recap
European shares rose on Tuesday, tracking rises on Wall Street and in Asia as better-than-expected results for Banco Santander helped put Spanish markets on course to end a four-session losing streak.
UK's benchmark FTSE 100 closed up by 0.56 percent, Germany's Dax ended up by 1.64 percent, France’s CAC finished the day up by 0.92 percent.
U.S. stocks rose on Tuesday, boosted by upbeat earnings and forecasts from Coca-Cola and United Technologies, while a two-year debt ceiling and budget deal between President Donald Trump and Congress buoyed sentiment.
Dow Jones closed up by 0.65 percent, S&P 500 ended up by 0.67 percent, Nasdaq finished the down up by 0.58 percent.
Treasuries Recap
U.S. Treasuries yields edged higher on Tuesday as investors waited on central bank meetings for new signals about how many interest rate cuts are likely in Europe and the United States.
Benchmark 10-year notes fell 5/32 in price to yield 2.060%, up from 2.043% on Monday. The yields have held between 2.023% and 2.078% for four consecutive trading sessions.
Commodities Recap
Gold prices dipped on Tuesday as the dollar strengthened and some investors locked in profits ahead of the U.S. Federal Reserve meeting next week.
Spot gold was down 0.5% at $1,417.41 per ounce, as of 0730 GMT. U.S. gold futures slipped 0.6% to $1,417.90 an ounce.
