Market Roundup
• French 6-Month BTF Auction 3.245%, 3.456% previous
• French 3-Month BTF Auction 3.485% ,3.610% previous
• French 12-Month BTF Auction 2.924% ,3.252% previous
•US Jul Services PMI 55.0 , 56.0 forecast,55.3 previous
• US Jul S&P Global Composite PMI 54.3, 55.0 forecast,54.8 previous
•US Jul ISM Non-Manufacturing Business Activity 54.5 ,49.6 previous
•US Jul CB Employment Trends Index 109.61 ,110.27 previous
•US Jul ISM Non-Manufacturing PMI 51.4, 51.4 forecast,48.8 previous
Looking Ahead Economic Data(GMT)
•01:30 Australia Jun Building Approvals (MoM) -6.5% forecast,5.5% previous
•04:30 Australia RBA Interest Rate Decision 4.35% forecast,4.35% previous
Looking Ahead Events And Other Releases(GMT)
•04:30 Australia RBA Rate Statement
•04:30 Australia RBA Monetary Policy Statement
Currency Forecast
EUR/USD: The euro rose on Monday as fears that the U.S. could be heading towards a recession sent investors dashing away from risk assets.Data on Friday showed that U.S. job growth in July fell short of expectations, with the unemployment rate rising to 4.3%, pointing to possible weakness in the labour market and greater vulnerability to recession. Traders are pricing a more than 70% chance of the U.S. central bank lowering rates by 50 basis points in September, compared with an 11.5% chance a week earlier, according to the CME FedWatch tool. On the data front, growth in euro zone business activity stalled last month Purchasing Managers' Index for the currency union fell to 50.2 in July from 50.9 in June.Growth in Germany's services sector slowed for the second consecutive month in July. Immediate resistance can be seen at 1.0977(23.6%fib), an upside break can trigger rise towards 1.1000(Psychological level).On the downside, immediate support is seen at 1.0903(38.2%fib), a break below could take the pair towards 1.0839(50%fib).
GBP/USD: The pound eased on Monday as mounting concern over the possibility of a U.S. recession sent currency investors fleeing for the comparative safety of the Swiss franc and the euro.A series of data last week, culminating in Friday's U.S. monthly employment report, has ignited concern that the world's largest economy may be slowing more quickly than many had expected. Traders are now placing a 90% chance that the Federal Reserve will cut interest rates by half a point in September to ward off further economic deterioration. Sterling was down 0.3% on Monday at $1.2767 and down 0.6% against the euro at 85.72 pence. Immediate resistance can be seen at 1.2810(38.2%fib), an upside break can trigger rise towards 1.2930(23.6%fib).On the downside, immediate support is seen at 1.2713(50%fib), a break below could take the pair towards 1.2612(61.8%fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Monday as traders scrambled to hedge against market volatility during a global selloff fueled by U.S. recession fears. Markets were impacted by Friday's weak U.S. July payrolls report, which showed the unemployment rate rising to 4.3%, fueling concerns that the world's largest economy may be heading for a recession.Oil prices settled lower on Monday, as recession fears led to demand concerns, but declines were buffered by worries that escalating Middle East conflict could hit crude supplies.The loonie was trading 0.16% higher at 1.3804 to the greenback after trading in a range of 1.3947 to 1.3802. Immediate resistance can be seen at 1.3827 (38.2%fib), an upside break can trigger rise towards 1.3877(23.6%fib).On the downside, immediate support is seen at 1.3784(50%fib), a break below could take the pair towards 1.3750(50%fib).
USD/JPY: The dollar initially slipped against the yen on Monday but recovered some ground after data showed US service sector rebounds in July. U.S. services sector activity rebounded from a four-year low in July, driven by a resurgence in new orders and the first employment increase in six months. This recovery could ease recession fears triggered by last month's unemployment surge and the ongoing stock market sell-off. he Institute for Supply Management (ISM) said on Monday that its nonmanufacturing purchasing managers (PMI) index increased to 51.4 last month from 48.8 in June, which was the lowest level since May 2020. A PMI reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of the economy. Strong resistance can be seen at 143.93(38.2 %fib), an upside break can trigger rise towards 145.74 (50%fib). On the downside, immediate support is seen at 141.79(23.6%fib), a break below could take the pair towards 140.00 (Psychological level).
Equities Recap
The main European stocks index hit its lowest in over six months on Monday as fears of a slowdown in the world's largest economy knocked equities globally, with energy and utility stocks at the forefront of a broad-based market slide.
UK's benchmark FTSE 100 closed up by 2.04 percent, Germany's Dax ended down by 1.83 percent, France’s CAC finished the day down by 1.42 percent.
U.S. stocks ended with steep losses on Monday, leaving the Nasdaq and S&P 500 down at least 3% each as the market extended last week's sell-off amid U.S. recession worries and as Apple shares fell sharply on news that a big investor had cut its stake..
Dow Jones closed down by 2.60% percent, S&P 500 closed down by 3 .00% percent, Nasdaq settled down by 3.38% percent.
Commodities Recap
Gold fell more than 1% on Monday, caught in the slipstream of a global, wider market sell-off driven by mounting economic concerns, although analysts said this would be a temporary correction for the safe haven.
After dropping as much as 3.2% earlier in the session, spot gold pared some losses to trade 1.6% lower at $2,404.53 an ounce by 14:00 p.m. ET (1800 GMT).U.S. gold futures settled 1% lower at $2,444.4.
Oil fell in volatile trade on Monday as a selloff continued on global stock markets, but the slide was limited by fears Iran's retaliation for the assassination of a Hamas leader in Tehran may lead to a wider war in the Middle East.
Brent crude futures settled down 51 cents, or 0.66%, at $76.30 a barrel, with prices earlier trading around their lowest levels since January. U.S. West Texas Intermediate crude was down 58 cents, or 0.79%, at $72.94.
