Market Roundup
- CFTC - Speculators boost net USD longs to highest since early June.
- Japan June current account surplus Y558.6 bln, Y773.6 bln eyed, 12th straight monthly surplus, H1 surplus best since '10, near '07-08 levels.
- MOF July flow data - Japanese buy net trln foreign stocks, trln bonds, Y1.2 bln bills; foreign investors sell net Y327.9 bln Japanese stocks, buy trln bonds, trln bills.
- Japan July outstanding bank loans trln, +2.6% y/y, June +2.5%.
- Japan Sumitomo Life in talks to buy US Symetra, Y400-500 bln deal.
- Quantitative easing with Chinese characteristics takes shape.
- China July trade surplus $43.03 bln, exports -8.3% y/y, imports -8.1%, $53.25 bln, -1.0% and -8.0% eyed, export plunge sharpens calls for more stimulus.
- China July coal imports at eight-month high as domestic supply dips.
- China July CPI +0.3% m/m, +1.6% y/y, +0.3% and +1.5% eyed, PPI -0.7% m/m, -5.4% y/y, -5.0% y/y eyed.
- SNB Vice Chair Zurbruegg - CHF strongly overvalued, still ready to intervene.
- Investors continue to pull out of emerging markets.
Economic Data Ahead
- (0230 ET/0630 GMT) France July BDF business sentiment index, 99 eyed; last 98.
- (0330 ET/0730 GMT) Sweden June industrial output, -0.1% m/m, +1.9% y/y eyed; last -0.1%, +3.3%.
- (0330 ET/0730 GMT) Sweden June manufacturing new orders; last +5.9% y/y.
- (0400 ET/0800 GMT) Norway July CPI, unchanged m/m, +1.9% y/y eyed; last +0.3%, +2.6%.
- (0400 ET/0800GMT) Norway July core, unchanged m/m, +2.6% y/y eyed; last +0.5%, +3.2%.
- (0400 ET/0800 GMT) Norway July PPI; last -4.9% y/y.
- (0430 ET/0830 GMT) Euro zone August Sentix index, 20.2 eyed; last 18.5.
- (1000 ET/1400 GMT) US August employment trends index, July LMCI; last 129.1, +0.8.
Key Events Ahead
- Singapore market holiday.
- N/A Riksbank Deputy Gov Skingsley at HKMA workshop, speech at conclusion.
- N/A German E2 bln 6-month Bubill, France 3/6/12-month BTF auctions.
- (0900 ET/1300 GMT) Atlanta Fed Lockhart speaks at Atlanta forum.
- (1225 ET/1625 GMT) Atlanta Fed Lockhard speech before Atlanta Press Club.
FX Recap
EUR/USD is supported above 1.0900 levels and currently trading at 1.0968 levels. It has made intraday high at 1.0972 and low at 1.0949 levels. The price action came on the back of the Nonfarm Payrolls that added 215k jobs to the market which was a good enough number for markets to expect the FOMC to record against their decision making list of criteria towards a possible rate hike this September. From the weekend, Greek Finance Minister Tsakalotos and Economy Minister Stathakis were holding discussions with the European Commission, IMF, ECB and the Euro zone's own bailout fund as they plan to strike a deal by August 20th to secure funds for an ECB repayment. Initial support is seen around at 1.0789 and resistance at 1.1195 levels.
USD/JPY is supported above 124.00 levels and posted a high of 124.40 levels. It has made intraday low at 124.09 and currently trading at 124.36 levels. On Friday markets got another sign that the first US rate hike is probably just around the corner, with job growth in the world's biggest economy pushing ahead last month. The unemployment rate held steady at 5.3%, its lowest since before the Global Financial Crisis. Data out of Japan on Monday showed the nation's broadest measure of trade, the current account, shrinking to a surplus of ¥558.6 billion in June from ¥1.88 trillion a month earlier. The sharply lower surplus in June was largely accounted for by the primary income surplus, which shrank from ¥2.01 trillion in May to just ¥656.9 billion in June. Initial resistance is seen at 125.68 and support is seen at 120.63 levels.
GBP/USD is supported below $1.5500 levels. It made an intraday high at 1.5496 and low at 1.5478 levels. Pair is currently trading at 1.5488 levels. Sterling is supported below $1.55 level after US NFP job data as well as BOE rate decision. BOE kept the interest rate and asset purchase facility unchanged as expected. Pair was sold-off on the back of BOE Broadbent's dovish comments relating to the central bank rate-hike outlook and also on widening UK trade deficit news. Moreover, BOE coming out surprisingly dovish with its minutes and revising lower its inflation outlook on Thursday also keep the negative sentiment around the pound intact. Initial support is seen at 1.5413 and resistance is seen around 1.5734 levels.
NZDUSD is supported above 0.6600 levels and trading at 0.6609 levels and made intraday low at 0.6598 and high at 0.6625levels. The kiwi recovered from its six-year lows seen in the previous session, when it was flattened by weak US NFP job data. Pair trades almost unchanged, swiftly recovering from a dip to session lows following the Fonterra's payout forecast cut and also the farm support plan announcement. Initial support is seen at 0.6465 and resistance at 0.6789 levels.
USDCHF is supported above 0.9800 levels and currently trading at 0.9826 levels. Pair made in intraday high at 0.9844 and low at 0.9809. The Swiss currency was persistent sold-off versus the US dollar, pushing USD/CHF to fresh four-month highs beyond 0.98 handle, as markets continue to favour the US dollar after NFP job data. Swiss CPI figures which revealed that consumer prices in Switzerland failed to rebound in July and slid into negative territory on a monthly basis as well. Today no major data is expecting from the Switzerland. To the topside, the next resistance is located at 0.9850 levels and to the downside, immediate support might be located at 0.9769 (Today's Low) levels and below that at 0.9700 levels.
AUD/USD is supported around 0.7400 levels and trading at 0.7396 levels. It has made intraday high at 0.7415 levels and low at 0.7385 levels. The Australian dollar slipped against its US namesake at the start of the new week, weighed down by lower commodity prices, particularly oil. Copper, gold, and silver futures also traded weaker on Monday, after the world's second-biggest economy and one of the world's biggest commodity importers, reported disappointing trade figures on Saturday. Over the weekend China also reported a mild 1.6% year-on-year rise in the CPI last month, and a 5.4% slump in the Producer Price Index (PPI) over the same period. Initial support is seen at 0.7225 and resistance at 0.7647 levels.
Equity Recap
Japan's benchmark Nikkei 225 index traded 0.12% lower at 20,700.33 points within the first hour of the market opening, while Tokyo's broader Topix gauge was down 0.17% at 1,676.83 points.
Hong Kong's benchmark Hang Seng index plunged 1.53% to 24,177.02points at the opening bell, while mainland China's benchmark Shanghai Composite rallied 1.43% to 3,797.56 points at the same time.
The benchmark Australian S&P/ASX 200 index reversed early losses to trade 0.21% higher at 5,486.50 points in Sydney.
New Zealand's benchmark S&P/NZX 50 index slipped 0.07% to 5,864.46 points this afternoon in Wellington.
Australia's S&P/ASX 200 index closes up 0.57 pct at 5,505.90 points.
Tokyo's Nikkei average closes up 0.41 pct at 20,808.69.
Treasury Recap
10-year US treasury yield at 2.185 percent vs US close of 2.175 percent on Friday.
South Korea sells 5-year treasury bonds at 2.010 pct.
South korea Central bank says sells 91-day monetary stabilization bonds at yield of 1.50 pct.
Thai 15 bln baht, 27-day treasury bill average accepted yield 1.39995 pct.
New Zealand government bond yields were 2 basis points lower.
Australian government bond futures firmed as the yield curve flattened. The three-year bond contract added 1 tick to 98.020, while the 10-year contract rose 7 ticks to 97.1900.
Commodity Recap
Gold steadied not far above a 5-1/2-year low on Monday, with a firm dollar after solid U.S. job gains in July suggesting the Federal Reserve could raise interest rates as early as next month. U.S. nonfarm payrolls increased 215,000 in July, less than the 223,000 rise that economists had expected, although still seen in line with a tightening labour market. Payrolls data for May and June was revised to show 14,000 more jobs created than previously reported. Spot gold was unchanged at $1,092.86 an ounce by 0220 GMT, recovering from an early low of $1,089.40.
Oil prices continued to slide on Monday after booking hefty losses over the prior trading week, with WTI remaining below the $44 per barrel level. Brent crude was trading 0.56% lower at $48.34 a barrel and WTI futures were trading 0.55% lower at $43.63 a barrel.
