- Investor capitulation out of EM and gold continues.
- Pacific Rim free trade talks fall short of deal.
- BOJ Gov Kuroda - No need for extra monetary easing.
- Japan July manufacturing PMI final 51.2, flash 51.4, June 50.1.
- PBOC Sheng - Downward pressure on economy to persist.
- China July Caixin manufacturing PMI final 47.8, 2-year low, flash 48.2, June 49.4.
- China July official manufacturing PMI 50.0, 50.2 eyed, June 50.2.
- China July official services PMI 53.9, June 53.8.
- St Louis Fed Bullard - Fed in good shape for September rate hike.
- Puerto Rico set for debt default.
- Canada PM Harper asked GovGen to dissolve parliament, elections Oct 19.
- Germany's Merkel has chance of absolute majority.
- Merkel to run for fourth term in '17.
- Day of losses seen for reopened Greek stock market.
- Greece may seek up to E24 bln in first new aid tranche.
- Australia July PMI 50.4, +6.2 pts from June, production and sales up large.
- Australia June new home sales +0.5% m/m.
- Australia July job ads -0.4% m/m, June revised +1.2% (+1.3%).
- Australia July TD/MI inflation guage +0.2% m/m, +1.6% y/y, June +0.1%, +1.5%.
- (0230 ET/0630 GMT) Sweden July PMI manufacturing, 53.5 eyed; last 52.8.
- (0315 ET/0715 GMT) Spain July PMI manufacturing, 54.3 eyed; last 54.5.
- (0330 ET/0730 GMT) Switzerland July PMI manufacturing, 50.7 eyed; last 50.0.
- (0345 ET/0745 GMT) Italy July PMI manufacturing, 53.9 eyed; last 54.1.
- (0350 ET/0750 GMT) France July PMI manufacturing, 49.6 eyed; flash 49.6.
- (0355 ET/0755 GMT) Germany July PMI manufacturing, 51.5 eyed; flash 51.5.
- (0400 ET/0800 GMT) Euro zone July PMI manufacturing, 52.2 eyed; flash 52.2.
- (0430 ET/0830 GMT) UK July PMI manufacturing, 51.6 eyed; last 51.4.
- (0830 ET/1230 GMT) US June personal income, +0.3% m/m eyed; last +0.5%.
- (0830 ET/1230 GMT) US June personal consumption, +0.2% m/m eyed, last +0.9%.
- (0830 ET/1230 GMT) US June core PCE price index, +0.1% m/m eyed; last +0.1% m/m, +1.2% y/y.
- (0945 ET/1345 GMT) US July Markit PMI manufacturing final; flash 53.8.
- (1000 ET/1400 GMT) US June construction spending, +0.6% m/m eyed; last +0.8%.
- (1000 ET/1400 GMT) US July ISM PMI manufacturing, 53.5 eyed; last 53.5.
- (1300 ET/1700 GMT) US June Dallas Fed PCE; last +2.3%.
- (1330 ET/1730 GMT) US July total vehicle sales, 17.2mln AR eyed; last 17.16 mln AR.
Key Events Ahead
- N/A Netherlands E1-2 bln each 3/6-mo DTC, France 3/6/12-mo BTF auctions.
- (1050 ET/1450 GMT) Fed Gov Powell speech at Washington, DC Brookings Institution conference.
FX Recap
EUR/USD is supported below 1.1000 levels and currently trading at 1.0976 levels. It has made intraday high at 1.0987 and low at 1.0964 levels. Focus has turned back to Greece, as the IMF insists on a "comprehensive" deal between Greece and its creditors including substantial debt relief. Technically, the pair maintains a neutral stance in the weekly chart, as the price is barely above a horizontal 20 SMA, whilst the Momentum indicators rests horizontal above its 100 level and the RSI indicator aims higher, but around 45. A number of important indicators, including manufacturing and services PMIs and data from "real economy" are due today. Initial support is seen around at 1.0789 and resistance at 1.1195 levels.
USD/JPY is supported around 124.00 levels and posted a high of 124.10 levels. It has made intraday low at 123.84 and currently trading at 124.01 levels. The US dollar trimmed early gains versus its Japanese counterpart in mid-Asia, keeping USD/JPY sidelined near 124 barriers, as the greenback tires to recover from Friday's labour data-blow while weak Japanese manufacturing gauge also aids the recovery in the major. The ECI index showed a poor increase in US wages during the second quarter, posting only a 0.2% hike, while the first quarter saw a 0.7% jump. Moreover, yen took a hit earlier today after Japanese manufacturing PMI came out below estimates. Japan Final Manufacturing Purchasing Manager Index down to 51.2 in July from previous 51.4. We have a crucial week ahead in terms of key US economic releases while BOJ's monetary policy statement will also remain in focus. Later in the day ahead, traders now turn their attention towards US Core PCE index and ISM manufacturing PMI for further momentum on the pair. Initial resistance is seen at 124.57 and support is seen at 120.63 levels.
GBP/USD is supported above $1.5600 levels. It made an intraday high at 1.5636 and low at 1.5614 levels. Pair is currently trading at 1.5617 levels. The Bank of England is set to convene on interest rates on August 6th and for the first time it will publish Monetary Policy Committee (MPC) minutes and the Inflation Report all at the same time. Although no change in the interest rates is expected, given the recent verbal hawkishness from the MPC members, including David Miles and BOE's governor Mark Carney, sterling is likely to be boosted should the inflation forecast be accompanied by a solid wage growth forecast, justifying monetary tightening. UK manufacturing PMI data will be in focus for the day. Initial support is seen at 1.5413 and resistance is seen around 1.5734 levels.
NZDUSD is supported below 0.6600 levels and trading at 0.6585 levels and made intraday low at 0.6571 and high at 0.6605 levels. pair extends its gradual descent from Friday overnight and seems to consolidate in the Asian morning as traders gear up for an eventful week with a host of significant NZ macro data lined up for release while the key US Non-farm payrolls will also have major impact on the Kiwi. The New Zealand dollar remains largely subdued versus its American counterpart following disappointing Chinese manufacturing PMI report which came in at lowest levels in two years. The latest Caixin China General Manufacturing PMI final reading stood at 47.8 versus 48.2 preliminary, witnessing sharpest deterioration in two years. Meanwhile, markets now await a set of US manufacturing PMI readings while Fed's closely watch inflation gauge will also be tracked in the day ahead. Initial support is seen at 0.6465 and resistance at 0.6789 levels.
AUD/USD is supported below 0.7300 levels and trading at 0.7295 levels. It has made intraday high at 0.7315 levels and low at 0.7289 levels. Pair was struggling to hold ground around 0.73 handle, with downside risks exposed ahead of Tuesday's RBA policy decision and a series of key Australian economic releases later this week. Initial support is seen at 0.7225 and resistance at 0.7647 levels.
Equity Recap
An index of Asian shares outside Japan fell close to this year's lows thanks to a deepening selloff in commodities and concerns over slowing growth in China, while the dollar held its ground against a basket of currencies.
Stock markets across the region declined with Japan's Nikkei down 0.5 percent and South Korea's Kospi falling 0.9 percent.
Taiwan stocks sank on Monday as semiconductor firms were knocked by a worsening outlook for the trade-reliant economy.
The CSI300 index fell 1.2 percent to 3,772.53 points at 1:36 GMT, while the Shanghai Composite Index lost 1.4 percent to 3,612.93 points. China CSI300 stock index futures for August fell 1.0 percent, to 3,623.2, -149.33 points below the current value of the underlying index.
Although outflows have pummeled stock markets from Korea to Taiwan, valuations suggest more downside is likely.
The Indian market has opened on flat note. The Sensex is up 13.97 points at 28128.53, and the Nifty is down 2.55 points or 0.03 percent at 8530.30.
Australia's S&P/ASX 200 index closes down 0.45 pct at 5,673.30 points.
Tokyo's Nikkei average closes down 0.18 pct at 20,548.11.
Treasury Recap
An auction of 15 billion baht ($428.2 million) of 28-day treasury bills fetched an average accepted yield of 1.40312 percent on Monday, the Bank of Thailand said.
New Zealand government bond yields were 1 to 2 basis points lower across the curve.
Australian government bond futures were a touch firmer, with the three-year bond contract up 1 tick at 98.100. The 10-year contract was half a tick higher at 97.2100.
Commodity Recap
Oil prices continued their bearish path on Monday as traders digested the latest comments from Iran about lifting its production levels as well as fresh economic news from China. WTI futures dropped 0.68% to $46.80 per barrel, while futures for Brent lost 0.75% to trade at $51.82 per barrel, after both benchmarks ended last week in the red zone.
Gold edged lower early on Monday, trading near a 5-1/2-year low, as expectations for a near-term hike in U.S. interest rates kept up the downward pressure after bullion fell the most since 2013 in July. In Asia, gold demand hardly perked up last week with many would-be buyers predicting further price declines, keeping premiums steady in the world's top gold consuming region.
