Market Roundup
- EUR/USD -0.33%, USD/JPY 0.09%, GBP/USD -0.36%, EUR/GBP 0.03%
- DXY 0.16%, DAX -0.32%, FTSE -0.96%, Brent -0.74%, Gold -0.26%
- Largest U.S. business group attacks Trump on tariffs
- British PM May gets new customs idea as party bickers over Brexit
- EZ Jun Markit Mfg Final PMI, 54.9, 55.0 forecast, 55.0 previous
- Great Britain Jun Markit/CIPS Mfg PMI, 54.4, 54.0 forecast, 54.4 previous
- Germany Jun Markit/BME Mfg PMI, 55.9, 55.9 forecast, 55.9 previous
- France Jun Markit Mfg PMI, 52.5, 53.1 forecast, 53.1 previous
- EZ May Unemployment Rate, 8.4%, 8.5% forecast, 8.5% previous
- Debt relief deal will help smooth Greek market return -central bank
Economic Data Ahead
- (0945 ET/1345 GMT) Financial firm Markit releases U.S. Manufacturing PMI for the month of June. The index is likely to show a final reading of 55.0 after posting a gain of 54.6 in the previous month.
- (1000 ET/1400 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. manufacturing Purchasing Managers' index eased to 58.3 in June from 58.7 in May.
- (1000 ET/1400 GMT) The Commerce Department is likely to report that U.S. construction spending increased 0.5 percent in May after rising 1.8 percent in the previous month.
Key Events Ahead
- (0930 ET/1330 GMT) ECB Chief Economist Peter Praet participates in a panel at the Informal Seminar on the occasion of Erkki Likkanen's farewell organised by the Bank of Finland in Helsinki
FX Beat
DXY: The dollar index rebounded ahead of a July 6 deadline when Washington is due to impose US$34 billion of tariffs on Chinese exports. The greenback against a basket of currencies trades 0.4 percent up at 94.84, having touched a high of 95.53 on Thursday, its highest since July 2017. FxWirePro's Hourly Dollar Strength Index stood at -38.72 (Neutral) by 1100 GMT.
EUR/USD: The euro declined after data showed Euro zone factory growth slowed to an 18-month low in June, amid growing concerns about trade barriers and their impact on overall economic activity. Moreover, reports that German Interior Minister Horst Seehofer had rejected a migration deal Merkel negotiated at an EU summit dented the bid tone around the major. The European currency traded 0.3 percent down at 1.1642, having touched a high of 1.1719 on Tuesday, its highest since June 14. FxWirePro's Hourly Euro Strength Index stood at 66.46 (Bullish) by 1100 GMT. Immediate resistance is located at 1.1700, a break above targets 1.1744 (June 4 High). On the downside, support is seen at 1.1530 (5-DMA), a break below could drag it till 1.1500.
USD/JPY: The dollar retreated from an over 1-week peak touched earlier in the day, as rising concerns over an escalation in the trade dispute between the United States and its partners dented demand. The major was trading 0.1 percent up at 110.75, having hit a high of 111.06 earlier, its highest since May 22. FxWirePro's Hourly Yen Strength Index stood at -60.36 (Bearish) by 1100 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. manufacturing PMI from both Markit and ISM. Immediate resistance is located at 111.39 (May 21 High), a break above targets 111.08 (June 18 High). On the downside, support is seen at 111.69 (Jan 12 Low), a break below could take it lower 109.68 (June 27 Low).
GBP/USD: Sterling eased, reversing some of its previous session gains, despite British factories keeping up a steady pace of growth in June but worries about global trade and Brexit dented confidence about the outlook to a 7-month low. The economy's Manufacturing Purchasing Managers' Index rose to 54.4 from a downwardly revised 54.3 in May, surpassing the consensus of 54.0. The major traded 0.4 percent down at 1.3154, having hit a low of 1.3049 on Thursday; it’s lowest since Nov. 2. FxWirePro's Hourly Sterling Strength Index stood at 75.24 (Bullish) 1100 GMT. Immediate resistance is located at 1.3250, a break above could take it near 1.3314 (June 22 High). On the downside, support is seen at 1.3146 (June 20 Low), a break below targets 1.3120 (June 21 Low). Against the euro, the pound was trading 0.05 percent down at 88.43 pence, having hit a low of 88.90 pence on Friday, it’s lowest since March 12.
USD/CHF: The Swiss franc slumped as the greenback rebounded on growing expectations that the Federal Reserve will hike rates at least once and possibly twice by the end of the year. The major trades 0.3 percent up at 0.9933, having touched a high of 0.9992 on Thursday, it’s highest since May 21. FxWirePro's Hourly Swiss Franc Strength Index stood at 85.21 (Slightly Bullish) by 1100 GMT. On the higher side, near-term resistance is around 0.9977 (June 19 High) and any break above will take the pair to next level till 1.0018 (May 18 High). The near-term support is around 0.9880 and any close below that level will drag it till 0.9855.
Equities Recap
European shares slumped as concerns about German Chancellor Angela Merkel's coalition government weighed on investor sentiment.
The pan-European STOXX 600 index declined 0.9 percent at 376.32 points, while the FTSEurofirst 300 index plunged 0.8 percent to 1,475.47 points.
Britain's FTSE 100 trades 0.9 percent down at 7,567.37 points, while mid-cap FTSE 250 eased 0.9 percent to 20,643.21 points.
Germany's DAX fell 0.8 percent at 12,211.40 points; France's CAC 40 trades 1.2 percent lower at 5,258.24 points.
Commodities Recap
Crude oil prices declined after rising to multi-week high in the previous session as supplies from Saudi Arabia and Russia increased. International benchmark Brent crude was trading 0.6 percent down at $78.64 per barrel by 1032 GMT, having hit a high of $79.53 on Friday, its highest since May 31. U.S. West Texas Intermediate was trading 0.6 percent down at $73.85 a barrel, after rising as high as $74.43 on Friday, its highest since Nov. 2014.
Gold prices slumped as the dollar strengthened after last week's U.S. inflation data supported the Federal Reserve's outlook for future interest rate hikes. Spot gold was trading 0.4 percent lower at $1,248.40 an ounce as of 1034 GMT, having touched a low of $1,245.65 on Friday, its lowest since December 13. U.S. gold futures for August delivery were down 0.2 percent at $1,252.50 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.832 percent lower by 0.02 bps, while 5-year yield was 0.018 bps down at 2.712 percent.
The German 10-year bond yields dipped to 5-week lows, weighed down by political uncertainty in Germany, trade war fears and an expectation that the ECB could buy more long-dated bonds from next year. The yield on Germany's benchmark 10-year Bund yield fell to 0.289 percent,its lowest level in almost five weeks a
The Australian government bond futures edged higher, with the three-year bond contract up half a tick at 97.925. The 10-year contract rose 2 ticks to 97.3800. The New Zealand government bonds were mostly flat.
