Market Roundup
- U.S. crude oil stocks rise 4.7m barrels, biggest 1-wk rise since April; opec oil falls.
- Gold eases after 4-day gain, awaiting signal on U.S. rates.
- Beige Book sees tightening labor markets, continued growth.
- US ADP National Employment Aug 190.0k, forecast- 201k, 177k-previous.
- US Labor Costs Revised Q2 -1.4%, forecast -1%, 0.5%-previous.
- US Productivity Revised Q2 3.3%, forecast-2.8%, 1.3%-previous.
- US Durables Ex-Transport R MM Jul 0.4%, 0.6%-previous.
- US Nondef Cap Ex-Air R MM Jul 2.1%, 2.2%-previous.
- US Factory Ex-Transport MM Jul -0.6%, 0.6%-previous.
- Brazil Industrial Output YY* Jul -8.9%, forecast -6.2%, -2.8%-previous, another data miss.
- Brazil’s Rousseff says fiscal deficit temporary, Levy not weakened.
- Moody’s: Global headwinds will keep Latin America’s credit conditions under pressure through ’16.
- Templeton’s Mark Mobius says China’s stock selling curbs “alarming”.
- Bill Gross: Fed tightening cycle could create self-inflicted financial instability, may have missed window to hike rates in early 2015.
Looking Ahead – Economic Data (GMT)
- 23:30 Australia AIG Services Index Aug 54.12-previous
- 23:50 Japan Foreign Bond Investment w/e -273.8b-previous
- 23:50 Japan Foreign Invest JP Stock w/e -461.9b-previous
- 01:30 Australia Retail Sales MM* Jul forecast- 0.4%, 0.7%-previous
- 01:30 Australia Trade Balance G&S (AUD) Jul forecast -3100m, -2933m-previous
- 01:30 Australia Goods/Services Imports Jul 4%-previous
- 01:30 Australia Goods/Services Exports Jul 3%-previous
Looking Ahead – Events, Other Releases (GMT)
- 01:30 Japan- Bank of Japan board member Takahide Kiuchi speaks in Aomori
Currency Summaries
EUR/USD is likely to find support at 1.1155 levels and currently trading at 1.2230 levels. The pair has made session high at 1.1249 and hit lows at 1.1226 levels. The dollar rose on Wednesday against euro, as fragile global stock markets steadied and U.S. hiring data encouraged speculation that Federal Reserve policymakers will raise interest rates later this month. Stock market gains, including a rise of about 1 percent in early Wall Street trading, slowed a rush to unwind carry trades that have boosted the safe-haven yen and the low-yielding euro in the past few weeks. Both fell against the dollar on Wednesday. China’s slowing and worries about global growth had prompted investors to cut unfavorable bets in the yen and the euro, both of which have been popular for funding trades involving the sale of low-yielding currencies to buy riskier, higher-yielding assets. The euro fell 0.6 percent against the dollar to $1.1210 in the session , having rallied 0.9 percent on Tuesday when it rose to $1. focus now shifts to Thursdays ECB meeting. The European Central Bank (ECB) is set to announce its interest rate decision. And is expected to cut its inflation forecast, primarily on weak commodity prices. To the upside, immediate resistance can be seen at 1.1281. To the downside, immediate support level is located at 1.1206 levels.
GBP/USD is supported in the range of 1.5215 levels and currently trading at 1.5307 levels. It reached session high at 1.5325 and dropped to session low at 1.5288 levels. Sterling hit its lowest level against the dollar in almost three months on Wednesday as investors continued to bet that the Bank of England won’t raise interest rates until well into next year. The UK construction sector showed a slight increase in activity last month but not as much as economists had expected, fueling the belief that growth is slowing and that the Bank of England need not raise rates imminently. The pound hit low at $1.5270 against the dollar, down slightly on the day and the lowest since June 9. Markit construction Purchasing Managers’ Index (PMI) was released in early European session which printed 57.3 in August from 57.1 in July, indicating solid growth but below the 57.5 forecast. The cable traded between $1.5325 and C$1.5266 levels in the session. To the upside, immediate resistance can be seen at 1.5325. To the downside, immediate support level is located at 1.5265 levels.
USD/JPY is supported around 119.65 levels and currently trading at 120.23 levels. It peaked to hit session high at 120.29 and made session lows at 120.03 levels. US dollar was firmer against Japanese yen on Wednesday, after the ADP national employment report showed private payrolls increased to 190,000 last month. It was a step up from the 177,000 printed in July and in line with the trend for the first seven months of this year, but was below the analysts forecast of 201,000 jobs. The USD/JPY is trading in a very choppy range from past two sessions trading between 120.44 and 120.00 handle , traders remain wary of taking up fresh positions in this pair, until they receive more clarity on when the Fed will rise first rate hike in nearly a decade. The Fed has been waiting to rise the interest rates to the strengthen US economy off late. U.S. non-farm payrolls report on Friday is being closely watched for further action by the Fed. To the upside, immediate resistance can be seen at 120.40. To the downside, immediate support level is located at 120.00 levels.
USD/CAD is supported at 1.3230 levels and is trading at 1.3279 levels. It has made session high at 1.3324 and lows at 1.3198 levels. The Canadian dollar was steady against its U.S. counterpart on Wednesday and the loonie outperformed other main currencies as crude oil prices rebounded from earlier losses. The loonie kept to a relatively narrow trading range ahead of trade and labor data due on Thursday and Friday that could influence whether the Bank of Canada will stand pat or contemplate another rate cut. Market participants hope the numbers will bring more clarity on whether the impact of cheap crude has been contained and whether a low Canadian dollar has helped stimulate other parts of the economy. The loonie traded between C$1.3198 and C$1.3324 so far in the session. Loonie after gaining towards 1.3198 after crude oil data lost the ground to US dollar in mid New York session, the pair was back to the levels were it was trading earlier the data front, Canada’s trade balance is set to released in early US session. forecast suggests a deficit of C$1.3 billion in July. With policymakers looking for a stronger export sector to help drive the economy, focus will be on whether the sharp gain exports saw in June will be sustained. To the upside, immediate resistance can be seen at 1.3275. To the downside, immediate support level is located at 1.3240 levels.
Equities Recap
European equities gained on Wednesday after a volatile start to the week, drawing support from brokerage measures in China to invigorate the country’s battered markets and from hopes for policy easing by major central banks.
UK’s benchmark FTSE 100 closed up by 0.7 percent, the pan-European FTSEurofirst 300 ended the day up by 0.4 percent, Germany’s Dax ended up by 0.5 percent, France’s CAC finished the day up by 0.6 percent.
U.S. stocks were up more than 1 percent on Wednesday, supported by U.S. data and technology stocks which led a rebound from Tuesday’s steep losses. Dow Jones closed up by 1.82 percent, S&P 500 ended up by 1.82 percent, Nasdaq finished the day up by 2.44 percent.
Commodities Recap
Gold eased on Wednesday as a rebound in stocks and the dollar arrested a four-day rise, with uncertainty over the timing of a looming U.S. rate hike limiting price moves ahead of key U.S. non-farm payrolls data on Friday.
Spot gold was down 0.5 percent at $1,134 an ounce at 2:48 p.m. EDT (1848 GMT), while U.S. gold futures for December delivery settled down 0.5 percent at $1,133.60.
Oil prices ended nearly 2 percent higher on Wednesday in volatile trade as rallying equities on Wall Street pulled crude up from lows after futures sank on concerns about global oversupply.
Brent October crude rose 94 cents to settle at $50.50 a barrel, having recovered from a $47.74 low. It reached $51 post-settlement. U.S. October crude rose 84 cents to settle at $46.25, after falling to $43.21 and reaching $46.77.
Treasuries Recap
U.S. safe-haven Treasuries prices slipped on Wednesday on greater risk appetite, with long-dated prices falling the most on continued speculation of foreign central bank selling.
Benchmark 10-year Treasuries were last down 5/32 in price to yield 2.19 percent from 2.17 percent late Tuesday. U.S. 30-year Treasuries were last off 18/32 to yield 2.96 percent from 2.93 percent late-year notes were down slightly to yield 0.71 percent, from a yield of 0.72 percent late Tuesday.
The material has been provided by InstaForex Company – www.instaforex.com