- Japan July Nikkei manufacturing PMI 51.2 vs 51.4 expected.
- BOJ Gov Kuroda - No need for extra monetary easing.
- PBOC Sheng - Downward pressure on economy to persist.
- China July Caixin manufacturing PMI final 47.8 vs 49.4 previous.
- China July official manufacturing PMI 50.0 vs 50.2 previous, 50.2 expected.
- China July official services PMI 53.9 vs 53.8 previous.
- Australia July PMI 50.4, +6.2 pts from previous.
- Eurozone July Markit manufacturing PMI 52.4 vs 52.2 previous, 52.2 expected.
- Germany July Markit/BME manufacturing PMI 51.8 vs 51.5 previous, 51.5 expected.
- Greek stock market tumbles after five-week shutdown.
- Andreas Georgiou (ex-IMF statistician) stepped down as head of Greek statistics office.
- UK July Markit/CIPS manufacturing PMI 51.9 vs 51.4 previous, 51.6 expected.
- Osborne aims to eclipse Thatcher record for biggest sale of state assets.
- Osborne poised to start sale of UK govt stake in RBS this week.
- Swiss July Manufacturing PMI 48.7 vs 50.0 previous, 50.7 expected.
- Canada PM Harper asked GovGen to dissolve parliament, elections Oct 19.
- (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.
- (1030 ET/1430 GMT) Mexico PMI, previous 2.6%.
- (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.
- (1400 ET/1800 GMT) Brazil trade balance, expected at $2.3 bln vs 4.53 bln in June.
- (1700 ET/2100 GMT) Argentina's government tax revenue, $40.84 bln previous.
Key Events Ahead
- (1050 ET/1450 GMT) Fed Governor Powell (voter, moderate) on "Structure & Liquidity of Treasury Bond Markets".
- (1145 ET/1545 GMT) Fed Trade operation 30-year Fannie Mae / Freddie Mac, max $1.525bn.
FX Recap
EUR/USD is supported below 1.1000 levels and currently trading at 1.0968 levels. It has made intraday high at 1.0994 and low at 1.0955 levels. The euro sank as low as $1.0957 against the dollar on Monday, having traded at $1.0990 in early London trade as the Greek stock market slumped following a 5-week shutdown with most investors already positioned for huge losses. European currency started the busy week on a soft note, with a rather muted reaction to the PMI figures from economies across the euro zone. The euro turned somewhat lower, falling deeper under the $1.10 handle after the releases, trading 0.11% down at $1.0966. The final manufacturing PMI for the euro zone came in at 52.4 points in July, edging down from 52.5 in June, but beating analysts' estimates of 52.2 points, the same as the preliminary print. Initial support is seen around at 1.0789 and resistance at 1.1195 levels. Option expiries are at 1.0975 (360M), 1.1000 (522M), 1.1050 (400M), 1.1100 (1.1BLN).
USD/JPY is supported above 124.00 levels and posted a high of 124.18 levels. It has made intraday low at 123.84 and currently trading at 124.16 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. 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 below $1.5600 levels. It made an intraday high at 1.5643 and low at 1.5582 levels. Pair is currently trading at 1.5585 levels. At the start of the third quarter, UK Markit/CIPS PMI rose to 51.9 in July, up from last month's 26-month low of 51.4, exceeding expectations of 51.6. 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 markets shrugged off upbeat UK manufacturing PMI data which continued its expansion in July. Later in the day, US data are due including personal income and spending data, followed by manufacturing numbers from ISM. Spending for June is predicted to decline rapidly, from 0.9% to 0.2%. Initial support is seen at 1.5413 and resistance is seen around 1.5734 levels. Option expiry is at 1.5700 (328M).
NZDUSD is supported below 0.6600 levels and trading at 0.6592 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 0.7282 levels. It has made intraday high at 0.7315 levels and low at 0.7280 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.
Equities Recap
The Greek stock market slumped following a 5-week shutdown with most investors already positioned for huge losses. While weak data from China helped push oil prices to their lowest in six months and Asian stocks close to their 2015 lows.Stocks in Athens dropped 23 percent when the market reopened after closing in late June. Lower-rated government bonds also saw some mild selling.
The pan-European FTSEurofirst 300 was 0.4 percent higher by 0845 GMT.M
MSCI's broadest index of Asia-Pacific shares outside Japan fell more than 1 percent to take it close to early July's lowest level of the year. Shanghai shares shed 1.9 percent, Japan's Nikkei slid 0.3 percent and South Korea's Kospi fell 1 percent. Australian stocks dropped 0.4 percent.
Commodities Recap
Oil fell to its lowest in six months on Monday, knocked by fresh evidence of growing oversupply and data highlighting slowing demand in China, leaving crude prices set for their weakest third-quarter performance since 2008. Brent crude oil fell $1.17 to $51.04 a barrel by 0850 GMT, having touched a low of $50.85 earlier in the day, its weakest since Jan. 30. U.S. crude fell 75 cents to $46.37 after hitting the lowest in four months at $46.35. Front-month prices lost 20.8 percent in July, the biggest monthly drop since October 2008.
Gold steadied not far above a 5-1/2-year low on Monday, struggling to scale higher at the start of the month after its deepest loss in two years in July, as expectations for a near-term hike in U.S. interest rates kept sellers nearby. Spot gold was flat at $1,095.36 an ounce by 0630 GMT. The metal fell as low as $1,079.50 on Friday, near last month's trough of $1,077, its weakest since February 2010. U.S. gold for December delivery was also unchanged at $1,095.10 an ounce.
Treasuries Recap
The benchmark U.S Treasury 10-year note yield held firm at 2.21 percent while 10-year Japanese bond yields stabilized at 0.41 percent, within reach of a two-month low.
The top-rated German bond yields were flat at 0.62 percent. Portuguese, Italian and Spanish 10-year bond yields edged up 2 basis points in early trading to 2.43 percent, 1.79 percent and 1.87 percent.
UK Gilts opened 16 ticks lower than the settlement of 117.30 as core markets started the month with a modest risk on bias. The reopening of stock markets in Greece did deliver the widely expected downward adjustment, but the DAX has prospered on stronger than expected corporate earnings. Sellers have pushed 10-year cash yields higher but so far, recent lows around the 1.93% level remain intact.
JGB prices ended the day slightly lower in the 5-yr and longer zone, sending yields up by 0.5bp to 1bp from last Friday. Today, the BoJ offered to buy JPY70bn of JGBs in the under 1-yr zone, JPY240bn of JGBs in the 10-yr to 25-yr zone, and 140bn of JGBs in the over 25-yr zone under its massive JGB purchase program. After lunch, the 10s, the 20s, and the 30s remained softer, though the results of today's JGB buying operations by the BoJ were largely in line with market expectations.
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 3-year bond contract up 1 tick at 98.100. The 10-year contract was half a tick higher at 97.2100.
