Market Roundup
- China's new home price growth continues to slow in July.
- Chinese banks battle slowing loan growth, default risks loom.
- China will step up efforts to boost private investment - state planner.
- U.S., Japan step up defense cooperation to counter North Korea.
- U.S., South Korea to start talks Tuesday in Seoul on trade pact.
- Low yields are warning Fed to think twice on rate hike –Kaplan.
- On sidelines of trade talks, businesses tout NAFTA's benefits.
- Foreign CB US debt holdings +$3.5 bln to $3.3 tln August 9 week.
- Treasuries $2.6 bln to $3.0 tln, agencies +$841 mln to $261.6 bln.
- U.S. high-yield fund withdrawals largest since March –Lipper.
Economic Data Ahead
- (0330ET/0730 GMT) Sweden capacity utilisation rate, previous 0.4 pct.
- (0400 ET/0800 GMT) Taiwan GDP revised, previous 2.1 pct.
- (0730 ET/1130 GMT) India forex reserves, bank loan growth and deposit growth.
Key Events Ahead
- (0605 ET/1005 GMT) UK Stg2.0/1.5/2.0 bln for 1/3/6 months auctions.
FX Recap
USD: The dollar's index against a basket of six major currencies was trading around 93.58 marks.
EUR/USD: The euro held steady at $1.1734 but was down 0.8 percent for the week. The euro had tumbled to a three-week low of $1.1662 on Thursday, after the minutes of the European Central Bank's July 20 policy meeting showed policymakers were worried that the repricing of the currency could overshoot. Even with its losses this week, the euro is still up more than 11 percent so far this year. Immediate support was seen 1.1662 and resistance was seen at 1.1838 marks.
USD/JPY: The yen strengthens against U.S. dollar and was trading around 109.36 marks. Pair made intraday high at 109.57 and low at 109.27 levels. A sustained close above 109.55 is required to take the parity higher towards 110.36, 111.33, 112.20, 113.12, 115.37 and 117.42 marks. Alternatively, a daily close below 109.55 will drag the parity down towards 108.13 levels. The dollar fell 0.2 percent to 109.41 yen, adding to its 0.6 percent drop on Thursday.
GBP/USD: The pound was flat against the dollar at $1.2889 but gained 0.2 percent on the day to 91.10 pence per euro. Sterling edged past 91 pence per euro on Thursday after a mixed batch of UK retail sales figures helped investors put aside nerves over the economy and Brexit talks that have driven the currency to its weakest since October. Pair made intraday high at $1.2898 and low at $1.2863 mark. A sustained close above $1.2900 will take the parity higher towards $1.3022 marks. Alternatively, reversal from key resistance will take the parity down towards $1.2625 marks.
AUD/USD: The Australian dollar held at $0.7890, rising above a trough of $0.7816 touched on Wednesday. The Aussie went as low as $0.7808 earlier this week, a level not seen since July 18.
NZD/USD: The New Zealand dollar climbed to $0.7290 after sinking to a one-month low of $0.7229 the previous day. The kiwi faces stiff chart resistance around $0.7360. Key Support was seen at $0.7222 mark.
Equities Recap
Japan’s Nikkei was trading 1.31 pct lower at 19,444.25 points.
Hong Kong’s Hang seng was trading 0.68 percent lower at 27,154.29 points.
Australia’s S&P/ASX 200 was trading 0.70 pct lower at 5,739.50 points.
Shanghai composite index to open down 0.5 pct at 3,253.24 points and China's CSI300 index to open down 0.4 pct at 3,707.19 points.
Taiwan stock was trading around 0.50 pct lower at 10,315.32 points.
India’s NSE Nifty was trading around 0.65 percent lower at 9,840.15 points and BSE Sensex was trading at 0.71 percent lower at 31,570.25 points.
South Korea’s kospi was trading 0.13 percent lower at 2,358.22 points.
Commodities Recap
Oil prices fell early on Friday as part of a broad-based selloff across markets and despite signs that crude markets are gradually tightening. Brent crude futures, the international benchmark for oil prices, were at $50.93 per barrel at 0031 GMT, down 10 cents, or 0.2 percent, from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $47.02 a barrel, down 7 cents, or 0.2 percent.
Gold was mostly steady early on Friday amid weaker Asian stocks, with some investors gravitating towards safe-haven assets on political uncertainty in the United States and after a van mowed through crowds in Barcelona, killing at least 13 people. Spot gold was nearly unchanged at $1,286.60 per ounce by 0113 GMT, after climbing for two straight days. U.S. gold futures for December delivery were flat at $1,292.60 per ounce.
Treasuries Recap
New Zealand government bonds gained, sending yields 2.5 basis points lower.
Australian government bond futures rose, with the three-year bond contract up 2 ticks at 98.040. The 10-year contract climbed 3 ticks to 97.3700.
U.S. 10-year treasury yield was at 2.204 pct vs U.S. close of 2.197 pct on Thursday.
