Market Roundup
- US ISM Non-Manufacturing PMI Jul 60.3, f/c 56.2, 56-previous.
- US ISM Non-Manufacturing Employment Index Jul 59.6, 52.7-previous.
- US ADP National Employment Jul 185.0k, f/c 215k, +229k-previous, below low f/c at 190k.
- Fed's Powell 'time is clearly coming' to raise rates, very focused on data b/w now and mid-Sept (CNBC).
- Brazil's Levy says gov't to tackle fiscal imbalances, private sector should have larger role in infrastructure.
- Oil falls in NY afternoon despite large drawdown.
- Brazil Markit Services PMI Jul 39.1, 39.9-previous.
Looking Ahead - Economic Data (GMT)
- 23:50 Japan Foreign Bond Investment w/e -21.7b-previous
- 23:50 Japan Foreign Invest JP Stock w/e -82.1b-previous
- 05:00 Japan Coincident Indicator MM* Jun -1.8-previous
- 05:00 Japan Leading Indicator* Jun -0.2-previous
- 01:30 Australia Employment* Jul f/c 10.0k, 7.3k-previous
- 01:30 Australia Full Time Employment* Jul 24.5k-previous
- 01:30 Australia Participation Rate* Jul f/c 64.8%, 64.80%-previous
- 01:30 Australia Unemployment Rate* Jul f/c 6%, 6.00%-previous
Looking Ahead - Events, Other Releases (GMT)
- --:-- Japan Bank of Japan monetary policy meeting (to Aug. 7)
Currency Summaries
EUR/USD is supported around 1.0820 levels and currently trading at 1.0906 levels. It has made session high at 1.0914 and lows at 1.0848 levels. The dollar rose against euro on Wednesday as data showed the U.S. services sector expanded at its fastest pace in 10 years, supporting the view the Federal Reserve would raise interest rates in September. The surprisingly strong reading on industries that account for more than two-thirds of the U.S. economy aligned with comments from Atlanta Fed Chief Dennis Lockhart published on Tuesday. In an interview with the Wall Street Journal, Lockhart expressed support for the end of the Fed's near zero rate policy next month. Meanwhile, in the late hours of New York session, the greenback dialed back from its initial gains against euro to trade at 1.0906 levels, after Fed Governor Jerome Powell told CNBC television he has not decided on a rate 'lift-off' in September. To the upside, immediate resistance can be seen at 1.0915. To the downside, immediate support level is located at 1.0870 levels.
GBP/USD is supported around 1.5520 levels and currently trading at 1.5603 levels. It has made session high at 1.5645 and low at 1.5588 levels. Sterling gained ground against the dollar on Wednesday, bolstered by bets that a "Super Thursday" of Bank of England publications would take it one step closer to a rise in interest rates. The main driver of afternoon trade in London was U.S. data which damaged the dollar and the case for the Federal Reserve to raise its own rates next month. On Tuesday Atlanta Federal Reserve chief Dennis Lockhart bolstered expectations that the Fed might move on rates as early as September, sending sterling around 1 cent lower against the dollar. But jobs numbers on Wednesday ran in the opposite direction, the pound had recovered the bulk of the previous session's losses and was a third of a percent higher on the day at $1.5610. To the upside, immediate resistance can be seen at 1.5648. To the downside, immediate support level is located at 1.5565 levels.
USD/JPY is supported around 124.00 levels and currently trading at 124.84 levels. It has made session high at 125.00 and low at 124.25 levels. The dollar rose to a two-month high against the Japanese yen on Wednesday, as a stronger-than-forecast private report on the U.S. services sector in July revived bets the Federal Reserve would raise interest rates as early as September. The pace of growth in the U.S. service sector surged in July to its best level in a decade, led by sharp increases in business activity, employment and new orders, an industry report showed on Wednesday. The Institute for Supply Management said its services sector index rose last month to 60.3, its highest reading since August 2005. The greenback was last up 0.4 percent at 124.92 yen. To the upside, immediate resistance can be seen at 125.00. To the downside, immediate support level is located at 125.50 levels.
USD/CAD is supported around 1.3100 levels and currently trading at 1.3181 levels. It has made session high at 1.3196 and low at 1.3110 levels. The Canadian dollar pulled back from an 11-year low against its U.S. counterpart on Wednesday as data showed the country's trade deficit narrowed sharply in June due to soaring exports. The trade shortfall for the month was far less than analysts had expected and, coupled with disappointing U.S. private-sector jobs data, helped push the loonie back below C$1.32 to the greenback. Canada's long-suffering export sector snapped a five-month losing streak in June, showing the strongest surge in more than eight years and cutting the country's trade deficit significantly, Statistics Canada said on Wednesday. The currency's strongest level of the session was C$1.3110, while its weakest was C$1.3213. To the upside, immediate resistance can be seen at 1.3200. To the downside, major support level is located at 1.3132 levels
Equities Recap
European stocks closed higher on Wednesday, backed by strong economic data from china and strong showing by corporate earnings. UK's benchmark FTSE 100 edged higher by 1 percent at close, the pan-European FTSEurofirst 300 closed, up by 1.3 percent, Germany's Dax closed up by 1.7 percent, France's CAC closed up at 1.8 percent, Italy's FTSE MIB closed up by 1.9 percent. Meanwhile, Spain's IBEX 35 was down by 0.7 percent at close.
U.S. stocks closed slightly higher Wednesday. Dow Jones closed down by 0.06 percent, S&P 500 closed up by 0.31 percent, Nasdaq closed up by 0.68 percent.
Treasuries Recap
U.S. Treasury yields rose on Wednesday, with those on longer-dated debt rising more than short-dated yields after weaker-than-expected U.S. jobs data kindled skepticism that the Federal Reserve would hike interest rates in September.
Benchmark 10-year yields hit a nearly one-week high of 2.29 percent.
U.S. 30-year Treasury prices were last down 1-3/32 to yield 2.94 percent, from a yield of 2.89 percent late on 10-year notes were last down 15/32 in price to yield 2.27 percent, from 2.21 percent late on Tuesday.
Two-year notes were mostly flat in price to yield 0.73 percent.
German yields rose on data showing euro zone business growth accelerated at the end of last month as companies largely put the Greek debt crisis behind them, suggesting the bloc's economic recovery is on track.
Benchmark 10-year German Bund yields rose to 0.76 percent, the highest level since July 23, from 0.64 percent the previous session.
Commodities Recap
Oil prices hit multi-month lows on Wednesday after a surge in gasoline stockpiles in the United States as the summer season, the country's biggest demand period for motor fuels, neared its end.
Futures of Brent, the global oil benchmark, hit a six-month bottom while that of U.S. crude touched a 4-1/2-month trough, despite a bigger-than-expected drawdown in U.S. crude stockpiles announced by the Energy Information Administration.
U.S. crude futures settled down 59 cents, or 1.3 percent, at $45.15 a barrel, hitting a low last seen in March of $44.83. The market initially rallied nearly $1, reacting to the drawdown in crude stockpiles before retreating on the gasoline numbers.
Futures of Brent closed 40 cents lower at $49.59 a barrel, after falling to a January low of $49.02.
Gasoline futures settled down almost 1 percent, hitting a 5-1/2 month low.
Gold eased on Wednesday, hovering above the recent 5-1/2 year low on earlier pressure from the dollar as U.S. services sector data revived expectations of a U.S. interest rate rise as early as September.
Spot gold was down 0.2 percent at $1,085.35 an ounce by 2:37 p.m. EDT (1837 GMT), while U.S. gold for delivery in December settled down 0.5 percent, at $1,085.60 an ounce.
