- Germany July IFO Business Climate 108.00 vs 107.5 revised, 107.2 expected.
- Germany July IFO Current Condition 113.9 vs 113.1 previous, 113.00 expected.
- Germany July IFO Expectations 102.4 vs 102.1 revised, 101.8 expected.
- Germany June Import prices -1.4% y/y vs -0.8% previous, -0.3% expected.
- Euro zone June M3 3month MA 5.1% vs 5.0% previous.
- UK July CBI Trends-orders -10 vs -7 previous, -5 expected.
- BoE Chief Econ Haldane – No need for rush to raise rates.
- Debt conundrum to keep Greek banks in months-long freeze.
- Shanghai stock index, in 2-sessions, wipes out 2-week’s worth of recovery.
- SSEC off close to 11% from Friday’s 4184 high.
- BOJ may taper sooner than expected.
- ECB’s Coeure- Premature to start discussing end of QE asset program.
- ECB’s Coeure- Greek debt restructures no longer the question but how to do it.
- UK’s Cameron set to call the EU referendum for June 2016.
- Greece-IMF talks on separate bailout related to debt restructuring standoff.
- Mitsubishi Motors to transfer some of US output to Japan.
- (0830 ET/1230 GMT) US June durable goods orders, +3.0% m/m eyed; last -2.2%, ex-defence -2.5%.
- (0830 ET/1230 GMT) US June ex-transport, +0.5% m/m eyed; last unchanged.
- (0830 ET/1230 GMT) US June non-defence cap goods ex-air, +0.4% m/m eyed; last -0.4%.
- (0900 ET/1300 GMT) Mexico Trade Balance consensus $-0.504 bln vs -1.017 bln in May.
- (1030 ET/1430 GMT) US July Dallas Fed manufacturing business index; last -7.0.
Key Events Ahead
- (1145 ET/1545 GMT) Fed Trade ops 15-yr F.Mae/Fr.Mac max $475mln.
- (1430 ET/1830 GMT) Fed Trade ops 30-yr Ginnie Mae max $900mln.
FX Recap
EUR/USD is supported below 1.1100 levels and currently trading at 1.1071 levels. It has made intraday high at 1.1112 and low at 1.0967 levels. The euro hit a 2-week high against a weak dollar on Monday, after Germany’s IFO survey for July rose to 108.0 from a revised 107.5 in June, beating forecasts and painted an upbeat picture of Europe’s largest economy. The euro rose 1.2 percent to $1.1113, from about $1.1084 before the IFO survey was released. Meanwhile, the IFO current assessment gauge ticked up to 113.9 from 113.1 the previous month, the IFO expectations gauge ticked higher to 102.4 from 102.0 previously. Initial support is seen around at 1.0789 and resistance at 1.1083 levels. Option expiries are at 1.0925 (754M), 1.0950-60(670M), 1.1000 (1.2BLN).USD/JPY is supported below 124.00 levels and posted a high of 123.82 levels. It has made intraday low at 123.24 and currently trading at 123.34 levels. The major came under fresh selling pressure after the Asian traders ditched the US currency mulling over Friday’s lack lustre home sales data from the US. US new home sales unexpectedly plummeted in June, falling 6.8% to 482,000 units, worse than the expected reading of 548,000 sales, and a 0.3% hike anticipated by markets. Looking ahead, markets turn their attention towards the New York session with the key US durable goods data on cards which may set the tone for Wednesday’s FOMC statement. Near term resistance is seen at 124.57 and support is seen at 120.63 levels. Option expiries are at 122.50 (550M), 124.00 (320M), 125.00 (300M).GBP/USD is supported above $1.5500 levels. It made an intraday high at 1.5543 and low at 1.5489 levels. Pair is currently trading at 1.5515 levels. The British Pound enjoyed some brief demand early Europe and following EUR’s strength, advancing against the greenback up to a daily high of 1.5543. The pair however, was unable to advance beyond a key resistance, the 38.2% retracement of its latest bullish run, and erased its intraday gains, trading steady around the 1.5500 level. Next of note in the pair will be tomorrow’s flash GDP figures for the second quarter, with consensus expecting the British economy to have expanded 0.7% inter-quarter and 2.6% over the last twelve months. Initial support is seen at 1.5413 and resistance is seen around 1.5734 levels. Option expiry is at 1.5750 (240M).NZDUSD is supported around 0.6600 levels and trading at 0.6610 levels and made intraday low at 0.6561 and high at 0.6616 levels. The New Zealand dollar is the biggest mover last week, jumping 1.5 percent after the RBNZ disappointed those who bet on a larger cut in interest rates and toned down its call for more falls for the kiwi. The Official Cash Rate (OCR) was lowered from 3.25% to 3.0% on last Thursday, and the central bank explicitly stated that further rate cuts were likely. New Zealand’s monthly merchandise trade balance fell into deficit for the first time since December last month. Today was data thin calendar for New Zealand. Market will eye on US macro economic data for the further movement. Initial support is seen at 0.6465 and resistance at 0.6722 levels. Option expiry is at 0.6660 (270M).AUD/USD is supported around 0.7300 levels and trading at 0.7295 levels. It has made intraday high at 0.7302 levels and low at 0.7264 levels. The Australian dollar reversed losses and edged higher versus the US dollar in Asia, lifting AUD/USD towards 0.73 barrier, as the AUD bulls jumped back into the bids as the US currency continues to lose ground following poor US housing data released on Friday. The Aussie shaved-off losses largely on profit-taking after the recent drop to fresh six-year lows stemmed by tumbling commodities prices and tepid China data. Moreover, the situation on the commodities market, with bullion prices reaching multi-year lows added extra bearish pressure to the Aussie. Traders now look forward to a host of crucial US economic data to be released in the week along with a slew of data from Australia as well. While Friday’s FOMC decision and Thursday’s RBA Stevens speech are expected to emerge the main markets movers this week. Initial support is seen at 0.7225 and resistance at 0.7647 levels.
Equity Recap
European stocks fell hard on Monday as concerns over China dominated financial markets in the wake of the biggest drop in Shanghai shares in eight years.UK’s FTSE 100 was flat in early trading, Germany’s DAX fell 0.5 pct and Europe’s FTSEurofirst 300 dropped 0.5 pct.Japan’s Nikkei slipped more than 1 percent, while MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.6 percent. Shanghai Composite Index ended down 8.5 pct at 3,725.56 points, while the China’s CSI300 Index closed down 8.6 pct at 3,818.73 points. HK’s Hang Seng Index ended down 3.1 pct at 24,351.96 points.
Commodity Recap
Oil prices plunged to near 4-month lows on Monday after a deep collapse in Chinese stock markets and on more evidence of a global oil supply glut that has halved prices over the past year. Brent crude for September hit an intra-day low of $54.25 a barrel, down 37 cents and its lowest since April 2. Brent was down 15 cents at $54.47 by 0858 GMT.Gold rose above $1,100 an ounce on Monday as a weaker dollar helped it distance from its lowest level since 2010, Spot gold was up 0.4 percent at $1,102.95 an ounce by 0642 GMT after falling for a fifth straight week last week, the longest run since late 2012.
Treasuries Recap
JGB prices ended the day narrowly mixed, with super-long JGBs softer in extremely thin trading amid a lack the BoJ’s purchase in the zone. The benchmark 5-yr JGB yield moved little at 0.10%, unchanged from last Friday, while the benchmark 10-yr JGB yield also fluctuated in a very narrow range before finishing at 0.41%, unchanged from last Friday’s afternoon close (06:00:00JT).German 10-year yields were a touch lower at 0.65 percent, their lowest in nearly three weeks, while Spanish, Portuguese and Italian 10-year yields all rose 5 basis points to 1.96, 2.58 and 1.02 percent, respectively.Gilts opened 5 ticks higher than the settlement of 116.74, as predicted, as core fixed income markets remain supported by concerns regarding weak growth in China and softer commodities. Buyers are respecting former lows on 10-year cash yields from July 7 at 1.895% with screens stalling at the day lows of 1.90%.New Zealand government bond yields were as much as 3 basis points lower with 10-year yields at 3.335 percent, the lowest since April. Australian government bond futures rose, with the 3-year bond contract up 3 ticks at 98.130. The 10-year contract gained 5.5 ticks to 97.2050.
The material has been provided by InstaForex Company – www.instaforex.com