Market Roundup
- China to increase state buying of stocks, says country’s top securities regulator.
- Chinese regulators to look into cases of malicious selling of shares.
- Some Greek creditors want Athens to legislate more reform measures before releasing aid.
- US Durable Goods* Jun 3.4%, f/c 3%, -2.1%-previous.
- US Non-def Cap Ex-Air* Jun 0.9%, f/c 0.4%, -0.4%-previous, positive data overlooked by haven flows. Brent Crude futures settle at 53.47/bbl down 2.11%.
Looking Ahead – Economic Data (GMT)
- No Significant Data
Looking Ahead – Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is supported around 1.1066 levels and currently trading at 1.1095 levels. It has made session high at 1.1127 and lows at 1.1090 levels. Euro extended gain against US dollar in New York session by hitting two weeks high at 1.1120 levels. The euro was last up 1.06 percent against the dollar at $1.10980, backed by strong economic data, boosted the euro early on in the European session. The Munich-based Ifo Institute’s business climate index rose to 108.0 from a revised 107.5 in June. That beat the consensus for a drop to 107.2 and was at levels consistent with a positive pace of growth. To the upside, immediate resistance can be seen at 1.1130. To the downside, major support level is located at 1.1015.
GBP/USD is supported around 1.5460 levels and currently trading at 1.5507 levels. It has made session high at 1.5524 and low at 1.5472 levels. The cable edged higher against US dollar in the New York session by punching higher from 1.5520 to 1.5594 by gaining almost 80 pips. The cable conceded to dollar last week on weak retail sales and dovish BOE minutes. All eyes are now on the first snapshot of second quarter growth due on Tuesday, which is expected to show Britain recovered from a surprise slowdown in early 2015 and grew by a quarterly 0.7 percent, back to the kind of pace seen at the end of last year. The Bank of England meets next week, with no rate change expected although the vote could expose the first split on the monetary policy committee (MPC) this year. To the upside, immediate resistance can be seen at 1.5645. To the downside, major support level is located at 1.5460.
USD/JPY is supported around 122.90 levels and currently trading at 123.27 levels. It has made session high at 123.30 and low at 122.98 levels. The biggest rout in Chinese shares in eight years stoked concerns on Monday over slowing growth in the world’s No. 2 economy, knocking down global equities and the prices of key commodities. The dollar fell sharply due to safety bidding on Japanese Yen. The greenback failed to recover and stayed close in the range of 2- week lows. The dollar recovered some ground against Japanese Yen after Core Durable Goods Orders came better than expected figures at 0.8% against 0.5%, the pair rebounded from 122.98 to hit session high at 123.28 in the late New York session. To the upside, immediate resistance can be seen at 123.50. To the downside, major support level is located at 122.90.
USD/CHF is supported around 0.9533 levels and currently trading at 0.962 3 levels. It has made session high at 0.9632 and low at 0.9549 levels. The pair fell back from 0.9600 levels to hit daily lows at 0.9550 levels , the pair after hitting support level at 0.9550 bounced back supported by better than expected Core Durable Goods Orders which printed 0.8% against the forecast of 0.5% , the pair after hitting lows almost gained 90pips to reclaim 0.9600 levels. The pair is all set to extend gains in the coming days as the dollar will start to gain strength ahead of Fed’s FOMC meeting on Wednesday. To the upside, immediate resistance can be seen at 0.9650. To the downside, major support level is located at 0.9523.
Equity Recap
European equities ended the day on downbeat note, falling for fifth straight day, following sell-offs in equity markets over China’s growth prospect worries.
The pan-European FTSEurofirst 300 closed down lower by 2.1 percent at 1,531.15 points, Germany’s DAX tumbled down, by closing at 2.4 percent, FTSE 100 closed down at 1 percent, and France’s CAC 40 closed down slipping by 2.5 percent.
US equities slipped on Monday fueled by Chinese stock-market rout. Dow Jones closed down 0.70 percent, at 17,446.14, Nasdaq closed down 0.94 percent, at 5,040.72 and S&P 500 closed down 11.53 points, or 0.55 percent, at 2,068.12.
Treasury Recap
U.S. Treasury prices rose on Monday after China’s stock market experienced its deepest slide in eight years, which unsettled investors globally and sent them to the relative safety of U.S. government bonds. Longer-term Treasury prices improved, while short-term prices were mixed.
Benchmark 10-year U.S. Treasuries traded up 16/32 of a point in price in late U.S. trading, driving the yield, which moves in the opposite direction, down to 2.21 percent, its lowest level since June 9.
The 30-year U.S. Treasury rose more than one full point in price, edging to its session high after a stronger-than-expected 3.4 percent rise in June U.S. durable goods orders.
The 30-year bond traded up 25/32 of a point in price, pulling the yield down to 2.93 percent.
Commodity Recap
Crude oil futures hit four-month lows on Monday after a steep drop in China’s stock markets sparked concern about the economic health of the world’s biggest energy consumer, while evidence of a growing crude glut mounted.
Brent crude oil settled down $1.15, or 2 percent, at $53.47 a barrel. In post-settlement, it fell to as low as $52.90, its lowest since mid-March.
U.S. crude closed down 75 cents, or 1.6 percent, at $47.39. It fell below $47 post-settlement, the lowest since late March.
Gold lost ground on Monday, moving closer to last week’s 5-1/2-year lows below $1,100 per ounce, with expectations for a near-term U.S. interest rate hike seen keeping momentum firmly with the bears.
Spot gold was down 0.6 percent at $1,092.36 an ounce by 3:20 p.m. EDT (1920 GMT), after falling for a fifth straight week last week, the longest slide since late 2012.
In contrast, U.S. gold for August delivery settled up 1 percent at $1,096.40 an ounce on short-covering after data late Friday showed that U.S. speculators had turned bearish on Comex gold for the first time in at least a decade in the week ended July 21.
The material has been provided by InstaForex Company – www.instaforex.com