Market Roundup:
•French 12-Month BTF Auction 0.453%, 0.609% previous
•French 3-Month BTF Auction -0.378%,-0.392% previous
•French 6-Month BTF Auction -0.021% ,-0.163% previous
•Canada Jun Manufacturing PMI 54.6, 56.8 previous
Looking Ahead Economic Data(GMT)
•01:00 NZ ANZ Commodity Price Index (MoM) -2.8% previous
•01:30 Australia Retail Sales (MoM) 0.9% forecast, 0.9% previous
•01:45 China Jun Caixin Services PMI 49.7 forecast, 1.4 previous
Looking Ahead - Events, Other Releases (GMT)
• 04:30 Australia RBA Interest Rate Decision 1.35% forecast, 0.85% previous
•04:30 Australia RBA Rate Statement
Currency Summaries
EUR/USD: The euro strengthened against dollar on Monday as improved global risk sentiment in a quiet trading session due to a holiday in the United States. Data on Friday showed euro zone inflation surging to another record, adding to the case for the ECB to raise interest rates this month for the first time in a decade. The single currency rose 0.2% to $1.0440 against the dollar, but stayed barely above May's five-year trough of $1.0349, while sterling rose 0.4% to $1.2143 after hitting a two-week low of $1.1976 on Friday. Immediate resistance can be seen at 1.0466(5DMA),an upside break can trigger rise towards 1.0543(38.2%fib).On the downside, immediate support is seen at 1.0366(23.6%fib), a break below could take the pair towards 1.0317(Lower BB).
GBP/USD: Sterling strengthened against the dollar on Monday as investors await more signals from the Bank of England on its future rate hike path this week. Last week, the British pound concluded its sharpest decline since 2016, down more than 10% against the dollar so far this year. Focus remains on the slowing UK economy, with the BoE tasked with fighting rising inflation and avoiding a recession. The BoE has hiked rates five times since December and their next scheduled rate announcement is in August. Some market participants expect another 50 basis point hike at the next meeting. Immediate resistance can be seen at 1.2135(5DMA),an upside break can trigger rise towards 1.2318 (38.2%fib).On the downside, immediate support is seen at 1.2054 (23.6%fib), a break below could take the pair towards 1.1985(Lower BB).
USD/CAD: The Canadian dollar appreciated against its US counterpart on Monday as oil prices rose and a Bank of Canada survey showed rising inflation expectations, fueling bets of a big rate hike next week by the central bank. Consumer inflation expectations hit new highs in the short-term and rose significantly in the long-term, a BoC survey showed. Money markets expect the BoC to raise its benchmark rate by three-quarters of a percentage point at its next policy decision on July 13, which would be its biggest hike in 24 years. The Canadian dollar was trading 0.2% higher at 1.2853 to the greenback after moving in a range of 1.2838 to 1.2902.Immediate resistance can be seen at 1.2897 (11DMA), an upside break can trigger rise towards 1.42945(23.6% fib) On the downside, immediate support is seen at 1.2836 (38.2%fib), a break below could take the pair towards 1.2778 (June 13th low).
USD/JPY: The dollar dipped against Japanese yen on Monday as monetary policy difference between the Bank of Japan and the U.S. Federal Reserve boosted supported dollar against yen. Safe-haven demand has kept the dollar elevated even if markets have scaled back some of their U.S. rate hike expectations. The market is pricing in around an 85% chance of another hike of 75 basis points this month and rates at 3.25% to 3.5% by year-end, before cuts in 2023.The U.S. dollar index eased 0.03% to 105.02, not far below last month's two-decade high of 105.790.Looking ahead to the rest of the week, investors are awaiting publication of minutes from last month's Fed meeting on Wednesday and U.S. employment data on Friday. Strong resistance can be seen at 136.73 (23.6%fib), an upside break can trigger rise towards 137.19(Higher BB).On the downside, immediate support is seen at 134.07(21DMA), a break below could take the pair towards 133.98(50%fib).
Equities Recap
European shares rose on Monday as the oil and gas sector marked its best session in two months, while bleak euro zone investor morale kept sentiment in check ahead of the European Central Bank's plan to start hiking interest rates this month.
UK's benchmark FTSE 100 closed up by 0.89 percent, Germany's Dax ended down by 0.31percent, France’s CAC finished the day up by 0.40 percent.
Wall Street closed on account of US Independence Day
Commodities Recap
Gold fell on Monday as prospects of higher interest rates dimmed appeal for the non-yielding asset, but a softer dollar helped bullion to cling above the $1,800 support level.
Spot gold fell 0.2% to $1,807.40 an ounce by 1311 GMT, having touched a five-month low of $1,783.50 on Friday.U.S. gold futures rose 0.4% to $1,809.00.
Oil rose on Monday as supply concerns driven by lower OPEC output, unrest in Libya and sanctions against Russia outweighed fears of a demand-sapping global recession.
Brent crude rose $2.26, or 2%, to $113.89 a barrel by 12:47 p.m. ET (1648 GMT) after falling more than $1 in early trade. U.S. West Texas Intermediate (WTI) crude rose $2.20, or 2%, to $110.63, in thin volume during the U.S. Independence Day holiday.
