Market Roundup
- Fed’s Fischer U.S. inflation temporarily ‘very low’, Global deflation is a factor that bother US.
- Fed’s Lockhart disposed to Sept liftoff but waiting a meeting or 2 won’t be decisive for US economy.
- Fed’s Lockhart: Fed “close” to hiking rates, U.S. economy near normal, major risks passed, oil prices make it hard to measure inflation, progress on inflation important is setting pace of rate hikes after liftoff.
- BOE’s Miles case to raise rates in Aug perfectly reasonable, but not compelling, longer BOE delays the steeper the rise in hikes.
- First Greek bank bailout cash could come before stress test (Euro Zone source).
- IMF believes Greece needs third bailout worth EUR 90 billion.
- Greece, creditors set 2015 primary surplus target to zero-source.
- Brazil CB poll sees ’15 inflation higher, GDP lower.
Looking Ahead – Economic Data (GMT)
- 22:45 New Zealand Electronic Card Retail Sales Jul 0.50%-previous
- 22:45 New Zealand Electronic Card Retail Sales YY* Jul 5.00%-previous
- 01:30 Australia NAB Business Conditions Jul 11-previous
- 01:30 Australia NAB Business Confidence Jul 10-previous
Looking Ahead – Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is supported around 1.0970 levels and currently trading at 1.1018 levels. It has made session high at 1.1041 and lows at 1.0935 levels. The pair edged higher in New York session Monday, after U.S. Federal Reserve’s vice chairman stoked uncertainty over whether the U.S. central bank would hike rates in September. Fed Vice Chairman Stanley Fischer told Bloomberg TV that the global deflationary trend “bothers” the Fed, but is one of many factors the U.S. central bank is watching. Euro recovered from earlier losses suffered against the dollar to hit one week high at 1.1041, in the late New York session. Meanwhile, Greece and its international creditors sought to put final touches to a multi-billion euro bailout accord on Monday to keep the country financially afloat and meet an important debt repayment to the European Central Bank within days. To the upside, immediate resistance can be seen at 1.1050. To the downside, immediate support level is located at 1.0990 levels.
GBP/USD is supported around 1.5525 levels and currently trading at 1.5589 levels. It has made session high at 1.5608 and low at 1.5495 levels. Sterling inched up against a broadly weaker dollar on Monday but was still trading near a three-week low, as investors bet the U.S. Federal Reserve was almost certain to precede the Bank of England in raising interest rates. The pair after hitting daily lows at 1.5464 rebounded strongly to hit 1.5600 levels in the late New York session. Further trend of this pair will be influenced by, Wednesdays Average earnings index and Claimant count change data. Meawhile, Bank of England policymaker David Miles said on Monday he had seen a reasonable case to vote for higher interest rates at his final policy meeting last week but did not find the arguments conclusive. To the upside, immediate resistance can be seen at 1.5625. To the downside, immediate support level is located at 1.5560 levels.
USD/JPY is supported around 124.10 levels and currently trading at 124.58 levels. It has made session high at 124.72 and low at 124.45 levels. The pair has consolidated after incurring losses last Friday to trade above 124.50 levels. In the American session the pair hit lows at 124.43 and rebounded to trade around 124.64 levels in the late trading hours. In the coming Asian hours, Japan’s M2 Money Stock and 30-Year JGB Auction is set to be released. Meanwhile, earlier in day Atlanta Fed President Dennis Lockhart said, Economic conditions in the United States have largely returned to normal and a Federal Reserve decision to raise interest rates should come soon. To the upside, immediate resistance can be seen at 124.70. To the downside, immediate support level is located at 124.30 levels.
USD/CAD is supported around 1.2990 levels and currently trading at 1.3002 levels. It has made session high at 1.3032 and low at 1.2989 levels. The Canadian dollar edged against the greenback in relatively quiet trading on Monday, as the U.S. dollar slips from nearly 4-month high against basket of currencies on rate hike uncertainty. The Canadian dollar has traded between C$1.3148 and C$1.2988 so far in the session, there were no major Canadian or U.S. economic data released on Monday. Commodity related currencies may be impacted sooner or later as, China is facing increasing pressure to further stimulate is economy following disappointing data over the weekend that showed producer prices in July, which had been sliding continuously for more than three years, hit their lowest point since late 2009, while exports, hurt by softer global demand and a strong Yuan policy, tumbled 8.3 percent last month. To the upside, immediate resistance can be seen at 1.3040. To the downside, immediate support level is located at 1.2990 levels.
Equities Recap
European stock markets climbed higher on Monday as a rise in some major financial shares offset the impact of weaker energy stocks that curbed the progress of the British market. UK’s benchmark FTSE 100 closed, up by 0.2 percent, the pan-European FTSEurofirst 300 closed, up by 0.7 percent, Germany’s Dax closed, up by 0.9 percent, France’s CAC closed, up at 0.7 percent, Italy’s FTSE MIB closed, up by 1.1 percent. Meanwhile, Spain’s IBEX 35 was up by 1 percent at close.
US stocks edged higher on Monday, fueled by corporate acquisition and oil prices recovery, cheering investor’s sentiment. Dow Jones closed, up by 1.37 percent, S&P 500 closed, up by 1.27 percent, Nasdaq closed , up by 1.13 percent.
Treasuries Recap
U.S. Treasuries prices fell on Monday, weighed down by equities rallies on Wall Street and elsewhere as investors bet on possible new policy stimulus to battle China’s stock slump and readied for sales of new U.S. government debt.
The MSCI world equity index, which tracks shares in 45 nations, rose nearly 5 points, or 1.1 percent.
Treasury price declines were biggest among long maturities, with the 30-year bond last off 1 and 20/32 in price after yielding as much as 2.908 percent. The 10-year note fell 18/32 to yield 2.2395 percent, while the 3-year was off 1/32 in price and yielding 1.0707 percent.
The 5-year to 30-year yield curve steepened on Monday, increasing 3.30 to nearly 128 basis points, after flattening on Friday to its smallest differential since April. U.S. jobs data on Friday boosted conviction the Fed will next month start raising rates.
Commodities Recap
Gold rose 1 percent to above $1,100 an ounce on Monday, its biggest increase in more than seven weeks, as the U.S. dollar turned lower and comments from Federal Reserve officials raised uncertainty about a September rate hike.
Spot gold was up 1 percent at $1,103 an ounce at 3:27 p.m. EDT (1927 GMT), while U.S. gold futures for December delivery settled up 0.9 percent at $1,104.10 an ounce.
Oil jumped almost 4 percent on Monday after a rally in U.S. gasoline and diesel due to a refinery outage helped crude futures advance from multi-month lows.
Brent, the global benchmark for oil, rose 3.7 percent, posting its largest gain since end-May. U.S. crude rose 2.5 percent, its most in two months. U.S. crude settled $1.09 up at $44.96 a barrel.
The material has been provided by InstaForex Company – www.instaforex.com