Market Roundup
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•Greek May Current Account (YoY) -2.688B previous
Looking Ahead Economic Data(GMT)
•12:30 US Jun Chicago Fed National Activity 0.18 previous
•13:00 French 12-Month BTF Auction 3.355% previous
•13:00 French 3-Month BTF Auction 3.602% previous
•13:00 French 6-Month BTF Auction 3.537% previous
•15:30 US 3-Month Bill Auction 5.195% previous
•15:30 US 6-Month Bill Auction 4.985% previous
Looking Ahead Events And Other Releases(GMT)
•No significant Events
Currency Forecast
EUR/USD: The euro edged higher on Monday as investors focused on U.S. President Joe Biden's decision to end his re-election campaign and the next moves from the Federal Reserve and the Bank of Japan. Biden announced on Sunday that he was exiting the race and endorsed Vice President Kamala Harris as the Democratic candidate for the November election. Harris quickly received the backing of many within the party, though several high-profile figures, including former House Speaker Nancy Pelosi, remained silent. Meanwhile, former President Trump, the Republican nominee, holds a strong lead in betting markets. The dollar index, which measures its value against a basket of foreign currencies, fell by 0.1% to 104.30.The euro was up 0.05% at $1.0884.Immediate resistance can be seen at 1.0953(23.6%fib).), an upside break can trigger rise towards 1.1000 (Psychological level).On the downside, immediate support is seen at 1.0873(38.2%fib), a break below could take the pair towards 1.0813(50%fib).
GBP/USD: Sterling saw a modest gain on Monday as investors looked forward to the upcoming S&P Global Composite Purchasing Managers Index, set to be released on Wednesday. British inflation exceeded forecasts last week, prompting investors to scale back expectations that the Bank of England (BoE) will begin cutting rates next month for the first time since 2020. Even if the BoE cuts rates in August, it should not significantly impact the British currency outlook if the Federal Reserve follows suit in September, as markets currently anticipate. Investors have priced in a 40% chance of a BoE rate cut in August and over an 80% chance in September. Market participants continue to be concerned about the economic outlook following recent data. Sterling was up 0.05% at $1.2935 after hitting $1.3044 last week, its highest level since July 2023.Immediate resistance can be seen at 1.2933(Daily high), an upside break can trigger rise towards 1.2990(23.6%fib).On the downside, immediate support is seen at 1.2900(38.2%fib), a break below could take the pair towards 1.2833(50%fib).
USD/CHF: The dollar edged lower against the Swiss franc on Monday as dollar weakened following President Joe Biden's decision to withdraw from the 2024 presidential race, while the market turned its attention to Friday's upcoming U.S. personal consumption expenditures (PCE) data for additional insights on the timing of potential interest rate cuts. The dollar eased following Biden's decision on Sunday to abandon his re-election bid, making bullion more attractive to buyers holding other currencies.The market is now awaiting U.S. gross domestic product data for the second quarter on Thursday, as well as the personal consumption expenditure (PCE) data on Friday. Investors will also focus on comments by Fed Chair Jerome Powell at the conclusion of the Fed’s July 30-31 meeting, with money markets fully pricing in a 25 bps Fed rate cut by September. Immediate resistance can be seen at 0.8910(38.2%fib), an upside break can trigger rise towards 0.8962(50%fib).On the downside, immediate support is seen at 0.8848(38.2%fib), a break below could take the pair towards 0.8828(Lower BB).
USD/JPY: The dollar dipped against Japanese on Monday as dollar dipped following Joe Biden's decision to bow out of the election race. Markets face a new U.S. electoral calculus after U.S. President Joe Biden's abrupt announcement Sunday that he will end his campaign against former President Donald Trump for reelection.Biden announced on Sunday he would drop out of the election race and endorsed Vice President Kamala Harris for the Democratic ticket.While Biden endorsed Vice President Kamala Harris to replace him at the top of the Democrat's ticket, it's not yet clear who the party will select. Strong resistance can be seen at 157.46(Daily high), an upside break can trigger rise towards 158.40(50%fib). On the downside, immediate support is seen at 156.38 (23.6%fib), a break below could take the pair towards 155.21 (Lower BB).
Equities Recap
European shares fell on Friday and were set for weekly losses, hurt by lower commodity prices and as a rout in global technology shares weighed, even as airlines, media companies, banks and telecoms firms around the world said system outages were disrupting their operations.
UK's benchmark FTSE 100 was last up by 0.83 percent, Germany's Dax was last down by 1.48 percent, France’s CAC was last up by 1.36 percent.
Commodities Recap
Oil prices were little changed on Monday after Joe Biden announced he would not seek a second term as U.S. president. Meanwhile, investors watched for more signs that U.S. interest rates could be cut as early as September.
Brent crude futures dipped 9 cents to $82.54 a barrel by 0933 GMT and U.S. West Texas Intermediate crude futures was down 19 cents at $79.94.
Gold prices edged up on Monday as the dollar weakened in response to President Joe Biden's decision to withdraw from the 2024 presidential race. The market is now preparing for Friday's U.S. personal consumption expenditures (PCE) data for further clues on the timing of interest rate cuts.
Spot gold rose 0.2% to $2,404.95 per ounce, as of 1021 GMT, while U.S. gold futures gained 0.3% to $2,406.50.
