Market Roundup
- EUR/USD 0.03%, USD/JPY 0.34%, GBP/USD -0.36%, EUR/GBP 0.35%
- DXY 0.13%, DAX 0.57%, FTSE 0.63%, Brent 0.22%, Gold -0.24%
- EZ Aug Inflation, Flash YY 1.5% vs 1.3%, 1.4% forecast
- EZ Aug Inflation Ex food & Enr Flash 1.3% vs 1.3%, 1.2% forecast
- EZ Jul Unemployment 9.1% vs 9.1%, 9.1% forecast
- Germany Jul Retail Sales mm Real -1.2% vs 1.1%, 1.3% revised, -0.4% forecast
- Germany Jul Retail Sales yy Real 2.7% vs 1.5%, 2.6% revised, 3.5% forecast
- Germany Aug Unemployment Chg SA -5k vs -9k, -6k forecast
- ECB unease over firmer euro risks slowing asset purchase exit –sources
- Strong Euro is worrying a growing number of ECB policymakers - sources
- U.S. bombers drill over Korean peninsula after latest N. Korea launch
- Global fuel market prices jump as Harvey's impact spreads beyond U.S. Gulf
- BoE's Saunders: Unwinding QE would not be first means of tightening policy
- BoJ’s Masai: Still far from CPI target but momentum building
- SNB's Maechler: Swiss franc weakening welcome but fragile
- U.S. oil prices set for worst month in over a year as floods hit demand
- Gold eases as dollar gains on strong economic data
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Commerce Department releases personal income figures for July, which are expected to rise 0.3 percent, after staying unchanged in the previous month.
- (0830 ET/1230 GMT) The U.S. Commerce Department releases the personal consumption expenditures (PCE) price index for the month of July. The index stood unchanged in the prior month while core PCE is likely to have increased 0.1 percent in July after edging up 0.1 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Personal spending is likely to rise 0.4 percent in the month of July, after edging up 0.1 percent in June.
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 3,000 to a seasonally adjusted 237,000 for the week ended Aug. 25 while continuing claims for the week ended Aug. 18 is expected to decline to 1.950 million from previous 1.954 million.
- (0830 ET/1230 GMT) Canada's gross domestic product is likely to rise 0.1 percent in June, after posting a growth of 0.6 percent in May.
- (1000 ET/1400 GMT) The National Association of Realtors is likely to report that U.S. pending home sales increased 0.5 percent in July after rising 1.5 percent in June.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending August 25.
- (1930 ET/2330 GMT) Australian Industry Group (AiG) releases its performance of manufacturing index for the month of August. The index stood at 56.0 in July.
Key Events Ahead
- (1130 ET/1530 GMT) Dallas Fed President Robert Kaplan will participate in a moderated Q&A session at 2017 Workforce Forum, hosted by the North American Strategy for Competitiveness Organization and Dallas County Community College District at Farmers Branch, Texas.
- (1430 ET/1830 GMT) Fed Trade operation 30-year Fannie Mae / Freddie Mac (max $2.05 bn)
FX Beat
DXY: The dollar gained versus its major peers as robust U.S. economic data supported investors’ expectations for the chances of a Fed rate hike in December. The greenback against a basket of currencies traded 0.3 percent up at 93.14, having touched a low of 91.62 on Tuesday, its lowest since Jan 2015. FxWirePro's Hourly Dollar Strength Index stood at 157.47 (Highly Bullish) by 1000 GMT.
EUR/USD: The euro declined, hitting a 6-day low as the greenback continued to gain upward momentum across the board. Investors seem to have ignored better-than-expected August Euro zone inflation data, which rose to its highest rate in four months. The European currency traded 0.2 percent down at 1.1854, having touched a high of 1.2070 on Tuesday, its highest since Dec. 2014. FxWirePro's Hourly Euro Strength Index stood at -4.50 (Neutral) by 1000 GMT. The near term intraday support is around 1.18450 (200- H MA) and any break below will drag the pair down till 1.1800/1.1775. On the higher side, 1.1912 (hourly Kijun-Sen) will be acting as near term intraday resistance and any break above will take it till 1.1934/1.2000/1.2070 (161.8% retracement).
USD/JPY: The dollar rallied, extending gains for the fourth straight session, as easing geopolitical tensions and improving investors' risk appetite undermined the Japanese Yen's safe-haven appeal. Moreover, yesterday's upbeat ADP report and revised U.S. GDP growth figures also provided further support to the pair. The major was trading 0.3 percent up at 110.59, having hit a high of 110.67 earlier, its highest since Aug. 16. FxWirePro's Hourly Yen Strength Index stood at -94.04 (Slightly Bearish) by 1000 GMT. On the lower side, any break below 108 confirms minor weakness, a decline till 106 likely. The pair is facing minor resistance at 110.67 (55- day EMA) and any convincing break above will take the pair till 111.15 (100- day MA)/112.
GBP/USD: Sterling tumbled to a near 1-week low against the dollar as concerns over the direction of Brexit negotiations weighed heavily on the British pound. Investors ignored supportive comments from BoE policymaker Michael Saunders that interest rates need to rise soon, as attention remained on U.S. economic data for next direction. Sterling traded 0.4 percent down at 1.2874, having hit a high of 1.2978 on Tuesday, its highest since August 14. FxWirePro's Hourly Sterling Strength Index stood at 93.82 (Slightly Bullish) by 1000 GMT. The near term resistance is around 1.2938 and any break above will take the pair to next level till 1.29785 and 1.3000/1.3030. On the lower side, near term support stands at 1.2870 and any break below will drag it down till 1.2840 (61.8% retracement)/1.2800. Against the euro, the pound was trading 0.1 percent down at 92.02 pence, having hit a multi-month low of 93.06 pence earlier in the week.
USD/CHF: The Swiss franc fell to a 1-week low as the greenback against a basket of currencies rallied on the back of the robust macro data reading from the U.S. The major trades 0.3 percent up at 0.9659, having touched a high of 0.9673 earlier, it’s highest since Aug. 23. FxWirePro's Hourly Swiss Franc Strength Index stood at 52.57 (Bullish) by 1000 GMT. The near term resistance is around 0.9645 (61.8% retracement of 0.97730 and 0.94285). On the lower side, 0.9570 will be acting as major intraday support and any break below will drag the pair down till 0.9530/0.9500.
AUD/USD: The Australian dollar slumped to a 1-week low as persistent U.S. dollar buying interest, coupled with cautious tone amid geopolitical tensions involving North Korea weakened the bid tone around the major. The Aussie trades 0.1 percent down at 0.7895, having hit a high of 0.7995 the prior session, it’s strongest since Aug. 1. FxWirePro's Hourly Aussie Strength Index stood at -64.09 (Bearish) by 1000 GMT. On the lower side, near term support is around 0.7875 (61.8% retracement) and any break below will drag the pair till 0.7800. The near term resistance is around 0.8070 and any break above targets 0.8100/0.8150.
Equities Recap
European shares rose as upbeat Chinese and U.S. economic data boosted market sentiment, while the greenback continued to gain on the back of robust U.S. economic data.
The pan-European STOXX 600 index gained 0.6 percent to 373.31 points, while the FTSEurofirst 300 index advanced 0.6 percent to 1,467.38 points.
Britain's FTSE 100 trades 0.7 percent up at 7,413.23 points, while mid-cap FTSE 250 rallied 0.6 percent to 19,727.37 points.
Germany's DAX rose 0.6 percent at 12,071.93 points; France's CAC 40 trades 0.6 percent higher at 5,086.03 points.
Commodities Recap
Crude oil prices rose, rebounding from multi-week lows, however, were on track to post the steepest monthly losses in more than a year as flooding from storm Harvey knocked out almost a quarter of U.S. refineries. International benchmark Brent crude was trading 0.5 percent up at $50.89 per barrel by 1001 GMT, having hit a low of $50.53 the prior session, its weakest since Aug. 17. U.S. West Texas Intermediate was trading 0.3 percent up at $46.08 a barrel, after falling as low as $45.57 earlier, its lowest since Jul. 24.
Gold prices declined, extending losses for the third straight session, as the dollar gained on positive economic data from China and the United States. Spot gold was trading 0.2 percent down at $1,305.60 per ounce at 1004 GMT, having hit the highest since Nov. 9 at 1,325.89 on Tuesday and was on track for a near 3 percent monthly gain. U.S. gold futures for December delivery eased 0.4 percent to $1,308.50.
Treasuries Recap
The U.S. Treasuries steadied as investors wait to watch the country’s initial jobless claims, scheduled to be released today by 12:30GMT. The yield on the benchmark 10-year Treasury hovered around 2.15 percent, the super-long 30-year bond yields tad higher at 2.75 percent and the yield on short-term 2-year note traded flat at 1.33 percent.
The UK gilts lost strength Thursday as investors remained cautious ahead of the release of manufacturing PMI for the month of August, scheduled on September 1 by 08:30GMT. The yield on the benchmark 10-year gilts, hovered around 1.04 percent, the super-long 30-year bond yields remained flat at 1.70 percent and the yield on the short-term 2-year too remained steady at 0.18 percent.
The German government bonds traded flat Thursday after the country’s unemployment rate remained unchanged in August, with the total number of jobless citizens declining, albeit lower than what markets had anticipated. The German 10-year bond yields rose nearly 1 basis point to 0.37 percent, the yield on 30-year note hovered around 1.12 percent and the yield on short-term 2-year traded flat at -0.75 percent.
The Japanese government bonds remained flat Thursday after the country’s industrial production for the month of July failed to revive markets. The yield on the benchmark 10-year Treasury note hovered around 0.01 percent, the yield on long-term 30-year flat at 1.04 percent and the yield on short-term 2-year traded tad nearly 1 basis point lower at -0.15 percent.
The New Zealand bonds rebounded at the time of closing Thursday amid a silent trading session that witnessed data of little economic significance. Also, decline in the country’s business confidence and inflation expectations supported bond prices. At the time of closing, the yield on the benchmark 10-year Treasury note slid 1 basis point to 2.92 percent, the yield on 7-year note also fell 1 basis point to 2.76 percent and the yield on short-term 2-year too ended 1 basis point lower at 2.05 percent.
The Australian bonds sharply rallied, tracking firm performance in the U.S. Treasuries after the country’s second-quarter gross domestic product (GDP) cheered markets, adding to hopes of an interest rate hike in December although inflation remains below consensus. The yield on the benchmark 10-year Treasury note jumped 7 basis points to 2.74 percent, the yield on 15-year note also surged 7 basis points to 3.03 percent and the yield on short-term 2-year also traded 3 basis points higher at 1.90 percent.
