Market Roundup
- Dollar mixed as reviving risk appetite drags on yen, euro.
- Shares rally on China stimulus hopes, strong European data.
- Copper jumps to 4-week peak after China data.
- China CB: intervention one of causes of fall in FX reserves, C/A to remain in surplus LT.
- China CB: Implemented FX forward controls due to speculative trading in market, controls to help stabilize China’s financial system.
- US NFIB Business Optimism Index Aug forecast- 95.9, 95.4-previous.
- US Employment Trends* Sep forecast- 128.82, 127.64-previous.
- Mexico says can’t consider oil output cut now, not in talks with OPEC.
- Brazil’s ’16 inflation view rises for 5th week, to 5.58 percent, ’15 inflation rises to 9.29 from 9.28%.
- Nigeria to be phased out of JP Morgan’s bond index.
Looking Ahead – Economic Data (GMT)
- 00:30 Australia Consumer Sentiment Sep 7 80%-previous
- 01:30 Australia Housing Finance* Jul forecast-0.8%, 4.40%-previous
- 01:30 Australia Invest Housing Finance* Jul -0.70%-previous
- 05:00 Japan Consumer Confidence. Index* Aug 40.3-previous
Looking Ahead – Events, Other Releases (GMT)
- 02:00 Australia-RBA Deputy Governor Lowe speaks at a Committee for Economic Development of Australia (CEDA) event in Melbourne
Currency Summaries
EUR/USD is likely to find support at 1.1140 levels and currently trading at 1.1198 levels. The pair has made session high at 1.1200 and hit lows at 1.1152 levels. The dollar was mixed on Tuesday as rising stock markets and positive German economic data gave global investors reasons to throttle down the risk aversion tactics that recently boosted the euro and yen. Traders said the dollar was unlikely to move much until Sept. 17, when U.S. Federal Reserve policymakers may announce an interest rate increase, gained against the yen, fell against sterling and had changed little by day’s end versus the euro. German exports and imports hit record highs in value terms in July, suggesting foreign appetite for goods from Europe’s largest economy remained robust despite the slowdown in China, while domestic demand also was holding up well. The euro recovered from early losses and was last up 0.1 percent against the dollar at $1.1184. To the upside, immediate resistance can be seen at 1.1215. To the downside, immediate support level is located at 1.1177levels.
GBP/USD is supported in the range of 1.5332 levels and currently trading at 1.5395 levels. It reached session high at 1.5400 and dropped to session low at 1.5353 levels. Sterling rose for a second day on Tuesday, pulling away from last week’s four-month low against the dollar, buoyed by improved risk sentiment in global markets and news that a Japanese insurer was buying a British company. Sterling hit a one-week high of $1.5413, recovering from the four-month low of $1.5163 struck on Friday. Last week, a slew of disappointing data cast doubts over whether the Bank of England would be able to raise interest rates any time soon, especially given the worries over market volatility and global growth stemming from a Chinese slowdown. Investors will be keenly watching Thursday’s BoE’s Monetary Policy Committee meet and release minutes from the meeting. Last month just one MPC member voted in favour of an immediate rate hike. To the upside, immediate resistance can be seen at 1.5424. To the downside, immediate support level is located at 1.5374 levels.
USD/JPY is supported around 119.50 levels and currently trading at 119.92 levels. It peaked to hit session high at 120.02 and made session lows at 119.63 levels. The dollar edged high against Japanese yen on Tuesday, after Stock markets worldwide rallied on Tuesday on hopes of more stimulus measures in China and on strong German trade data. The Japanese yen’s safe haven status took a beating as investors looked for opportunities elsewhere for their investments. Chinese stocks ended nearly 3 percent higher, and European stocks were up 1.5 percent. The renewed risk appetite led the dollar to gain against the safe-haven yen, but the greenback still inched lower against the euro. In the US session yen shed 0.6 percent against the dollar to trade at 120 yen. To the upside, immediate resistance can be seen at 120.20. To the downside, immediate support level is located at 119.54 levels.
USD/CAD is supported at 1.3180 levels and is trading at 1.3208 levels. It has made session high at 1.3266 and lows at 1.3193 levels. The Canadian dollar strengthened against its U.S. counterpart on Tuesday, boosted by a rising price for Brent crude and ahead of Wednesday’s Bank of Canada interest rate decision. The central bank is expected to hold rates steady until 2017, although a quarter of economists polled last week said the bank could cut for a third time this year. The central bank has cut rates twice this year to boost an economy hit by the slump in oil prices. Despite a confirmation that the economy was in a mild recession in the first half of 2015, signs of growth at the end of the second quarter as well as recent strong export figures are expected to stay the bank’s hand. The loonie traded between C$1.3193 and C$1.3308 so far during the session. To the upside, immediate resistance can be seen at 1.3233. To the downside, immediate support level is located at 1.3184 levels.
Equities Recap
European equities rose on Tuesday, with Germany’s benchmark DAX share index outperforming the broader market after strong trade data.
UK’s benchmark FTSE 100 closed up by 1.3 percent, the pan-European FTSEurofirst 300 ended the day up by 1.3 percent, Germany’s Dax ended up by 1.7 percent, France’s CAC finished the day up by 1.2 percent.
U.S. stocks jumped 2 percent on Tuesday, bouncing after steep losses last week and a China-fueled rebound in global equities. Dow Jones closed up by 2.4 percent, S&P 500 ended up by 2.49 percent Nasdaq finished the day down by 2.69 percent.
Treasuries Recap
U.S. Treasury yields rose on Tuesday as investors prepared for the possibility that the Federal Reserve will increase interest rates next week for the first time in almost a decade, and as the Treasury sells $58 billion in new supply this week.
Five-year notes, which are among the most sensitive to interest rate changes, dropped 9/32 in price to yield 1.53 percent, up from 1.47 percent. Benchmark 10-year notes were last down 19/32 in price to yield 2.19 percent, up from 2.13 percent late on Friday.
Commodities Recap
Brent crude settled up 4 percent on Tuesday as strength in stock markets helped the global oil benchmark recoup the bulk of its losses from the previous session.
London-traded Brent settled up $1.89 at $49.52 a barrel. It fell $1.98 in the previous session.U.S. crude settled down 11 cents, or almost a quarter percent, at $45.94 a barrel. It had fallen almost $2 at one point.
Gold firmed on Tuesday as a retreat in the dollar index helped the metal snap a four-day losing streak, but bullion remained close to 3-week lows as uncertainty over a looming U.S interest rate hike persisted.
Spot gold was up 0.2 percent at $1,121.10 an ounce at 2:56 p.m. EDT (1856 GMT), while U.S. gold futures for December delivery settled down 40 cents at $1,121 an ounce.
The material has been provided by InstaForex Company – www.instaforex.com