Market Roundup
- India's July retail inflation likely stayed above c.bank target - Reuters News
- Reserve Bank of NZ says defers LVR start date until Oct. 1 - Reuters News
- PBOC sets yuan mid-point at 6.6543 / dlr vs last close 6.6375 - Reuters News
- China stats bureau says: economy still operating within reasonable range
- China stats bureau says decline in private investment growth also related to funding, policy implementation challenges
- China stats bureau says decline in private investment growth related to lack of market access to services, emerging industries
- China stats bureau says investment growth is slowing, but structure is improving
- China stats bureau says china economy still in period of adjustment, facing downward pressure
- China July retail sales +10.2 pct y/y (Reuters poll +10.5 pct)
- China Jan-July fixed-asset investment +8.1 pct y/y (Reuters poll +8.8 pct)
- China July industrial output +6.0 pct y/y (Reuters poll +6.1 pct)
- China Jan-July private sector fixed asset investment +2.1 pct y/y
- China July industrial output +6.0 pct y/y (Reuters poll +6.1 pct)
Economic Data Ahead
- (0245 ET/0645 GMT) France Non-Farm Payrolls QQ Q2
- (0300 ET/0700 GMT) Spain HICP YY Jul
- (0300 ET/0700 GMT) Spain CPI MM Jul
- (0300 ET/0700 GMT) Spain HICP MM Jul
- (0300 ET/0700 GMT) Spain CPI YY Jul
- (0400 ET/0800 GMT) Italy GDP Prelim YY Q2
- (0400 ET/0800 GMT) Italy GDP Prelim QQ Q2
- (0430 ET/0830 GMT) Great Britain Construction O/P Vol MM Jun
- (0430 ET/0830 GMT) Great Britain Construction O/P Vol YY Jun
- (0500 ET/0900 GMT) Eurozone Industrial Production MM* Jun
- (0500 ET/0900 GMT) Eurozone Industrial Production YY* Jun
- (0500 ET/0900 GMT) Eurozone GDP Flash Estimate QQ Q2
- (0500 ET/0900 GMT) Eurozone GDP Flash Estimate YY Q2
Key Events Ahead
No Significant Events Scheduled
FX Beat
DXY: The dollar index, against a basket of currencies trades flat at 95.91, having retreated from a low of 95.44 touched on Wednesday.
EUR/USD: The euro was little changed after declining from a high of 1.1191 touched on Thursday. The greenback strengthened following comments from San Francisco Fed President John Williams that suggested the possibilities of a U.S. interest rate hike this year, as long as labor market conditions improved and inflation rate headed higher. The major trades flat at 1.1136, attempting to regain the 1.1150 level. Markets attention will remain on Eurozone industrial production and GDP numbers, ahead of the U.S. retail sales figures. Strong retail sales data will strengthen the case of Fed rate hike this year, which would boost the bid tone around the dollar. Immediate support is seen at 1.1113 (Aug 4 Low), break below could take it lower 1.1100. On the upside, resistance is located at 1.1183, break above targets 1.1200.
USD/JPY: The greenback rose above the 102 handle, supported by statements from a Fed official suggesting a U.S. interest rate hike this year amid persisting risk-on market profile. The major came under selling pressure after soft Chinese economic releases triggered a renewed bout of risk-aversion across the board. However, the sentiment around the dollar remains underpinned amid rising equities and higher oil prices. The greenback trades 0.2 percent higher at 102.11, attempting to extend gains above the 102 handle. The major will continue to track persisting risk sentiments, ahead of U.S. macro data for further cues on the pair. Immediate resistance is located at 102.52, break above targets 103.00. On the downside, support is seen at 101.40, break below could drag it till lower 101.00.
GBP/USD: Sterling regained some ground after declining to a 1-month low following downbeat housing data on Thursday. The major attempted a minor recovery as the greenback came under renewed selling pressure across the board on profit taking after yesterday’s solid recovery. Sterling trades 0.1 percent up at 1.2972, retreating from a 1-month low of 1.2935 touched in the previous session. In absence of relevant economic data from UK, focus will remain on the U.S. retail sales and consumer sentiment data for further cues. Immediate resistance is located at 1.2995 (5-DMA), break above will take it over 1.3000 handle. On the downside, support is seen at 1.2935 (Previous Session Low), break below targets 1.2900. Against the euro, the pound trades flat at 85.85 pence.
AUD/USD: The Australian dollar edged down from recent highs as Chinese economic indicators missed expectations. However, the major was on track to end the week 0.8 percent higher, despite falling interest rates at home. China's fixed asset investment from January to July rose by 8.1 percent from a year earlier, against expectations of 8.8 percent, while July retail sales increased 10.2 percent, versus 10.5 forecast. Industrial output rose 6.0 percent from a year earlier, slowing from 6.2 percent in June and missing forecasts of 6.1 percent, which refueled China slowdown worries, Australia’s top trading partner. The Aussie trades 0.1 percent lower at 0.7686, having touched a low of 0.7670 earlier in the session. Markets will continue to digest Chinese economic headlines, ahead of U.S. macro releases, including the retail sales and PPI data due later in the day. Immediate support is seen at 0.7650, break below could take it near 0.7600 handle. On the higher side, resistance is located at 0.7730, break above targets 0.7759 (Previous Session High).
NZD/USD: The New Zealand dollar hovered away from its 1-year highs after the market shifted their attention towards rising possibilities of U.S. interest rates hike this year. The major also weakened following soft China data release, dragging the pair to session’s low of 0.7189. However, the losses were capped as markets cheered on rising equities and higher oil prices. The Kiwi trades flat at 0.7202, attempting to sustain gains above the 0.7200 handle. It has gained nearly 1 percent this week, despite the Reserve Bank of New Zealand cutting rates to a record low of 2.0 percent. The movements in the pair will be driven by broad based sentiment, ahead of series of economic data from the U.S. Immediate support is located at 0.7178 (5-DMA), break below could take it till 0.7146/ 0.7110. On the higher side, resistance is seen at 0.7246, break above targets 0.7338.
Equities Recap
Asian shares rose, after a spike in oil prices boosted Wall Street to record highs overnight.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.2 percent and was on track to gain 1.9 percent for the week. MSCI's 46-country All World index held close to a 1-year high touched overnight.
Tokyo's Nikkei edged up 1.10 pct at 16,919.92, Australia's S&P/ASX 200 index rose 0.26 pct at 5,522.20 points and South Korea's KOSPI trades flat at 2,048.17 points.
Shanghai composite index added 1 percent at 3,031.86 points, while CSI300 index was trading 1.2 percent higher at 3,272.45 points.
Hong Kong’s Hang Seng was trading 0.9 percent higher at 22,780.80 points. Taiwan shares rose 0.2 pct at 9,150.39 points.
Commodities Recap
Crude oil prices nudged up, extending previous session gains on expectations that exporters could talk about ways to reduce the supply overhang at an upcoming meeting. International Brent crude oil was trading 0.7 percent up at $46.25 per barrel at 0410 GMT, while U.S. West Texas Intermediate crude was at $43.83 a barrel, up 0.9 percent, from its last close.
Gold regained some ground from early lows, as the dollar strengthened on expectations of a Federal Reserve rate hike this year. Spot gold edged up 0.1 percent at $1,340.00 an ounce at 0414 GMT, having declining about 0.6 percent earlier in the session. U.S. gold was down 0.4 percent at $1,345 an ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 1.5491 percent down by 0.022 bps, while 5-year was 0.011 bps lower at 1.1396 percent.
The Australian government bonds slumped as crude oil prices bounced on hopes that the oil producing countries at an upcoming meeting discuss ways of stabilizing the global energy market. The yield on the benchmark 10-year Treasury note rose 6 basis points to 1.908 percent and the yield on short-term 2-year note jumped 2-1/2 basis points to 1.458 percent.
The New Zealand bonds gained after the Reserve bank of New Zealand lowered its official cash rate (OCR) to a new record low of 2 percent in wake of depressing headline inflation and subdued economic growth. The yield on the benchmark 10-year bond fell 3 basis points to 2.160 percent and the yield on 7-year note also dipped 3 basis points to 1.870 percent and the yield on short-term 2-year note slid 2-1/2 basis points to 1.765 percent.
Canadian government bond prices were lower across the maturity curve in sympathy with U.S. Treasuries. The 2-year bond fell 6 Canadian cents to yield 0.538 percent and the benchmark 10-year declined 38 Canadian cents to yield 1.032 percent.
