Market Roundup
- China vows more targeted policy steps to lift economy.
- IMF won’t participate in Greek bailout at this stage (FT), EUR/USD to session lows.
- Greek official dismisses FT report says IMF participating in talks.
- Banxico sells USD 200 million in auction after peso hits record low.
- Banxico holds Mexico rate steady will focus on exchange rate and relative to US monetary policy stance, raises daily intervention to USD 200 million from 52 million to support peso USD/MXN moves dramatically lower.
- US GDP Advance Q2 2.3%, f/c 2.6%, 0.6%-previous.
- US GDP Cons Spending Advance Q2 2.9%, 1.8%-previous.
- US GDP Deflator Advance Q2 2%, f/c 1.5%, 0.1%-previous.
- US Core PCE Prices Advance Q2 1.8%, f/c 1.6%, 1%-previous.
- Janus’ Gross: Fed recognizing 0% interest rates increasingly have negative consequences.
Looking Ahead – Economic Data (GMT)
- 23:30 Japan All Household Spending YY* Jun f/c 1.7%, 4.8%-previous
- 23:30 Japan All Household Spending MM* Jun f/c -0.5%, 2.4%-previous
- 23:30 Japan CPI, Core Nationwide YY Jun f/c 0%, 0.1%-previous
- 23:30 Japan CPI, Overall Nationwide* Jun 0.5%-previous
- 23:30 Japan CPI Core Tokyo YY* Jul f/c 0%, 0.1%-previous
- 23:30 Japan CPI, Overall Tokyo* Jul 0.3%-previous
- 23:30 Japan Unemployment Rate Jun f/c 3.3%, 3.3%-previous
- 05:00 Japan Construction Orders YY Jun -7.4%-previous
- 05:00 Japan Housing Starts YY Jun f/c 2.9%, 5.8%-previous
- 01:00 New Zealand NBNZ Business Outlook Jul -2.3%-previous
- 01:00 New Zealand NBNZ Own Activity Jul 23.6%-previous
- 01:30 Australia PPI QQ* Q2 0.5%-previous
- 01:30 Australia PPI YY* Q2 0.7%-previous
- 01:30 Australia Private Sector Credit* Jun f/c 0.5%, 0.5%-previous
- 01:30 Australia Housing Credit* Jun 0.5%-previous
Looking Ahead – Events, Other Releases (GMT)
- No Significant Events
Currency SummariesEUR/USD is supported around 1.0865 levels and currently trading at 1.0907 levels. It has made session high at 1.0956 and lows at 1.0892 levels. Euro continued to decline against US dollar on Thursday, after US GDP data and Initial Jobless claims came slightly positive. US GDP data came slightly low at 2.3% against actual forecast of 2.6%. Meanwhile, Initial Jobless claims printed better than expected figures at 267k against the 270k forecast. The euro shed 0.5 percent against the US dollar at $1.0925. The euro faced further selling pressure after, International Monetary Fund (IMF) said in a report that, it couldn’t officially join bailout talks with Greece until the debt-laden nation agrees to comprehensive reforms. The decision means that an IMF decision on any further bailout for Greece could stretch for months and possibly into 2016 and raises questions about whether it will ultimately join euro zone efforts, according to the newspaper’s report. To the upside, immediate resistance can be seen at 1.0965. To the downside, major support level is located at 1.0820 levels.GBP/USD is supported around 1.5490 levels and currently trading at 1.5585 levels. It has made session high at 1.5630 and low at 1.5560 levels. Sterling hit a one-week high on a trade-weighted basis on Thursday, bucking a broad dollar rally on expectations that the Bank of England is likely to follow the U.S. Federal Reserve in raising interest rates in the coming months. The pound was the only major currency to remain steady versus the greenback on Thursday, which was boosted by data that showed U.S. economic growth accelerated in the second quarter as consumer spending picked up, encouraging bets on a September U.S. rate hike. Against the dollar, sterling was flat on Thursday at $1.5592. Recent data out of Britain has been robust, with consumer demand holding up well and the pace of growth accelerating in the second quarter, while BoE Governor Mark Carney has indicated a decision on rates will come around the turn of the year. To the upside, immediate resistance can be seen at 1.5670. To the downside, major support level is located at 1.5460 levels.USD/JPY is supported around 124.18 levels and currently trading at 124.31 levels. It has made session high at 124.57 and low at 123.14 levels. US dollar inched higher against Japanese yen on Thursday pair accelerated to higher level, even though, the US GDP figures came slightly below expectations at 2.3% against the forecast of 2.6%. The US dollar appreciated 0.3 percent against yen at 124.33 levels. The dollar rose to its highest in a week against a basket of currencies on Thursday as news of faster U.S. economic growth in the second quarter supported expectations that the U.S. Federal Reserve will raise interest rates as early as September. To the upside, immediate resistance can be seen at 124.50. To the downside, major support level is located at 123.70 levels.USD/CAD is supported around 1.2910 levels and currently trading at 1.3000 levels. It has made session high at 1.3042 and low at 1.2963 levels. The Canadian dollar softened against a rallying greenback on Thursday, but was off session lows, as markets cheered the Federal Reserve’s relatively upbeat outlook for the U.S. economy and solid U.S. economic growth data. Data showed accelerating U.S. growth in the second quarter and a large upward revision of the first quarter, supporting the view that the Federal Reserve is set to raise interest rates this year. The U.S. dollar’s strength offset the impact on the loonie of a rebound in prices for crude, a major Canadian export. U.S. GDP expanded at a 2.3 percent annual rate in the second quarter, a solid rebound from the first quarter, which was revised to a 0.6 percent gain versus the previously reported 0.2 percent decline. To the upside, immediate resistance can be seen at 1.3040. To the downside, major support level is located at 1.2940 levels.Equities Recap
European stocks closed higher on Thursday after encouraging corporate earnings. UK’s benchmark FTSE 100 gained 0.7 percent at close, the pan-European FTSEurofirst 300 closed down, up by 0.6percent, Germany’s Dax closed up by 0.3 percent, France’s CAC closed up at 0.5 percent, Italy’s FTSE MIB up closed up by 0.6 percent at 23,396.09 points. Meanwhile, Spain’s IBEX 35 slipped down 0.6 percent at close.US Stocks ended flat on Thursday after positive corporate earnings and slightly better US economic data. Dow Jones closed down by 3.87 points, or 0.02 percent, at 17,747.52, S&P 500 closed up 0.43 points, or 0.02 percent, at 2,109.00, Nasdaq closed up 18.02 points, or 0.35 percent, at 5,129.76.Treasuries RecapU.S. Treasuries prices were mixed on Thursday and the yield curve turned flatter following strong U.S. economic growth data that led to gains for longer-dated debt and stable short-end prices as expectations of a September U.S. rate rise heightened.In the wake of the data, the 10-year Treasury price turned positive, rising 2/32 of a point in price to pull the yield, which moves in the opposite direction, down to 2.26 percent.The 30-year bond rose 23/32 of a point in price, pushing the yield down to 2.95 percent. Before the data the 30-year bond was trading at a yield of 3.00 percent. On the shorter-end of the yield curve, two-year Treasuries were off just 1/32 of a point in price, yielding 0.7275 percent. Before the data the yield was up to 0.7354 percent. Commodities RecapGold fell 1 percent on Thursday to a near a 5-1/2-year low as the dollar rose after data showed the U.S. economy improved in the second quarter, supporting views that the Federal Reserve would lift rates by year-end.Spot gold dropped as much as 1.3 percent to a session low of $1,081.85 an ounce in earlier trading, not far from its cheapest since February 2010 at $1,077 hit after a selloff on July 20. It was down 0.7 percent at $1,089.11 by 2:07 p.m. EDT (1807 GMT).U.S. gold for August delivery slipped 0.4 percent to settle at $1,088.40 an ounce.Crude futures settled down on Thursday, pressured by a rally in the dollar which countered bullish sentiment from a drawdown in U.S. stockpiles that was much steeper than expected.Oil has slid more than $10 a barrel over the past month. Global benchmark Brent neared a six-month trough earlier this week and U.S. futures neared four-month lows, pressured by a global glut, a resurgent dollar and China’s tumbling stock market.Brent settled down 7 cents, or 0.1 percent, at $53.31 a barrel.U.S. crude closed lower by 27 cents, or 0.6 percent, at $48.52.
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