News

America’s Roundup: Dollar drifts higher in thin summer trading, S&P trades near flat, Gold inches down, Oil prices down on dwindling storm impact, Chinese economic data-July 16th,2019

Market Roundup

•   US July NY Empire State Manufacturing Index 4.30,forecast 1.60,-8.60 previous

Looking Ahead – Economic Data (GMT)

• 22:45 New Zealand CPI (YoY) (Q2)

• 22:45 New Zealand CPI (QoQ) (Q2)

• 03:00 Reserve Bank of New Zealand Offshore Holdings

Looking Ahead – Events, Other Releases (GMT)

• 01:30 Australia RBA Meeting Minutes 

Currency Summaries

EUR/USD: The euro edged lower against the dollar on Monday, as  expectations for a dovish European Central Bank meeting next week weighed on single currency. Foreign exchange markets were quiet on Monday and volatility low ahead of major central bank policy meetings next week. Money markets have priced in an ECB rate cut of 10 basis points in September and another one in March. The meeting on July 25 may reinforce those expectations. Investors expect the Federal Reserve to cut its key rate by 25 basis points at the end of July, followed by another cut in September. Forecasts for dovish moves by both central banks have kept euro/dollar stuck in a narrow range for weeks. The euro was down 0.12% at $1.1256, still within the recent range of $1.14 to $1.11.Immediate resistance can be seen at 1.1247 (21 DMA), an upside break can trigger rise towards 1.1300 (Psychological level).On the downside, immediate support is seen at 1.1243 (50 DMA), a break below could take the pair towards 1.1193 (9 July low).

GBP/USD: Sterling declined against the dollar on Monday, as traders were nervous about a loss of momentum in the UK economy, the prospect of an interest rate cut and a new prime minister. On Tuesday, employment and wage growth data for the month of May will show how the British labour market is holding up. Many economists expect the UK economy will have contracted in the second quarter. Investors are also waiting for the outcome of the Conservative party leadership contest to replace Prime Minister Theresa May. Eurosceptic Boris Johnson is the favourite to win against Jeremy Hunt in a vote of Conservative party members. The winner will be crowned leader – and prime minister by the end of July. A stronger dollar also weighed on the British currency. Immediate resistance can be seen at 1.2599 (21 DMA), an upside break can trigger rise towards 1.2682 (50 DMA).On the downside, immediate support is seen at 1.2513 (5 DMA), a break below could take the pair towards 1.2442 (10 July Low).

USD/CAD: The Canadian dollar was little changed against its U.S. counterpart on Monday; holding near Friday’s nine-month high, as domestic data showed that housing sales dipped for the first time in four months. Resales of Canadian homes fell 0.2% in June from the previous month, the Canadian Real Estate Association said on Monday in the first decline reported since home sales plunged in February. The industry group said actual sales, not seasonally adjusted, rose 0.3% from a year earlier. Last week, the Bank of Canada said the housing market is stabilizing, as it left its benchmark interest rate steady at 1.75% and made clear it had no intention of easing monetary policy. The central bank’s stance has contrasted with dovish guidance last week from the U.S. Federal Reserve. Canada’s inflation report for June is due on Wednesday, which could offer further clues on the outlook for Canadian interest rates. At   (1925 GMT), the Canadian dollar was trading down 0.16 percent at 1.3046 to the greenback. Immediate resistance can be seen at 1.3069 (9 DMA), an upside break can trigger rise towards 1.3141 (21 DMA).On the downside, immediate support is seen at 1.3020 (July 12th low), a break below could take the pair towards 1.2956 (Lower Bollinger Band).

USD/JPY: The dollar was little changed against the Japanese yen on Monday, as greenback’s upside potential was hampered by expectations the Federal Reserve will cut interest rates at next week’s policy meeting. Investors expect the Fed to reduce its key rate by 25 basis points and make another cut in September. Foreign exchange markets were quiet on Monday and volatility low ahead of major central bank policy decisions next week. The European Central Bank also holds a meeting next week, with investors expecting a dovish statement.The dollar was 0.02 percent higher versus the Japanese yen at 107.19. Strong resistance can be seen at 108.25 (9 DMA), an upside break can trigger rise towards 108.94 (Psychological level).On the downside, immediate support is seen at 107.57 (July 3rd low), a break below could take the pair towards 107.00 (Psychological level).

European Recap

European shares inched higher on Monday, tracking gains in Asian markets on encouraging factory output and retail sales data from China, which provided some respite from worries about slowing global growth.

UK's benchmark FTSE 100 closed up by 0.34 percent, Germany's Dax ended up by 0.52 percent, France’s CAC finished the day up by 0.10 percent.

U.S. stock  extended last week’s gains to trade slightly higher on Monday in the run up to the start of second-quarter earnings reports, beginning with Citigroup..

Dow Jones closed up by 0.10 percent, S&P 500 ended down 0.11 percent, Nasdaq finished the day up by 0.17 percent.

Treasuries Recap

Longer-dated U.S. Treasury yields edged lower on Monday as investors focused on Tuesday’s retail sales figures as the next indicator of the strength of the U.S. economy.

Benchmark 10-year notes gained 3/32 in price to yield 2.10%, after testing the 2.15% level in overnight trading for the third consecutive trading session, the highest level since June 11.

Commodities Roundup

Gold edged lower on Monday as global stock markets gained with investors focussing on some upbeat economic readings from mixed Chinese economic data, while a firm dollar further weighed on bullion.

Spot gold fell about 0.5% to $1,409.09 per ounce as of 10:50 a.m. EDT (1450 GMT). U.S. gold futures fell 0.1% to $1,410.60.

Oil prices sank about 1% on Monday on signs that the impact of a tropical storm on U.S. Gulf Coast production and refining would be short-lived, while Chinese economic data dimmed the crude demand outlook.

Brent crude futures   settled at $66.48 a barrel, losing 24 cents, while U.S. crude  settled at $59.58 a barrel, shedding 63 cents, or 1.1%.


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