Market Roundup
•French Jul Manufacturing PMI 44.1,45.8 forecast,45.4 previous
•French Jul S&P Global Composite PMI 49.5,48.9 forecast, 48.8 previous
•French Jul Services PMI 50.7,49.7 forecast,49.6 previous
•German Jul Manufacturing PMI 42.6,44.1 forecast,43.5 previous
•German Jul German Composite PMI 48.7,50.7 forecast,50.45 previous
•German Jul Services PMI 52.0, 53.2 forecast,53.1 previous
•UK Composite PMI 52.7,52.6 forecast, 52.3 previous
•UK Manufacturing PM51.8,I 51.1 forecast, 50.9 previous
•UK Services PMI 52.4, 52.5 forecast, 52.1 previous
•US Jun Goods Trade Balance -98.80B forecast,-99.37B previous
•Canada Jun New Housing Price Index (MoM) -0.2%, 0.1% forecast,0.2% previous
•Canada Jun Retail Inventories Ex Auto 0.2%,00 previous
• US Wholesale Inventories (MoM) 0.2%, 0.5% forecast, 0.6% previous
• US Building Permits (MoM) 3.9%,3.4% forecast,-2.8% previous
• US Building Permits 1.454M, 1.446M forecast,1.399M previous
Looking Ahead Economic Data(GMT)
•14:00 US Jul Services 54.7 forecast, 55.3 previous
•14:00 US Jul Manufacturing PMI 51.7 forecast, 51.6 previous
•14:00 US Jun New Home Sales 639K forecast, 619K previous
•14:00 US Jun New Home Sales (MoM) -11.3% previous
Looking Ahead Events And Other Release(GMT)
•13:45 BoC Monetary Policy Report
Currency Forecast
EUR/USD: The euro eased on Tuesday after data showed business activity data Euro zone stalled this month. Business activity in the eurozone experienced a further slowdown in July, indicating a near-stagnation as the economy continues to be hindered by a weak manufacturing sector, according to a key survey released on Wednesday. The HCOB Flash Eurozone Purchasing Managers' Index (PMI), published by S&P Global, recorded a figure of 50.1, down from 50.9 in June, marking its lowest level in five months. Any reading above 50 indicates growth, while a figure below 50 shows contraction. Economists said the data pointed to a sluggish recovery for the eurozone. Immediate resistance can be seen at 1.0865(38.2%fib), an upside break can trigger rise towards 1.0909 (23.6%fib).On the downside, immediate support is seen at 1.0825(50%fib), a break below could take the pair towards 1.0790(61.8%fib).
GBP/USD: Sterling gained against dollar on Wednesday after a survey showed British business activity this month was stronger than in euro zone economies .British business activity picked up this month, bolstered by the fastest manufacturing growth in two years and the strongest inflow of new orders since April 2023, PMI survey data showed Wednesday. In contrast, growth in euro zone business activity stalled. The pound has been supported in recent months by better-than expected economic data, some stability from a new government, and also the Bank of England being slower to cut rates than some peers, including the European Central Bank, due to fears about sticky services inflation.The BoE next meets in August, and markets see around a 45% chance of them cutting rates. Rees said Wednesday's data would do little to push the BoE towards or away from an August cut as it showed a mixed picture regarding the pass through from wages to inflation.Immediate resistance can be seen at 1.2953(38.2%fib), an upside break can trigger rise towards 1.3020(23.6%fib).On the downside, immediate support is seen at 1.2886(50%fib), a break below could take the pair towards 1.2824(61.8%fib).
USD/CHF: The dollar edged lower against the Swiss franc on Wednesday as market participants evaluated the timing and frequency of potential U.S. interest rate cuts and awaited U.S. economic data for further clarity on monetary policy. The Fed will cut rates just twice this year, in September and December, as resilient U.S. consumer demand warrants a cautious approach despite easing inflation .The U.S. GDP data on Thursday and personal consumption expenditure (PCE) price index data on Friday could help investors calibrate their expectations of when rate cuts might begin. Investors are also closely watching developments in the U.S. election campaign, as Vice President Kamala Harris is expected to be the Democratic Party's candidate to face Republican Donald Trump. Immediate resistance can be seen at 0.8886(38.2%fib), an upside break can trigger rise towards 0.8938(50%fib).On the downside, immediate support is seen at 0.8833(23.6%fib), a break below could take the pair towards 0.8811(Lower BB).
USD/JPY: The dollar dipped against Japanese on Wednesday as yen attracted buying interest ahead of next week's central bank meeting. The BOJ meets on July 31 to set monetary policy and a very mixed bag of economic data means the chances of a hike from 0.1% are about 50/50. The Bank of Japan, at the Ministry of Finance's behest, likely spent nearly 6 trillion yen ($38.4 billion) this month in shoring up the yen. Authorities in Tokyo warned almost daily they would step in should volatility prove excessive or the level of the Japanese currency not reflect the underlying economic and monetary-policy reality. Another round of intervention was, therefore, hardly a surprise.There has been no official confirmation of intervention, but when the first round of a one-two punch arrived on July 11, traders believe the BOJ pounced on weak U.S. inflation data that hit the dollar selling. Strong resistance can be seen at 155.25(38.2%fib), an upside break can trigger rise towards 156.56(50%fib). On the downside, immediate support is seen at 153.72 (23.6%fib), a break below could take the pair towards 153.00 (Psychological Level).
Equities Recap
European shares fell on Wednesday, dampened by luxury stocks after dour results from LVMH weighed on sentiment and as a raft of lacklustre corporate earnings added to the sombre mood.
UK's benchmark FTSE 100 was last down by 0.04 percent, Germany's Dax was last down by 0.71 percent, France’s CAC was last down by 0.87 percent.
Commodities Recap
Gold prices drifted higher on Wednesday, as market participants assessed the timing and number of U.S. interest rate cuts and awaited U.S. economic data for further clarity on monetary policy.
Spot gold was up 0.4% at $2,417.63 per ounce, as of 1208 GMT. U.S. gold futures gained 0.5% to $2,418.20.
Oil prices edged higher on Wednesday but were still close to their lowest level in six weeks with few signs of the fuel consumption surge usually seen at this stage of the northern hemisphere summer.
Brent crude futures for September rose 66 cents, or 0.81%, to $81.67 a barrel by 1300 GMT. U.S. West Texas Intermediate crude for September increased 78 cents, or 1.01%, to $77.74 per barrel.
