- PBOC fixes USD/CNY at 6.3966, last close at 6.3947, opens trade at 6.3923 levels.
- US June net overall capital outflow $110.3 bln, May reverse $109.6 bln inflow, net foreign holdings of US Treasuries +$69.8 bln, China holdings $1.271 trln, Japan $1.197 trln, June foreign US Treasury buys highest since February ’14.
- China end-June gold reserves +1.16% m/m to 1677.3 tonnes, +60% from end-April 1054 tonnes, PBOC takes advantage of price fall.
- China July new home prices +0.3% m/m, -3.7% y/y, June -4.9% y/y.
- RBA August 4 meeting minutes – Accommodative policy still appropriate, lower AUD assisting economic adjustments, USD could rise more when Fed hikes, inflation to remain consistent with policy, economy more positive.
- Australia July new vehicle sales -1.3% m/m, +3.7% y/y, June +3.9% m/m.
- (0430 ET/0830 GMT) UK July CPI, -0.3% m/m, unchanged y/y eyed; last unchanged.
- (0430 ET/0830 GMT) UK July RPI, -0.1% m/m, +1.0% y/y eyed; last +0.2%, +1.0%.
- (0430 ET/0830 GMT) UK July RPIX, -0.1% m/m, +1.0% y/y eyed; last +0.2%, +1.1%.
- (0430 ET/0830 GMT) UK July PPI output, -0.1% m/m, -1.5% y/y eyed; last unchanged, -1.5%.
- (0430 ET/0830 GMT) UK July core, unchanged m/m, +0.2% y/y eyed; last unchanged, +0.1%.
- (0430 ET/0830 GMT) UK July PPI input, -2.0% m/m, -12.8% y/y eyed; last -1.3%, -12.6%.
- (0830 ET/1230 GMT) US July housing starts, 1.19 mln AR eyed; last 1.17 mln, +9.8% m/m.
- (0830 ET/1230 GMT) US Jul building permits, 1.23 mln AR eyed; last 1.34 mln, +7.0% m/m.
Key Events Ahead
- N/A ESM E2.5 bln 6-mo bill, Spain 6/12-mo treasury bill auctions.
- (0400 ET/0800 GMT) Bank of Spain Gov Linde parliamentary testimony on ’16 budget.
- (0530 ET/0930 GMT) ECB 7-day refinance at fixed 0.05%, E70 bln allotment eyed, last bln.
FX Recap
EUR/USD is supported below 1.1100 levels and currently trading at 1.1054 levels. It has made intraday high at 1.1082 and low at 1.1052 levels. Monday saw majors seesaw in quite limited ranges, with the American dollar ending the day with some gains across the board. In Europe, the EU Trade Balance for June resulted in a surplus of €26.4B, compared with €16.0 a year before, which helped the EUR/USD pair advance up to 1.1124 intraday. US data resulted disappointing, with the NY manufacturing index tumbling to -14.9, the lowest in six years, against expectations of a 5.0 advance. The calendar will remain light in both economies this Tuesday, with investors focused on US CPI figures and the FOMC latest minutes, to be released next Wednesday. Initial support is seen around at 1.0789 and resistance at 1.1195 levels.USD/JPY is supported above 124.00 levels and posted a high of 124.51 levels. It has made intraday low at 124.37 and currently trading at 124.48 levels. Data out of Japan on Monday showed the economy contracted 0.4% in the June quarter, slightly better than the 0.5% contraction forecast by markets, but down sharply on first-quarter growth of 1%. The Bank of Japan is currently forecasting the economy to expand 1.7% in fiscal 2015 and 1.5% in fiscal 2016. Today is data thin calendar for Japan. Market will eye on US macro economic data for the further directions. Initial resistance is seen at 125.68 and support is seen at 120.63 levels.
GBP/USD is supported below $1.5600 levels. It made an intraday high at 1.5597 and low at 1.5574 levels. Pair is currently trading at 1.5582 levels. The BoE consequently struck a more dovish tone again in its August Inflation Report, revising down the near-term inflation outlook on the back of strong downward external pressures stemming from weak oil prices and sterling appreciation. It will be a key week for the pound, as inflation figures are due today ahead of Retail Sales (Thursday) and Public Sector Net Borrowing (Friday). Initial support is seen at 1.5413 and resistance is seen around 1.5734 levels.
NZDUSD is supported around 0.6600 levels and trading at 0.6594 levels and made intraday low at 0.6570 and high at 0.6605 levels. The New Zealand dollar enjoyed more than 40 pips worth of gains on Tuesday after Russia decided to allow 29 New Zealand companies to sell dairy products to Russia, partly lifting a ban which had been operating for two years. Russia put a ban on New Zealand dairy products following a botulism scare by New Zealand dairy giant Fonterra in August 2013. The removal of the ban will be hugely welcomed by New Zealand’s dairy sector which has put up with a 70% tumble in global dairy prices over the last two years. Initial support is seen at 0.6465 and resistance at 0.6789 levels.AUD/USD is supported above 0.7300 levels and trading at 0.7366 levels. It has made intraday high at 0.7386 levels and low at 0.7356 levels. Minutes from the bank’s August 4 meeting when the bank left the cash rate at 2.0%, released on Tuesday, signalled that the central bank is much more comfortable with how the economy is evolving, with the weaker level of the Australian dollar and record-low interest rates stimulating demand. Initial support is seen at 0.7225 and resistance at 0.7647 levels.
Equity Recap
Japan’s benchmark Nikkei 225 index crept 0.08% higher to 20,637.15 points within the first hour of trade, while Tokyo’s broader Topix gauge also gained 0.08%, and was trading at 1,674.28 points.Hong Kong’s benchmark Hang Seng index advanced 0.29% to 23,882.72 points just a few minutes after trade began, and mainland China’s benchmark Shanghai Composite grew 0.17% to 4,000.57 points at the same time.Korea’s benchmark Kospi index rose 0.17% to 1,971.56 points on Tuesday morning in Seoul.
The benchmark Australian S&P/ASX 200 index climbed 0.11% to 5,373.60 points in Sydney.
New Zealand’s benchmark S&P/NZX 50 index rose 0.15% to 5,736.07 points.The Indian market has opened higher aided by global support. The Sensex is up 100.92 points or 0.4 percent at 27979.19 and the Nifty is up 28.55 points or 0.4 percent at 8505.85.Australia’s S&P/ASX 200 index closes down 0.94 pct at 5,317.40 points.Tokyo’s NIKKEI average closes down 0.32 pct at 20,554.47.
Treasury Recap
Thailand 32 bln baht, 91-day central bank bond average accepted yield 1.40483 pct.Thailand 32 bln baht, 182-day central bank bond average accepted yield 1.42791 pct.Japan 12-month treasury discount bill auction lowest price 100.0250, average price 100.0260, bids accepted at lowest price 55.9296 pct.
New Zealand government bond yields were marginally lower.
Australian government bond futures rose, with the three-year bond contract up 2 ticks at 98.050. The 10-year contract added 3 ticks to 97.2200.
Commodity Recap
US crude futures slipped on Tuesday as global oversupply, a firm dollar and Iran returning to the market all contribute to the commodity’s negative performance. Futures for WTI dipped 0.17% to trade at $41.76 per barrel, while Brent futures gave up 0.27% to $48.61 per barrel.Gold was trapped in narrow ranges on Tuesday, struggling to move higher as investors looked to a near-term increase in U.S. interest rates in the face of mostly firm economic signals. Gold ended a seven-week losing streak last week as China’s shock devaluation of its yuan helped spur some safe-haven bids. With the Yuan since stabilizing, market focus has shifted back to a looming hike in U.S. interest rates. Spot gold was flat at $1,117.80 an ounce by 0255 GMT, after rising modestly on Monday.
The material has been provided by InstaForex Company – www.instaforex.com