Posted at 16 July 2019 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index advanced to a near 1-week peak, ahead of the U.S. data due later in the day, which is expected to imply that retail sales had edged up 0.1 percent in June. The greenback against a basket of currencies traded 0.3 percent up at 97.24, having touched a high of 97.28 earlier, its highest since July 10.
EUR/USD: The euro plunged to a 6-day low after data showed the sentiment among German investors deteriorated more sharply than expected in July, due to the unresolved trade dispute between China and the United States as well as political tensions with Iran. The European currency traded 0.2 percent down at 1.1230, having touched a low of 1.1227 earlier, its lowest since July 10. Immediate resistance is located at 1.1304 (50.0% retracement of 1.1412 and 1.1193), a break above targets 1.1366 (78.6% retracement). On the downside, support is seen at 1.1207 (July 5 Low), a break below could drag it below 1.1181 (June 18 Low).
USD/JPY: The dollar consolidated within narrow ranges as investors’ price in a 25-basis-point cut by the Federal Reserve at its meeting at the end of this month. Markets now await the release of U.S. retail sales figures for signs of improvement in the economy. The pair was trading flat at 107.94, having hit a low of 107.79 on Monday, its lowest since July 5. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales, capacity utilization, industrial production, business inventories, NAHB housing market index, and import and export price index. Immediate resistance is located at 108.32 (5-DMA), a break above targets 108.80 (July 8 High). On the downside, support is seen at 107.53 (July 3 Low), a break below could take it lower at 107.10 (June 26 Low).
GBP/USD: Sterling plunged to a 6-1/2 month low, weighed down by persistent Brexit-related uncertainties and disappointing release of UK claimant count change for June. Investors now await the BoE Governor Mark Carney's scheduled speech for further insight on the near-term monetary policy outlook. The major traded 0.8 percent down at 1.2417, having hit a low of 1.2408 earlier, it’s lowest since Jan. 3. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2571 (38.2% retracement of 1.2783 and 1.2439), a break above could take it near 1.2611 (50.0% retracement). On the downside, support is seen at 1.2400, a break below targets 1.2373 (Jan 3 Low). Against the euro, the pound was trading 0.5 percent down at 90.37 pence, having hit a low of 90.41 earlier, it’s lowest since Jan. 11.
USD/CHF: The Swiss franc eased, extending losses for the second straight session, as the greenback gained amid signs of an improving economic situation in the United States on the back of strong jobs data. The major trades 0.2 percent up at 0.9861, having touched a low of 0.9817 on Monday; it’s lowest since July 1. On the higher side, near-term resistance is around 0.9908 (July 12 High) and any break above will take the pair to next level till 0.9963 (June 6 High). The near-term support is around 0.9791 (June 20 Low), and any close below that level will drag it till 0.9738 (June 28 Low).
Equities Recap
European shares advanced, boosted by upbeat corporate results, while the greenback surged ahead of the U.S. retail sales data.
The pan-European STOXX 600 index gained 0.1 percent at 387.99 points, while the FTSEurofirst 300 rallied 0.1 percent to 1,526.63 points.
Britain's FTSE 100 trades 0.3 percent up at 7,552.47 points, while mid-cap FTSE 250 eased 0.05 to 19,583.04 points.
Germany's DAX rose 0.05 percent at 12,388.28 points; France's CAC 40 trades 0.2 percent higher at 5,590.92 points.
Commodities Recap
Crude oil prices surged as a resumption of output in the Gulf of Mexico after Hurricane Barry countered tensions in the Middle East. International benchmark Brent crude was trading 0.8 percent higher at $66.68 per barrel by 1032 GMT, having hit a high of $67.63 on Thursday, its highest since May 30. U.S. West Texas Intermediate was trading 0.8 percent up at $59.76 a barrel, after rising as high as $60.91 on Thursday, its highest since the May 23
Gold prices edged up as investors awaited U.S. retail sales data that could provide further insight on the strength of the economy amid lingering concerns over global economic slowdown. Spot gold was trading 0.1 percent up $1,414.71 per ounce by 1035 GMT, having touched a high of $1,427.06 on Thursday, its highest since July 3. U.S. gold futures were up 0.2 percent at $1,416.60 an ounce.
Treasuries Recap
The U.S. Treasuries slipped during the afternoon session, ahead of the country’s retail sales for the month of June and Fed Chair Jerome Powell’s speech, scheduled for today by 12:30GMT and 17:00GMT respectively. Further, the benchmark 10-year auction, due to be held on July 18 will be eyed for further direction to the debt market. The yield on the benchmark 10-year Treasury yield gained nearly 1 basis point to 2.099 percent, the super-long 30-year bond yields hovered around 2.614 percent and the yield on the short-term 2-year traded nearly 1-1/2 basis points higher at 1.846 percent.
The United Kingdom’s gilts surged during European trading hours as investors turned deaf towards a stronger-than-expected growth in average wages for the month of May as participants still await the results of the country’s consumer price inflation (CPI) for the month of June, scheduled to be released on July 17 by 08:30GMT. The yield on the benchmark 10-year gilts, slumped 2 basis points to 0.781 percent, the 30-year yield rose suffered 1-1/2 basis points to 1.393 percent and the yield on the short-term 2-year too traded 1-1/2 basis points down at 0.557 percent.
The German bunds jumped during European session after the country’s ZEW economic sentiment data for the month of July, disappointed market sentiments in July, while investors still eye the eurozone’s consumer price inflation (CPI) for the month of June, due on July 16 by 09:00GMT for further direction in the debt market. The German 10-year bond yields, which move inversely to its price, slipped 1 basis point to -0.306 percent, the yield on 30-year note slumped nearly 2 basis points to 0.308 percent and the yield on short-term 2-year traded tad down at -0.740 percent.
The Japanese government bonds gained at close, tracking a similar movement in the global peers, helped further by the Bank of Japan’s (BoJ) daily bond-buying operations, held earlier today. At close, the yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped 1-1/2 basis points to -0.135 percent, the yield on the long-term 30-year edged tad lower to 0.380 percent and the yield on short-term 2-year slumped 5 basis points to -0.185 percent.
The Australian government bond yields plunged during Asian session of the second trading day of the week after the Reserve Bank of Australia’s (RBA) July monetary policy meeting minutes hinted at further easing in its benchmark interest rate at its upcoming meetings. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged nearly 8 basis points to 1.387 percent, the yield on the long-term 30-year bond slumped 7-1/2 basis points to 2.044 percent and the yield on short-term 2-year traded nearly 5-1/2 basis points down at 0.954 percent.