News

America’s Roundup: Dollar gains as bond markets flash recession warning, Wall Street tumbles, Gold rises, Oil tumbles 5% on weak global economic data, U.S. crude build-August 15th,2019

Market Roundup

• US Jul Export Price Index (MoM) , 0.2%.-0.1 forecast, -0.6 previous

• US Jul Export Price Index (YoY), -0.9%.-1.4%forecast, -1.6% previous

• US Jul Import Price Index (MoM), 0.2%, 0.0%forecast,-1.1 previous

• US Jul Import Price Index (YoY) -1.8%,-2.9%forecast,-2.0% previous

Looking Ahead – Economic Data (GMT)

• 01:00 Austalia MI Inflation Expectations, 3.2% previous

• 01:00  Australia Jul Employment Change 14.0K, 0.5K previous

• 01:00  Australia Jul Full Employment Change  21K previous

• 01:00  Australia  Jul Participation Rate  66.0%, 66.0%previous

• 01:30  China Jul House Prices (YoY)  10.3% previous

• 04:30 Japan  Jun Capacity Utilization (MoM)  0.2 % forecast,- 1.7% previous

• 04:30 Japan  Jun Industrial Production (MoM)  -3.6% forecast,-3.6% previous

Looking Ahead – Events, Other Releases (GMT)

• 23:00 Australia RBA Assist Gov Debelle Speaks  

Currency Summaries

EUR/USD: The euro declined against the U.S. dollar on Wednsday, as global recession fears grew, with the U.S. Treasury yield curve inverting for the first time since 2007 and Germany reporting that its economy had shrunk in the second quarter. The yield curve is closely watched for recession signals. The last time it inverted was during the U.S. sub-prime-mortgage crunch that set off the global financial crisis. Germany’s gross domestic product fell 0.1% quarter-on- quarter after growing 0.4% in the first quarter, the latest sign that world trade disputes are damaging Europe’s biggest economy. The euro was down 0.34 percent at $1.1133.An index that tracks the dollar versus a basket of six major currencies was up 0.21 at 98.04.Immediate resistance can be seen at 1.1178(38.2% retracement level), an upside break can trigger rise towards 1.1236 (Dec 10th high).On the downside, immediate support is seen at 1.1131 (Daily low), a break below could take the pair towards 1.1100 (Psychological level).

GBP/USD:The pound edged higher against dollar on Wednesday after inflation picked up in July, but the currency held within sight of a two-and-a-half year low as brewing concerns about a no-deal Brexit weighed on investor sentiment.The consumer price index rose 2.1% year-on-year in July from 2% in June, above a Reuters poll forecast of a 1.9% increase. The Bank of England’s inflation target is 2%. The pound was up 0.1% at $1.2074, above a low of $1.2015 hit on Monday, its weakest since January 2017. Versus the euro, the British currency was ahead slightly at 92.615 pence. Immediate resistance can be seen at 1.2105 (9DMA), an upside break can trigger rise towards 1.2247(21 DMA).On the downside, immediate support is seen at 1.2016 (Daily low), a break below could take the pair towards 1.2100 (Psychological level).

USD/CAD: The Canadian dollar weakened to a one-week low against its U.S. counterpart on Wednesday as oil prices dropped and investors worried about the global growth outlook. Oil prices fell on weak economic data from China and Europe and a rise in U.S. crude inventories. U.S. crude  prices were down 3.56% at $55.03 a barrel.China reported weaker-than-expected economic data for July, including a surprise drop in industrial output growth to a more than 17-year low, while a slump in exports sent Germany’s economy into reverse in the second quarter. The Canadian dollar   was trading 0.6% lower at 1.3304 to the greenback, or 75.17 U.S. cents.Immediate resistance can be seen at 1.3328 (Daily high), an upside break can trigger rise towards 1.3400 (Psychological level).On the downside, immediate support is seen at 1.3244 (9 DMA), a break below could take the pair towards 1.3179 (21 DMA).

USD/JPY: The dollar weakened against the Japanese yen on Wednesday, after the U.S. Treasury bond yield curve inverted for the first time since 2007 and investors, gripped by fear of a looming global recession, fled to the safety of perceived safe-haven assets. On Tuesday, the dollar jumped versus the yen after U.S. President Donald Trump backed off his Sept. 1 deadline for imposing 10% tariffs on remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods.Those gains were reversed overnight, however, as skepticism about the progress began to weigh.The dollar was 0.70 percent  lower versus the Japanese yen at 105.98. Strong resistance can be seen at 105.60 (11 DMA), an upside break can trigger rise towards 106.98 (50 DMA).On the downside, immediate support is seen at 105.09 (50 DMA), a break below could take the pair towards 105.00 (Psychological level). 

Equities Recap

European stocks tumbled to a six-month low on Wednesday, as an inversion in the U.S. yield curve following bleak data out of major economies including Germany and China pointed to a looming recession.

The UK's benchmark FTSE 100 closed down by 1.42 percent, Germany's Dax ended down by 2.19 percent, and France’s CAC finished the down  by 2.08 percent.

Wall Street main indexes slumped more than 2.5% on Wednesday, as a closely watched U.S. bond market indicator pointed to a renewed risk of recession following poor economic data from Germany and China.

Dow Jones closed down by 3.05 percent, S&P 500 ended down 2.96 percent, Nasdaq finished the day down by 3.02 percent.

Treasuries Recap

The U.S. Treasury bond yield curve inverted on Wednesday for the first time since 2007, in a sign of investor concern that the world’s biggest economy could be heading for recession.

The inversion  saw U.S. 2-year note yields rise above the benchmark 10-year yield, which fell to 1.574%, the lowest since September 2016.U.S. 30-year yields also plunged, dropping to a record low of 2.015%.

Commodities Recap

Gold rose over 1% on Wednesday as an inverted U.S. Treasury yield curve and weak euro zone data stoked fears of a global economic recession and drove investors toward safe-haven bullion.

Spot gold rose 1.1% to $1,517.88 per ounce, as of 2:03 p.m. EDT (1803 GMT), after dipping as much as 2% in the previous session.U.S. gold futures settled up 0.9% at $1,527.80.

Oil prices sank roughly 5% on Wednesday after disappointing economic data from China and Europe revived global demand fears and U.S. crude inventories rose unexpectedly for the second week in a row.

Brent crude dropped $2.90, or 4.7%, to $58.40 a barrel, by 1:08 p.m. EDT (1708 GMT), erasing the previous session’s sharp gains after the United States moved to delay tariffs on some Chinese products.
 


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