Market Roundup
EUR/USD -0.23%, USD/JPY +0.09%, GBP/USD +0.08%, EUR/GBP -0.35%
DXY +0.07%, DAX +0.53%, FTSE +0.85%, Brent -0.06%, Gold -0.12%
EZ Q2 GDP flash prelim y/y, 2.1% vs forecast 2.1%, previous 1.9%
EZ Jul Markit final PMI, 56.6% vs forecast 56.8%, previous 56.8%
Great Britain Jul Markit/CIPS manufacturing PMI, 55.1 vs forecast 55.4, previous 54.3 revised 54.2
Great Britain Jul Nationwide house price y/y, 2.9% vs forecast 2.7%, previous 3.1%
Germany Jul Markit/BME manufacturing PMI, 58.1 vs forecast 58.3, previous 58.3
Germany Jul Unemployment rate SA, 5.7% vs forecast 5.7%, previous 5.7%
China factory activity accelerates in July on strong export orders - Caixin PMI
U.S. small business borrowing highest in nearly two years
Japan foreign direct investment jumped to record $169.6 bln in ’16 – Nikkei
Japan April-June GDP on track for 2.6% annual pace – Nikkei
Japan July manufacturing PMI – final 52.1, 8-month low, flash 52.2, June final 52.4
Oil hits 2-month high, further U.S. inventory drop seen
Gold dips on profit taking after touching 7-week high
Economic Data Ahead
(0830 ET/1230 GMT) The U.S. Commerce Department releases personal income figures for June, which is expected to rise 0.4 percent, after gaining 0.4 percent 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 June. The index is expected to stay unchanged, while core PCE is likely to have increased 0.1 percent in June after edging up 0.1 percent in the previous month.
(0830 ET/1230 GMT) The U.S. Personal spending is likely to edge up 0.1 percent in the month of June, after a similar rise in May.
(0900 ET/1300 GMT) Brazil's industrial output is expected to decline 0.4 percent in June, compared with a 0.8 percent rise in May.
(0930 ET/1330 GMT) Financial firm Markit releases will release Canada's Manufacturing PMI for the Month of July. The seasonally adjusted index had declined to 54.7 in the prior month.
(0945 ET/1345 GMT) Financial firm Markit releases U.S. Manufacturing PMI for the month of July. The index is likely to show a final reading of 53.2 after posting similar gains 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 56.5 in July from a reading of 57.8 in June.
(1000 ET/1400 GMT) The Commerce Department is likely to report that U.S. construction spending increased 0.4 percent in June after remaining flat in the previous month.
(1030 ET/1430 GMT) Financial firm Markit releases Mexico Manufacturing Purchasing Managers' index for the month of July.
(1400 ET/1800 GMT) Brazil is likely to post a trade surplus of $6.39 billion in July after recording a trade deficit of 0.152 billion in the previous month.
N/A Autodata Corp is expected to report that U.S. auto sales figures rose to an annualized rate of 16.75 million units in July from 16.51 million units in June.
(1630 ET/2030 GMT) API reports its weekly crude oil stock.
(1745 ET/2145 GMT) The Statistics New Zealand reports its unemployment rate for the second quarter. The indicator stood at 4.9 percent in the first quarter.
(1950 ET/2350 GMT) The British Retail Consortium (BRC) will report its Like-for-Like Retail Sales for the month of July. The index fell at an annualized rate of 0.3 percent in June.
Key Events Ahead
(1145 ET/1545 GMT) FedTrade operation 30-year Ginnie Mae (max $1.375 bn)
FX Beat
DXY: The dollar rebounded versus most of its major peers following a rise in the U.S. Treasury yields. The greenback against a basket of currencies traded 0.1 percent up at 92.94, having touched a low of 92.78 on Monday, it’s lowest since May 3, 2016. FxWirePro's Hourly Dollar Strength Index stood at -30.44 (Neutral) by 1000 GMT.
EUR/USD: The euro declined, retreating from a 2-1/2 year high hit in the previous session, despite Eurozone's advanced GDP figures for the second quarter showing the economy expanded 0.6 percent in the April-June period and 2.1 percent on an annualized basis. The European currency traded 0.3 percent down at 1.1809, having touched a high of 1.1845 on Monday, its highest since Jan 14, 2015. FxWirePro's Hourly Euro Strength Index stood at 29.48 (Neutral) by 1000 GMT. The pair has closed well above major resistance 55- month EMA at 1.17650 and any close above this level confirms minor trend reversal, a jump till 1.2515 (38.2% retracement of 1.6039 (2008 high) to 1.0339). On the lower side, 1.17500 will be acting as near term support and any break below will drag it down till 1.16500 (Jul 27th low)/1.16125 (Jul 26th 2017 low).
USD/JPY: The dollar rebounded after falling to a 1-1/2 month low in early trade as the yield on the benchmark 10-year Treasury rose 1/2 basis point to 2.29 percent. Investors now await the U.S. core personal consumption expenditures (PCE) price index and ISM manufacturing PMI for further momentum. The major was trading 0.2 percent up at 110.45, having hit a low of 110.00 earlier, its lowest since Jun 15. FxWirePro's Hourly Yen Strength Index stood at 44.99 (Neutral) by 1000 GMT. On the lower side, the pair is facing major support at 110 and any break below will drag the pair down till 108. The near term resistance is around 112 (21- day EMA) and any break above targets 112.98/114.
GBP/USD: Sterling advanced to a fresh 10-1/2 month high above the 1.3200 handle after data showed British manufacturing growth recovered in July from a seven-month low. Markit/CIPS UK Manufacturing Purchasing Managers' Index rose to 55.1 from a downwardly revised 54.2 in June, surpassing consensus of 54.2. Sterling traded up at 1.3214, having hit a high of 1.3239 earlier, its highest since Sept. 16. FxWirePro's Hourly Sterling Strength Index stood at 64.68 (Bullish) by 1000 GMT. On the higher side, the pair is facing major resistance 1.3245 (161.8% retracement of 1.31260 and 1.29343) and break above targets 1.3300/1.3350. The downside remains capped by 10- day MA at 1.3060 and any break below will drag it till 1.3000/1.29435 (61.8% fibo). Against the euro, the pound traded 0.2 percent up at 89.41 pence, having hit a 1-week low of 89.75 the prior day.
USD/CHF: The Swiss franc rose, extending previous session gains, as political turmoil in Washington strengthened safe-haven assets. The major trades 0.1 percent down at 0.9657, having touched a high of 0.9726 on Friday, it’s highest since Jun. 27. FxWirePro's Hourly Swiss Franc Strength Index stood at 26.29 (Neutral) by 1000 GMT. The major trend line resistance is around 0.97250 and any close above will take the pair till 0.975 (89- EMA)/0.9808 (May 30th high)/0.9940 (200- day MA). On the lower side, any further bearish continuation happens only below 0.9437 level and break below will drag it down till 0.92835 (161.8% retracement of 0.94385 and 0.97210).
AUD/USD: The Australian dollar eased below the 0.8000 handle following weakness in the crude oil prices and prevalent positive tone around the U.S. Treasury bond yields. The Aussie trades 0.2 percent down at 0.7986, having hit a high of 0.8065 on Thursday, it’s highest since May 15, 2015. FxWirePro's Hourly Aussie Strength Index stood at 0.74 (Neutral) by 1000 GMT. On the lower side, near term support is around 0.7955 (10- day MA) and any break below will drag the pair till 0.7875 (38.2% retracement of 0.75711 and 0.80656)/0.7802 (21- day EMA). The near term resistance is around 0.8070 and any break above targets 0.8100/0.8150.
Equities Recap
European shares rose, boosted by strong corporate earnings reports, while the dollar against a basket of currencies rebounded following an uptick in the U.S. Treasury yields
The pan-European STOXX 600 index rallied 0.3 percent to 379.61 points, while the FTSEurofirst 300 index rose 0.5 percent to 1,492.56 points.
Britain's FTSE 100 trades 0.7 percent up at 7,427.30 points, while mid-cap FTSE 250 gained 0.4 percent to 19,865.99 points.
Germany's DAX rose 0.5 percent at 12,182.57 points; France's CAC 40 trades 0.5 percent higher at 5,121.24 points.
Commodities Recap
Crude oil prices declined after hitting two month highs on the back of signs that a persistent supply glut is starting to ease amid strong demand and OPEC-led production curbs. International benchmark Brent crude was trading 0.1 percent down at $52.59 per barrel by 1036 GMT, having hit a high of $52.87 on Monday, its strongest since May 25. U.S. West Texas Intermediate was trading 0.1 percent lower at $50.12 a barrel, after rising as high as $50.40 earlier, its strongest since May 25.
Gold prices edged down, hovering away from the highest levels in almost seven weeks as the dollar rose and investors locked in profits from the safe-haven metal's rally last month. Spot gold declined 0.2 percent to $1,265.93 per ounce by 1038 GMT, having hit a high of $1,270.93 the prior day, its highest since June 14. U.S. gold futures GCcv1 for August were unchanged at $1,266.60 per ounce.
Treasuries Recap
The U.S. Treasuries traded tad lower as investors wait to watch the country’s ISM manufacturing PMI, scheduled to be released later today, besides the ADP non-farm employment data for July, due on August 2. The yield on the benchmark 10-year Treasury, rose 1/2 basis point to 2.29 percent, the super-long 30-year bond yields flat at 2.90 percent and the yield on short-term 2-year note hovered around 1.35 percent.
The UK gilts rallied Tuesday after investors largely shrugged off the upbeat higher-than-expected reading of July’s manufacturing PMI. Also, investors are now eyeing the Bank of England’s (BoE) monetary policy decision, scheduled to be unveiled on August 3 by 11:00GMT for further direction to the debt market. The yield on the benchmark 10-year gilts, fell 1-1/2 basis point to 1.21 percent, the super-long 30-year bond yields slumped 2-1/2 basis points to 1.83 percent and the yield on the short-term 2-year traded nearly 1 basis point lower at 0.26 percent.
The Eurozone periphery bonds gained after the region’s gross domestic product (GDP) for the second-quarter of this year failed to satisfy markets, missing expectations. However, it remained higher than the previous Q1 reading and above the European Central Bank’s (ECB) 2-3 percent target range. The benchmark German 10-year bond yields, slipped nearly 1 basis point to 0.53 percent, the French 10-year bond yields fell 1-1/2 basis points to 0.79 percent, Irish 10-year bond yields slumped 3-1/2 basis points to 0.81 percent, Italian down by 2 basis points to 2.07 percent, Netherlands 10-year bond yields also traded nearly 2 basis points lower at 0.64 percent, Portuguese equivalents slid 1 basis point to 2.85 percent and the Spanish 10-year yields traded 1-1/2 basis points lower at 1.47 percent.
The Japanese bonds traded nearly flat Tuesday as markets observed little trading activity in the light of no important economic data or events. Also, the BoJ maintained bond buying programme plan unchanged. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat 0.079 percent, the yield on long-term 40-year note up 1/2 basis point to 1.10 percent and the yield on short-term 3-year traded steady at -0.111 percent.
The New Zealand bonds slumped at the time of closing Tuesday on expectations that the country’s unemployment rate for the second quarter of this year will come in lower than the previous reading in Q1. At the time of closing, the yield on the benchmark 10-year bond, which moves inversely to its price, jumped to 3-week high, by 5 basis points to 3.06 percent, the yield on 7-year note jumped 4-1/2 basis points to 2.89 percent while the yield on short-term 2-year note ended 1/2 basis point higher at 2.12 percent.
The Australian bonds slumped Tuesday after the RBA remained on hold at its Monetary Policy decision today, remaining slightly optimistic in its outlook for the economy, while leaving its key interest rate unchanged at record low 1.50 percent. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 3 basis points to 2.725 percent, the yield on 15-year note also jumped 3 basis points to 3.026 percent and the yield on short-term 2-year traded nearly 1 basis point higher at 1.821 percent.
