Market Roundup
•US Jun Chicago Fed National Activity-0.19, 0.01 previous
•French 3-Month BTF Auction 0.002%,-0.272% previous
•French 6-Month BTF Auction 0.186%,0.076% previous
•French 12-Month BTF Auction 0.457%,0.545% previous
•Jul Belgium NBB Business Climate -2.8, -1.5 forecast,-1.8 previous
•US Jul Dallas Fed Mfg Business Index -22.6, -17.7 previous
•US 3-Month Bill Auction2.520%,2.470% previous
•US 6-Month Bill Auction 2.920%, 2.910% previous
•US 2-Year Note Auction 3.015%,2.060% previous
Looking Ahead - Economic Data (GMT)
• 05:00 Japan BoJ Core CPI (YoY) 1.5% previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro strengthened on Monday as risk appetite returned to currency markets and investors weighed up the possible impact of an expected U.S. rate hike this week. The biggest factor influencing market moment this week is the anticipation of the Fed meeting, with U.S. second-quarter GDP numbers on Thursday also likely to be a significant driver .The U.S. Federal Reserve has signalled a 75 basis-point rate hike at its July 26-27 meeting, although data last week showing inflation hit 9.1% year-on-year in June raised the possibility of a larger 100 bps hike later this year. The euro was up 0.1% at $1.02195. Immediate resistance can be seen at 1.0256(38.2%fib), an upside break can trigger rise towards 1.0328(30DMA).On the downside, immediate support is seen at 1.0132(14DMA), a break below could take the pair towards 1.0081(23.6%fib).
GBP/USD: The pound strengthened against the dollar on Monday as riskier currencies like pound gained before a widely expected U.S. interest rate hike this week. Investors widely expect the Fed to raise interest rates by another 75 bps when it concludes a two-day policy meeting on Wednesday. Britain's businesses grew at their slowest pace in 17 months in July and inflation pressures eased, according to an industry survey last week. Although consumer spending and businesses are struggling, the Bank of England is widely expected to raise interest rates by 50 bps at a policy meeting on Aug. 4. Immediate resistance can be seen at 1.2188(38.2%fib), an upside break can trigger rise towards 1.2219(38.2%fib).On the downside, immediate support is seen at 1.1990(5DMA), a break below could take the pair towards 1.1958(23.6%fib).
USD/CAD: The Canadian dollar strengthened against the greenback on a surge in oil prices and weaker greenback boosted Canadian dollar. Oil prices rose investors seesawed between supply fears and bets rising U.S. interest rates could weaken demand. U.S. crude settled up 2.11% at $96.70 per barrel and Brent finished at $105.15, up 1.9% on the day. The Canadian dollar was last trading 0.1% higher at 1.2822 to the greenback .Immediate resistance can be seen at 1.2903 (38.2%fib), an upside break can trigger rise towards 1.2939(21DMA).On the downside, immediate support is seen at 1.2821 (50%fib), a break below could take the pair towards 1.2736(61.8%fib).
USD/JPY: The dollar dipped against the Japanese yen on Monday as investors weighed the implications of a rate hike by the U.S. Federal Reserve in an economy that may be on the verge of a recession. The central bank is widely expected to raise interest rates by 75 basis points at the conclusion of its policy meeting on Wednesday. A hike of that magnitude would effectively close out pandemic-era support for the economy . Recent data has shown signs of an economic slowdown while inflation remains stubbornly high, with claims for jobless benefits rising to its highest in eight months last week and regional manufacturing gauges slumping.Strong resistance can be seen at 136.77 (21DMA), an upside break can trigger rise towards 137.46(23.6%fib).On the downside, immediate support is seen at 135.54 (38.2%fib), a break below could take the pair towards 135.00 (Psychological level).
Equities Recap
European stocks turned in a mixed performance on Monday with investors digesting a slew of earnings announcements and the latest batch of economic data, and looking ahead to the Federal Reserve's monetary policy announcement, due on Wednesday.
The UK's benchmark FTSE 100 closed up by 0.41 percent, Germany's Dax ended down by 0.33 percent, and France’s CAC finished the up by 0.33 percent.
The S&P 500 see-sawed on Monday and ended close to unchanged as investors girded for an expected rate hike at a Federal Reserve meeting this week and earnings from several large-cap growth companies..
Dow Jones closed up by 0.28 percent, S&P 500 ended up 0.13 percent, Nasdaq finished the day down by 0.43 percent.
Treasuries Recap
U.S. Treasury yields edged slightly higher on Monday as investors awaited the Federal Reserve's likely 75 basis point interest rate increase later this week amid growing concerns about an economic slowdown and the potential for recession.
The two-year Treasury yield rose 3.8 basis points to 3.029%, while the yield on the 10-year note was up 6.1 basis points at 2.842%.
Commodities Recap
Oil rose on Monday on expectations Russia’s reduction in natural gas supply to Europe could encourage a switch to crude, though concerns over weakening fuel demand because of an expected increase in U.S. interest rates limited gains.
Brent crude futures for September settlement climbed 45 cents, or 0.4%, to $105.60 a barrel by 0112 GMT, following a 1.9% gain in the previous day.
U.S. West Texas Intermediate (WTI) crude futures for September delivery increased 34 cents, or 0.4%, to $97.04 a barrel, having gained 2.1% on Monday.
Gold prices gave up initial gains to slip on Monday as U.S. Treasury yields edged back up, while investors positioned themselves for an expected 75-basis-point interest rate hike by the Federal Reserve later this week.
Spot gold was down 0.4% to $1,719.49 per ounce by 1:46 p.m. ET (1746 GMT). U.S. gold futures settled 0.5% lower at $1,719.10.
