Market Roundup
- US Building Permits: Number Jul 1.119m, f/c 1.232m, 1.337m-previous.
- US Housing Starts Number MM Jul 1.206m, f/c 1.190m, 1.204m-previous.
- ECB lowers ELA cap, to EUR 89.7b, for Greek banks as liquidity conditions improve.
- Spain’s Guindos sees execution risks in Greece, warns of ‘populist siren songs’.
- China concerns reduce emerging market appetite to record low (BoA ML survey).
- Fonterra’s GDT Price Index rose 14.8%, with an average selling price of $1,974 per tonne, volume -20.7%.
Looking Ahead – Economic Data (GMT)
- 22:45 New Zealand Producer Prices – Inputs QQ Q2 -1.1%-previous
- 22:45 New Zealand PPI Output* Q2 -0.9%-previous
- 23:50 Japan Exports YY* Jul f/c 5.5%, 9.5%-previous
- 23:50 Japan Imports YY* Jul f/c -7.9%, -2.9%-previous
- 23:50 Japan Trade Balance Total Yen* Jul f/c -56.7b, -69.0b-previous
Looking Ahead – Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1010 levels and currently trading at 1.1032 levels. The pair has made session high at 1.1045 and hit lows at 1.1020 levels. The euro extended losses against US dollar on Tuesday, as the dollar was supported by upbeat housing data, euro slipped to hit fresh session lows at 1.1041 in the late New York session. The dollar rose against the euro , after getting a lift from data showing U.S. housing starts neared an eight-year peak in July, bolstering expectations that the Federal Reserve will raise interest rates as soon as next month. The euro was last off 0.45 percent at $1.1033 against the greenback. Meanwhile, the European Central Bank cut emergency liquidity assistance (ELA) for Greek banks on Tuesday, in line with a request from Athens, several sources said, a positive sign that lenders are stabilizing their operations and building cash reserves. To the upside, immediate resistance can be seen at 1.1060. To the downside, immediate support level is located at 1. 1016 levels.
GBP/USD is supported in the range of 1.5650 levels and currently trading at 1.5664 levels. It reached session high at 1.5715 and dropped to session low at 1.5644 levels. The sterling rose against US dollar on Tuesday, after the British pound was boosted by stronger-than-expected inflation data for July, including an uptick in core inflation, which hit a five-month high. The data showed annual consumer price inflation unexpectedly ticked up 0.1 percent in July from zero and the underlying measure – which strips out energy, food, alcohol and tobacco – rose to its highest level since February. The inflation numbers bolstered expectations that the Bank of England will raise interest rates in coming months and helped sterling gain against the US dollar. British pound drifted to lower levels from highs, towards 1.5660 range after the market cooled down during the late American session. To the upside, immediate resistance can be seen at 1.5685. To the downside, immediate support level is located at 1.5635 levels.
USD/JPY is supported around 124.20 levels and currently trading at 124.36 levels. It peaked to hit session high at 124.46 and made session lows at 124.23 levels. The pair traded in a very choppy range in the late European session, in-between 124.21 and 124.34 levels. After the upbeat US housing data release, In the early New York session, the pair advanced and made session high at 124.45. U.S. housing starts rose to a near eight-year high in July as builders ramped up construction of single-family homes, suggesting the economy was firing on almost all cylinders. That followed Monday’s strong homebuilder sentiment data. Minutes from the U.S. Federal Reserve’s most recent policy meeting were due for release on Wednesday, and market participants will be looking for clues on how soon the central bank will raise interest rates. Many expect a move this year, possibly as early as September. To the upside, immediate resistance can be seen at 124.47. To the downside, immediate support level is located at 124.13 levels.
USD/CAD is supported at 1.3040 levels and is trading at 1.3055 levels. It has made session high at 1.3082 and lows at 1.3052 levels. – The Canadian dollar was stronger against its U.S. counterpart on Tuesday as crude prices held steady and investors paused ahead of domestic economic data due at the end of the week. Oil prices stayed near 6-1/2 year lows, and lacking other drivers on Tuesday, the Canadian dollar was expected to take direction from the commodity, a major Canadian export. The currency was range-bound, trading between C$1.3055 and C$1.3126 in the session. The Canadian dollar, which was stronger against most of the key currency counterparts, is expected to trade between C$1.3040 and C$1.3160 against the U.S. dollar in the coming days. Investors are eagerly awaiting Canadian inflation and retail sales data set to be released on Friday. To the upside, immediate resistance can be seen at 1.3060. To the downside, immediate support level is located at 1.3050 levels.
Equities Recap
European stock markets closed lower on Tuesday, as commodity shares related to metal and energy struggled and incurred losses. UK’s benchmark FTSE 100 closed ,down by 0.2 percent, the pan-European FTSEurofirst 300 closed, up by 0.3 percent, Germany’s Dax closed, down by 0.2 percent, France’s CAC closed, down by 0.2 percent, Italy’s FTSE MIB closed, down by 0.1 percent. Meanwhile, Spain’s IBEX 35 was Flat at close.
US stocks closed lower on Tuesday, after Wal-Mart profits slipped and concerns over China’s economy. Dow Jones closed, down by 0.18 percent, S&P 500 closed, down by 0.26 percent, Nasdaq closed, down by 0.62 percent.
Treasuries Recap
U.S. Treasury yields rose on Tuesday as investors awaited the release on Wednesday of minutes of the Federal Reserve’s July meeting, which will be evaluated for any new signs that an interest rate increase is likely in September.
Benchmark 10-year note yields were last 2.19 percent, up from 2.17 percent before the data.
Commodities Recap
Oil rallied on Tuesday, with U.S. crude settling up nearly 2 percent, after bullish economic data and bets for lower crude stockpiles in the United States, the world’s largest oil consumer.
New York-traded U.S. crude settled up 75 cents, or 1.8 percent, at $42.62 a barrel. That put it at more than $1 above Friday’s low of $41.35, which was the market’s bottom since March 2009.
Brent, the London-traded global benchmark for crude, settled up 7 cents at $48.81, steadying from a three-day decline. Brent was initially down on Tuesday after stock markets in China, the second largest oil consumer, fell 6 percent.
Gold fell on Tuesday, as the dollar rebounded following upbeat U.S. housing data that supported views of a looming interest rate increase by the Federal Reserve, while silver tumbled on the heels of falling copper prices.
Spot gold was down 0.1 percent at $1,116.73 an ounce by 3:19 p.m. EDT (1919 GMT), after falling as much as 0.7 percent. U.S. gold for December delivery settled down 0.1 percent at $1,116.90 an ounce.
The material has been provided by InstaForex Company – www.instaforex.com