Market Roundup
- EUR/USD 0.36%, USD/JPY 0.08%, GBP/USD 0.31%, EUR/GBP -0.02%
- DXY -0.19%, DAX 0.22%, FTSE 0.21%, Brent 1.00%, Gold 0.56%
- Fed policymakers see rate hikes, blurring dove-hawk divide
- China to keep hitting back at U.S. over trade, to boost gov't spending - finance minister
- Yuan flirts with record 11th losing week as more US tariffs loom
- Australian dollar bounces after Morrison wins leadership vote; NZ$ treads water
- Germany Q2 GDP Detailed YY NSA, 2.3%, 2.3% forecast, 2.3% previous
- Germany Q2 GDP Detailed YY SA, 2.0%, 2.0% forecast, 2.0% previous
- Germany Q2 GDP Detailed QQ SA, 0.5%, 0.5% forecast, 0.5% previous
- Great Britain Jul UK Finance Mortgage Approvals, 39.58k, 40.54k previous, 40.33k revised
- Brexiteers fume at UK finance minister Hammond's 'no deal' warning
- Oil up as U.S. sanctions on Iran cloud supply outlook
- Gold up as dollar slips ahead of Fed chairman's speech
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. durable goods orders are expected to have decreased 0.5 percent in July after rising 0.8 percent in June, while orders excluding transportation are likely to have risen 0.5 percent after gaining 0.2 percent the prior month.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (1000 ET/1400 GMT) Federal Reserve Chairman Jerome Powell will speak on "Monetary Policy in a Changing Economy" at an annual meeting of central bankers in Jackson Hole, Wyoming.
FX Beat
DXY: The dollar index edged lower as the talks between U.S. and Chinese officials ended without any progress, while their trade war escalated following a new round of tariffs. The greenback against a basket of currencies trades 0.3 percent down at 95.38, having touched a low of 94.93 on Wednesday, its lowest since August 2. FxWirePro's Hourly Dollar Strength Index stood at 26.84 (Neutral) by 1000 GMT.
EUR/USD: The euro gained, reversing some of its previous session losses after data showed all sectors of the German economy grew in the second quarter, as robust domestic activity offset risks to exports from an uncertain global trade outlook. The European currency traded 0.4 percent up at 1.1578, having touched a high of 1.1622 on Wednesday, its highest since August 8. FxWirePro's Hourly Euro Strength Index stood at 95.25 (Slightly Bullish) by 1000 GMT. Immediate resistance is located at 1.1628 (August 8 High), a break above targets 1.1667 (August 2 High). On the downside, support is seen at 1.1500, a break below could drag it till 1.1451 (10-DMA).
USD/JPY: The dollar surged to a near 3-week peak ahead of a speech by the Federal Reserve Chairman Jerome Powell at the Jackson Hole, Wyoming that could provide investors an indication of the central bank's monetary tightening plans and reaction to recent criticism by U.S. President Donald Trump. The major was trading 0.1 percent up at 111.40, having hit a high of 111.48 earlier, its highest since August 6. FxWirePro's Hourly Yen Strength Index stood at -117.56 (Highly Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S durable goods orders and Fed Chair Powell's speech. Immediate resistance is located at 111.52 (August 6 High), a break above targets 111.73 (August 2 High). On the downside, support is seen at 111.02 (21-DMA), a break below could take it lower 110.53 (5-DMA).
GBP/USD: Sterling steadied as the greenback eased ahead of an annual meeting of central bankers at Jackson Hole, Wyoming, where Federal Reserve Chairman Jerome Powell and Bank of England Chief Economist Haldane are scheduled to speak. However, concerns about whether Britain can secure itself a trading deal with the European Union before it leaves the bloc next March dented investor sentiment. The major traded 0.4 percent up at 1.2856, having hit a high of 1.2936 on Wednesday; it’s highest since August 8. FxWirePro's Hourly Sterling Strength Index stood at -47.55 (Neutral) 1000 GMT. Immediate resistance is located at 1.2977 (61.8% retracement of 1.3173 and 1.2661), a break above could take it near 1.3006 (August 6 High). On the downside, support is seen at 1.2781 (10-DMA), a break below targets 1.2729 (August 20 Low). Against the euro, the pound was trading flat at 90.05 pence, having hit a low of 90.27 earlier, it’s lowest since August 9.
USD/CHF: The Swiss franc recouped some of its previous session losses, as U.S. and Chinese officials ended two days of trade talks on Thursday without any major breakthroughs. The major trades 0.2 percent down at 0.9837, having touched a low of 0.9808 on Wednesday, it’s lowest since June 8. FxWirePro's Hourly Swiss Franc Strength Index stood at 26.84 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9875 (38.2% retracement of 0.9982 and0.9808) and any break above will take the pair to next level till 0.9895 (50.0% retracement). The near-term support is around 0.9810 and any close below that level will drag it till 0.9785.
Equities Recap
European shares rose, boosted by gains among miners, banks, and car markers, while investors awaited a speech by Federal Reserve Chairman Jerome Powell for further clues on the direction of U.S. monetary policy.
The pan-European STOXX 600 index advanced 0.2 percent at 383.91 points, while the FTSEurofirst 300 index surged 0.3 percent to 1,503.71 points.
Britain's FTSE 100 trades 0.2 percent up at 7,575.58 points, while mid-cap FTSE 250 gained 0.1 percent to 20,687.06 points.
Germany's DAX rose 0.1 percent at 12,374.81 points; France's CAC 40 trades 0.2 percent higher at 5,429.86 points.
Commodities Recap
Crude oil prices rose to multi-week peaks, underpinned by signs that U.S. sanctions on Iran are already reducing global crude supply. International benchmark Brent crude was trading 0.7 percent up at $75.27 per barrel by 0920 GMT, having hit a high of $75.46 earlier, its highest since July 31. U.S. West Texas Intermediate was trading 0.9 percent higher at $68.43 a barrel, after rising as high as $68.48, its highest since August 8.
Gold prices gained, reversing some of its previous session losses, as the dollar eased and markets braced for a speech by the Federal Reserve chairman for fresh clues on the direction of U.S. monetary policy. Spot gold was 0.5 percent up at $1,190.77 an ounce at 0947 GMT, having hit a high of $1201.46 on Wednesday, its highest since August 14. U.S. gold futures were up 0.1 percent at $1,195 an ounce.
Treasuries Recap
The U.S. Treasuries slumped as all eyes today will be on the Kansas City Fed’s annual Jackson Hole symposium, as Fed Chair Powell is scheduled to deliver his speech on ‘monetary policy in a changing economy’. The yield on the benchmark 10-year Treasuries jumped 1-1/2 basis points to 2.83 percent, the super-long 30-year bond yields also surged 1-1/2 basis points to 2.98 percent and the yield on the short-term 2-year too traded nearly 1-1/2 basis points higher at 2.62 percent.
The German bunds suffered during late European session after the country’s gross domestic product (GDP) for the second quarter of this year, remained unchanged, meeting market expectations as well. The German 10-year bond yields, which move inversely to its price, rose 1/2 basis point to 0.347 percent, the yield on 30-year note traded tad higher at 1.014 percent and the yield on short-term 2-year remained flat at -0.610 percent.
The New Zealand bonds closed higher as investors have largely shrugged off the better-than-expected reading in the country’s trade balance data for the month of July, narrowing down compared to that in June. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, hovered around 2.600 percent, the yield on the long-term 20-year note slid 1 basis point to 2.910 percent and the yield on short-term 2-year also closed 1 basis point down at 1.700 percent.
The Japanese government bonds traded nearly flat during late Asian session after the country’s national consumer price inflation (CPI) for the month of July disappointed market estimates, although remaining unchanged from that in June. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose 1/2 basis point to 0.099 percent, the yield on the long-term 30-year note hovered around 0.843 percent and the yield on short-term 2-year too traded steady at -0.113 percent.
The Australian bonds slumped on the last trading day of the week as investors cashed in profits after a short-lived rally following political uncertainties. In the context of recent political developments, Scott Morrison has won party showdown and will replace Malcolm Turnbull to be the next Prime Minister. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 2 basis points to 2.547 percent, the yield on the long-term 30-year bond also jumped 2 basis points to 3.064 percent and the yield on short-term 2-year climbed 2-1/2 basis points to 2.007 percent.
