Market Roundup
- EUR/USD 0.03%, USD/JPY 0.01%, GBP/USD 0.21%, EUR/GBP -0.21%
- DXY -0.04%, DAX 0.37%, FTSE 0.35%, Brent 0.73%, Gold 0.13%
- Germany Ifo Business Climate Aug 115.9 vs 116.0, 115.5 forecast
- Germany Ifo Current Conditions Aug 124.6 vs 125.4, 125.0 forecast
- Germany Ifo Expectations Aug 107.9 vs 107.3, 106.8 forecast
- Britain will not pay "a penny more" than it thinks right to leave EU - Johnson
- UK public's inflation expectations rise in August - Citi/YouGov
- Oil up as U.S. rigs and refineries brace for hurricane
- Gold steady ahead of speeches by Yellen, Draghi at Jackson Hole
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. durable goods orders are expected to have decreased 6.0 percent in July after rising 6.5 percent in June, while non-defense capital goods orders excluding aircraft are likely to have risen 0.3 percent after gaining 0.1 percent the prior month.
- (0900 ET/ 1300 GMT) Mexico is likely to report that unemployment rate gained 3.5 percent in July from a 3.3 percent rise in the previous month.
- (1000 ET/1400 GMT) Mexico's current account deficit is likely to have widened to $4.65 billionin the second quarter.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (0900 ET/1400 GMT) U.S. Federal Reserve Chair Janet Yellen will give a speech on "Financial Stability" before the Federal Reserve Bank of Kansas City Economic Symposium: "Fostering a Dynamic Global Economy" in Jackson Hole, Wyoming.
- (1400 ET/1900 GMT) European Central Bank President Mario Draghi will speak at the conference in Jackson Hole, Wyoming.
FX Beat
DXY: The dollar traded within narrow ranges across the board as investors refrained from placing big bets ahead of a meeting of central bankers in Jackson Hole, Wyoming. The greenback against a basket of currencies traded 0.1 percent down at 93.15, having touched a high of 94.15 last week; it’s highest since July 26. FxWirePro's Hourly Dollar Strength Index stood at -60.41 (Bearish) by 1000 GMT.
EUR/USD: The euro steadied, recovering early session losses as investors appeared optimistic that the ECB Chief Draghi could hint towards QE tapering plans announcement during his Jackson Hole speech. The European currency traded flat at 1.1805, having touched a high of 1.1828 on Monday, its highest since Aug. 14. FxWirePro's Hourly Euro Strength Index stood at 63.38 (Bullish) by 1000 GMT. Immediate resistance is located at 1.1838 (Aug 14 High), a break above targets 1.1889. On the downside, support is seen at 1.1720 (61.8% retracement 1.1370 and 1.1909), a break below could drag it near 1.1638 (50.0% retracement 1.1370 and 1.1909).
USD/JPY: The dollar edged up, extending previous session gains as traders bet Federal Reserve Chief Janet Yellen would promise to push forward with plans for tighter monetary policy. The European currency traded 0.1 percent up at 109.63, having hit a low of 108.60 last week, its lowest since Apr. 19 2016. FxWirePro's Hourly Yen Strength Index stood at -66.03 (Slightly Bearish) by 1000 GMT. Immediate resistance is located at 109.99 (61.8% retracement of 112.19 and 108.60), a break above targets 110.41 (50.0% retracement of 112.19 and 108.80). On the downside, support is seen at 109.25(5-DMA), a break below could take it near 108.60 (August 18 Low).
GBP/USD: Sterling rebounded after falling to a two-month low against the dollar in the previous session, as investors’ seeked for clues from the much-awaited Jackson Hole Symposium. The major traded 0.3 percent up at 1.2839, having hit a low of 1.2773 the day before, its lowest since June 26. FxWirePro's Hourly Sterling Strength Index stood at 27.74 (Neutral) by 1000 GMT. Immediate resistance is located at 1.2850, a break above could take it near 1.2878 (10-DMA). On the downside, support is seen at 1.2750, a break below targets 1.2722 (June 19 Low). Against the euro, the pound was trading 0.1 percent up at 92.08 pence, having hit a 10-1/2 month low of 92.36 pence on Wednesday.
USD/CHF: The Swiss franc rallied, extending gains for the third straight session, as investors remained cautious ahead of speeches by central bank heads at Jackson Hole Symposium. The major trades 0.2 percent down at 0.9633, having touched a high of 0.9765 last week, it’s highest since Aug. 8. FxWirePro's Hourly Swiss Franc Strength Index stood at 121.54 (Neutral) by 1000 GMT. The pair is facing near term support at 0.9580 and any close below will drag the pair till 0.9550/0.9500/0.94370. On the higher side, upside capped at 0.9783 (38.2% retracement of 1.03432 and 0.94385) and any break above will take the pair till 0.9845/0.9900.
AUD/USD: The Australian dollar rose, halting its 3-day losing streak as a subdued greenback price action coupled with the prevalent positive trading sentiment around commodity space, especially copper underpinned the bid tone around the major. The Aussie trades 0.1 percent up at 0.7909, having hit a high of 0.7962 last week, it’s strongest since Aug. 04. FxWirePro's Hourly Aussie Strength Index stood at 14.76 (Neutral) by 1000 GMT. Immediate support is seen at 0.7869 (August 18 Low), a break below targets 0.7807. On the upside, resistance is located at 0.7934 (Aug 16 High), a break above could take it near 0.7980.
Equities Recap
European shares rose, supported by its heavyweight mining contingent, while the dollar eased against the yen ahead of speeches by Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi at the Jackson Hole, Wyoming, symposium.
The pan-European STOXX 600 index advanced 0.2 percent to 375.35 points, while the FTSEurofirst 300 index climbed 0.2 percent to 1,475.22 points.
Britain's FTSE 100 trades 0.3 percent up at 7,428.04 points, while mid-cap FTSE 250 gained 0.06 percent to 19,721.35 points.
Germany's DAX rose 0.2 percent at 12,208.60 points; France's CAC 40 trades 0.1 percent higher at 5,116.77 points.
Commodities Recap
Crude oil prices rose, recovering from previous session losses, as the U.S. petroleum industry braced for Hurricane Harvey to hit the U.S. mainland in more than a decade. International benchmark Brent crude was trading 0.6 percent up at $52.42 per barrel by 0937 GMT, having hit a high of $52.93 last week, its strongest since Aug. 8. U.S. West Texas Intermediate was trading 0.4 percent up at $47.77 a barrel, after rising as high as $48.71 last week, its highest since Aug. 14.
Gold prices gained, while the greenback consolidated within narrow ranges, with investors waiting for cues from speeches by U.S. Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi at a gathering of central bankers in the United States. Spot gold rose 0.2 percent at $1,287.34 an ounce by 0943 GMT, after easing nearly 0.3 percent in the previous session. U.S. gold futures for December delivery were flat at $1,291.80 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.197 percent higher by 0.003 bps, while 5-year yield was 0.009 bps up at 1.783 percent.
The Portugal's 10-year bond yield rose to its highest level in almost a month and was set for its biggest weekly jump since January, as renewed focus on the ECB policy outlook weakened sentiment towards lower-rated euro zone debt markets. The Portugal's 10-year bond yield rose 4.5 basis points to 2.90 percent and was set for its biggest weekly rise since January, with a jump of 13 bps. That pushed the gap over top-rated German bond yields to around 250 bps, the widest in five weeks. Italian and Spanish bond yields were set for their biggest weekly rise in seven weeks, with Spain's 10-year bond yield climbing more than 4 bps to 1.52 percent
The Japanese government bond market retained its bullish momentum and edged up. The benchmark 10-year JGB yield declined by half a basis point to 0.015 percent, its lowest since May 2. The sorter-dated JGB maturities outperformed, with the five-year yield dropping 1.5 basis points to a 3-1/2-month low of minus 0.135 percent. The 30-year yield nudged up half a basis point to 0.825 percent, pulling away from a near two-month low of 0.815 percent set on Thursday.
The Australian government bond futures slipped, with the three-year bond contract down 2 ticks at 98.010. The 10-year contract was off 1 tick to 97.3600.
The New Zealand government bonds gained, sending yields 5 basis points lower.
The Canadian government bond prices were lower across the maturity curve, with the two-year price down 1 Canadian cent to yield 1.266 percent and the benchmark 10-year falling 4 Canadian cents to yield 1.886 percent. The Canada-U.S. two-year bond spread stood at -6.5 basis points, while the 10-year spread stood at -30.9 basis points.
