Market Roundup
• Global stocks outlook dims with risk aversion on the rise again.
• US stocks hover near record highs, oil falls; TRY rebounds but local stocks plummet.
• US home builder sentiment dips (Jul 59 vs forecast 60).
• Sterling boosted by Softbank bid and Weale's hawkish comments.
• US Treasury sees FX markets in line with fundamentals, sees scope for G20 to consider fiscal policy in a more & comprehensive way.
• EC’s Dombrovski: Brexit vote means Capital Markets unit needed more than ever to help capital flow through EU.
• BCB Poll: Economists cut Brazil 2017 inflation forecast to 5.3 percent from 5.4% previous.
Looking Ahead - Economic Data (GMT)
• No Significant Data
Looking Ahead - Events, Other Releases (GMT)
• 01:30 Australia RBA to release the minutes of its July monetary policy meeting
Currency Summaries
EUR/USD is likely to find support at 1.1000 levels and currently trading at 1.1076 levels. The pair has made session high at 1.1083 and hit lows at 1.1046 levels. Euro strengthened against the U.S. dollar on Monday as concerns over a failed coup attempt in Turkey eased, increasing demand for European currencies. Demand for safe heaven assets declined as traders pared their safe-haven holdings after Turkey's government said it was in control of the country and the economy. That eased concerns about the prospect of another major round of turmoil to add to Europe's economic and political problems, drawing investors back into higher-risk currencies and out of the traditional security of the yen. The euro rose 0.3 percent against the dollar to $1.1073. Despite Monday's bounce, traders were cautious about the currency with recent surveys pointing to a weakening in business and consumer confidence.
GBP/USD is supported in the range of 1.3207 currently trading at 1.3267 levels. It reached session high at 1.3315 and hit low at 1.3217 levels. British pound edged higher against the U.S. dollar on Monday as the pound was bolstered after Bank of England policymaker Martin Weale said there was no urgent need to cut interest rates and pointed to problems with both more cuts and any further quantitative easing. Weale, who is a noted hawk and will step down after next month's meeting, said he did not see any sense of panic among consumers or businesses after Britain's vote to leave the European Union last month, and that the central bank should not be afraid of disappointing markets. Sterling hit a day's high of $1.3292 after Weale's comments, having traded at $1.3245 beforehand. In late US session, it was trading at $1.3250, up 0.4 percent on the day.
USD/CAD is supported at 1.2900 levels and is trading at 1.2949 levels. It has made session high at 1.3020 and lows at 1.2925 levels. The Canadian dollar declined against the U.S. dollar on Monday, as crude oil prices declined on heightened geopolitical tensions in Turkey and U.S. dollar strengthened across the board. Oil prices fell as traders shrugged off the impact of the attempted coup in Turkey and the market turned its attention to bearish fundamentals. U.S. crude prices were down 1.4 percent at $46.96 a barrel. On the data front, Canadian small business lending picked up slightly in May from April to halt a five-month slide, PayNet data showed on Monday, but the appetite for loans remained subdued and a measure of delinquencies hit its highest since 2011. Still, the loonie rose 0.8 percent last week as a somewhat optimistic update from the Bank of Canada lowered expectations for an interest rate cut.
USD/JPY is supported around 105.00 levels and currently trading at 106.25 levels. It peaked to hit session high at 106.27 and made session lows at 105.23 levels. The dollar rose by more than 1 percent against the yen on Monday, nearing a three-week high, as investors unwound a surge of safe-haven trades made on the back of an attempted military coup in Turkey. Turkey purged its police on Monday after rounding up thousands of soldiers in the wake of the unsuccessful coup over the weekend, with the government saying it was in control of the country and economy. The yen also has been under pressure since reports that discussion had begun about the possibility of the Bank of Japan directly funding an increase in government spending known as helicopter money. The dollar was up 1.15 percent against the yen, rising to 106.15 yen. The dollar index, which tracks the dollar against six major world currencies, was little moved at 96.560.
Equities Recap
European shares rose on Monday as technology stocks climbed after a bid for Britain's, enabling markets to offset concerns over unrest in Turkey that weighed on some travel and financial stocks.
UK's benchmark FTSE 100 closed up by 0.5 percent, the pan-European FTSEurofirst 300 ended the day up by 0.31 percent, Germany's Dax ended up by 0.1 percent, France’s CAC finished the day down by 0.2 percent.
Wall Street rose on Monday as Bank of America's better-than-expected profit and a tech sector deal fed recent optimism about a stronger U.S. economy.
Dow Jones closed up by 0.9 percent, S&P 500 ended up by 0.23 percent, Nasdaq finished the day up by 0.53 percent.
Treasuries Recap
U.S. Treasury debt prices rose on Monday, after two days of losses, as a failed coup attempt in Turkey over the weekend heightened concerns about global geopolitical risk, prompting investors to seek the safety of government bonds.
The benchmark 10-year notes rose 6/32 in price to yield 1.571 percent, up from 1.548 percent on Friday.
U.S. 30-year bond prices were higher as well, up 12/32 in price, yielding 2.287 percent from 2.257 percent late Friday.
Commodities Recap
Gold fell as much as one percent on Monday as European equities rose and investor jitters calmed following a failed coup attempt in Turkey.
Spot gold fell earlier to a session low of $1,323.43 an ounce and was down 0.6 percent at $1,328.96 by 3:36 p.m. EDT (1936 GMT).U.S. gold settled up 0.1 percent at $1,329.30 per ounce.
Oil prices settled down more than 1 percent on Monday after rising stockpiles of crude and refined fuel intensified fears another major glut was building up.
Brent crude settled down 65 cents, or 1.4 percent, at $46.96 a barrel. It fell more than $1 earlier to an intraday low of $46.50.
U.S. West Texas Intermediate (WTI) crude settled down 71 cents, or 1.6 percent, at $45.24 a barrel, after a session low at $44.86.
