Market Roundup
•UK Jun Core PPI Output (MoM) 0.1%, 0.2% previous
•UK Jun Core CPI (MoM) 0.2%, 0.1% forecast, 0.5% previous
•UK Jun Core RPI (YoY) 1.9%, 1.9% previous
•UK Jun CPI, n.s.a 134.10, 133.90 previous
•UK Jun CPI (MoM) 0.1%,0.1% forecast,0.3% previous
•UK Jun Core RPI (MoM) 0.2%, 0.3% previous
•UK Jun CPI (YoY) 2.0% ,1.9% forecast,2.0% previous
•UK Jun PPI Input (MoM) -0.8%, 0.1% forecast, -0.6% previous
•EU Jun CPI (MoM) 0.2%,0.2% forecast,0.2% previous
•EU Jun CPI (YoY) 2.5%,2.5% forecast,2.6% previous
•EU Jun CPI ex Tobacco (YoY) 2.4%,2.5% previous
•EU Jun Core CPI (YoY) 2.9%, 2.9% forecast,2.9% previous
•EU Jun Core CPI (MoM) 0.4%,0.3% forecast, 0.4% previous
Looking Ahead Economic Data(GMT)
•12:30 US Jun Housing Starts 1.300M forecast,1.277M previous
•12:30 US Jun Building Permits 1.400M forecast,1.399M previous
•12:30 US Jun Building Permits (MoM) -2.8% previous
•12:30 US Jun Housing Starts (MoM) -5.5% previous
•12:30 Canada May Foreign Securities Purchases by Canadians 0.020B previous
•12:30 Canada May Foreign Securities Purchases 41.16B previous
•13:15 US Jun Industrial Production (YoY) 0.13% previous
•13:15 US Jun Capacity Utilization Rate 78.5% forecast, 78.7% previous
•13:15 US Jun Industrial Production (MoM) 0.3% forecast,0.9% previous
•14:30 US Crude Oil Inventories -0.900M forecast,-3.443M previous
Looking Ahead Events And Other Releases (GMT)
•13:00 US FOMC Member Barkin Speaks
Currency Forecast
EUR/USD: The euro steadied on Wednesday as euro attracted bids ahead of the European Central Bank's rate-setting meeting later in the week.. The European Central Bank will hold its policy meeting later this week, where it is widely expected to hold interest rates. On the data front,Eurozone inflation slowed as initially estimated in June but the European Central Bank is expected to hold its benchmark rate on Thursday as underlying inflation remains too high.The harmonized index of consumer prices rose 2.5 percent on a yearly basis, which was slower than the 2.6 percent growth posted in May. The 2.5 percent matched the flash estimate published on July 2.The euro peaked at a four-month high of $1.0943. Immediate resistance can be seen at 1.0942(23.6%fib).), an upside break can trigger rise towards 1.1000 (Psychological level).On the downside, immediate support is seen at 1.0893(Daily low), a break below could take the pair towards 1.0868(38.2%fib).
GBP/USD: The pound hit its highest for nearly two years against the euro and around one year against the dollar on Wednesday after stronger than expected UK services inflation data for June led markets to reduce expectations for an August rate cut.British inflation held at 2.0% year on year last month, official data showed, above the 1.9% expected by analysts polled by Reuters, and closely-watched services inflation was at 5.7% year on year, compared to the expected 5.6%.Strong increases in hotel prices were partly to blame for the higher than expected reading, underscoring the Bank of England's concerns about price pressures in the services sector. After the data rate futures showed investors saw a roughly one in three chance of a BoE rate cut on Aug. 1, the date of its next scheduled monetary policy announcement, down from almost 50-50 before the inflation data. Immediate resistance can be seen at 1.3048(23.6%fib), an upside break can trigger rise towards 1.3081(Higher BB).On the downside, immediate support is seen at 1.2971(Daily low), a break below could take the pair towards 1.2937(38.2%fib).
USD/CHF: The dollar slipped lower against the Swiss franc on Wednesday as markets prepared for global interest rates to fall. Firmer bets on a Fed rate cut in September as well as rising expectations that former President Donald Trump will be back in the White House in November after the assassination attempt has dented demand for dollar . Investors will focus on comments from Fed officials Thomas Barkin and Christopher Waller later in the day for clues on how policymakers have assessed recent inflation, employment and retail sales data. On the economic data front, housing starts and industrial production data for June are also on deck. Immediate resistance can be seen at 0.8920(50%fib), an upside break can trigger rise towards 0.8970(61.8%fib).On the downside, immediate support is seen at 0.8872(38.2%fib), a break below could take the pair towards 0.8811(23.6%fib).
USD/JPY: The dollar declined sharply against Japanese on Wednesday as traders suspected was likely the result of yet another intervention from Japanese authorities to prop up the battered currency from multi-decade lows.The dollar was last 1.2% lower against the yen at 156.48 , extending its sudden fall against the Japanese currency shortly after the London trading session began.The dollar's decline against the yen happened at a more measured pace than in previous bouts of intervention, which led traders to initially attribute the move to the unwinding of carry trades.However, the scale of the fall left markets alert to the possibility of another yen-buying intervention from Tokyo, after authorities had likely done so last week. Strong resistance can be seen at 157.43(38.2%fib), an upside break can trigger rise towards 158.66(50%fib). On the downside, immediate support is seen at 155.94 (23.6%fib), a break below could take the pair towards 155.00 (Psychological level).
Equities Recap
European shares fell for a third consecutive session on Wednesday, dragged down by Dutch semiconductor firm ASML following a weak forecast, while investors were wary of potentially strict U.S. trade rules.
UK's benchmark FTSE 100 was last up by 0.03 percent, Germany's Dax was last down by 0.28 percent, France’s CAC was last down by 0.20 percent.
Commodities Recap
Gold hit a record and bonds rallied on Wednesday as markets prepared for global interest rates to fall, while stocks in Taiwan slipped after U.S. presidential candidate Donald Trump sounded lukewarm in his commitment to the island's defence.
Gold surged to an all-time peak on Wednesday, driven by mounting hopes of a U.S. interest rate cut in September after recent comments from Federal Reserve officials.
Spot gold was steady at $2,466.02 per ounce, as of 0711 GMT, after hitting a record peak of $2,482.29. U.S. gold futures gained 0.1% to $2,470.20.
Oil prices inched up on Wednesday, a day after benchmark Brent hit a one-month low, as a decline in U.S. oil stockpiles helped offset signs of weakening demand in China.
Brent crude oil futures was up 27 cents, or 0.32%, to $84.00 a barrel by 0800 GMT. U.S. West Texas Intermediate crude futures gained 35 cents, or 0.43%, to $81.11.
