Posted at 08 August 2023 / Categories Market Roundups
Market Roundup,
•Moody's downgrades small to mid-sized U.S. banks
•Chinese yuan slides to multi-week lows
•US Imports 313.00B, 316.10B previous
•US Exports 247.50B, 247.10B previous
•Canada Jun Trade Balance -3.73B,-2.90B forecast,-3.44B previous
•Canada Jun Imports 64.43B,64.97B previous
•US Redbook (YoY) 0.3% forecast, 0.1% previous
•US Jun Wholesale Inventories (MoM) -0.5%,-0.3% forecast,-0.3% previous
•US Jun Wholesale Trade Sales (MoM) -0.7%,0.3% forecast,-0.2% previous
•US IBD/TIPP Economic Optimism 40.3, 43.0 forecast,41.3 previous
Looking Ahead Economic Data(GMT)
•23:50 Japan Jul M3 Money Supply 2,111.0% previous
•23:50 Japan Jun Large Scale Retail Sales YoY (YoY) 4.0% previous
•23:50 Japan M2 Money Stock (YoY) 2.5% forecast, 2.6% previous
•01:30 China Jul CPI (YoY) -0.4% forecast,0.0% previous
•01:30 China Jul CPI (MoM) 0.1% forecast,-0.2% previous
•01:30 China Jul PPI (YoY) -4.1% forecast, -5.4% previous
•03:00 New Zealand Inflation Expectations (QoQ) 2.8% previous
•06:00 Japan Machine Tool Orders (YoY) -21.7% forecast,-22.2% previous
Currency Summaries
EUR/USD: The euro dipped against dollar on Tuesday as dollar firmed across the board garnering safe-haven bids, after a disappointing set of Chinese trade figures. China's imports and exports fell much faster than expected in July, data on Tuesday showed, with imports down 12.4% from a year earlier while exports contracted by 14.5%, in another sign of the country's faltering economic recovery and subdued global demand. The dollar index , a measure of the U.S. currency against six peers, rose 0.45% ,The euro dropped 0.4% to $1.0957. Immediate resistance can be seen at 1.0973(5DMA), an upside break can trigger rise towards 1.1010(23.6%fib).On the downside, immediate support is seen at 1.0941(38.2%fib), a break below could take the pair towards 1.0855( (50%fib).
GBP/USD: The pound fell on Tuesday, but held above last week's one-month lows, after a survey showed British retailers logged their slowest sales growth in 11 months in July, thanks to rainy weather and high inflation. The British Retail Consortium (BRC) said retail sales values rose by 1.5% compared with July last year, less than half the 12-month average growth rate of 3.9% and down from this year's peak of 5.2% in February.The data is not adjusted for inflation so July's small rise in spending represented a fall in terms of sales volumes.Sterling was last down 0.2% at $1.2757. Against the euro, the pound fell 0.1% to 86.10 pence. Immediate resistance can be seen at 1.2765(9DMA), an upside break can trigger rise towards 1.2846(23.6%fib).On the downside, immediate support is seen at 1.2659(38.2%fib), a break below could take the pair towards 1.2628(Aug 3rd low).
USD/CAD: The Canadian dollar fell against U.S. counterpart on Tuesday after the disappointing Chinese trade figures led investors to shift to safer assets. China's imports and exports fell much faster than expected in July as weaker demand threatens recovery prospects in the world's second-largest economy, heightening pressure for authorities to release fresh stimulus to steady growth. Imports dropped 12.4% in July year-on-year, customs data showed on Tuesday, missing a forecast fall of 5% in a poll and off a 6.8% decline in June. Meanwhile, exports contracted 14.5% . The loonie was trading 0.4% lower at C$1.3417 to the greenback , after trading in a range of 1.3366 to 1.3501. Immediate resistance can be seen at 1.3448 (Higher BB), an upside break can trigger rise towards 1.3478(23.6%fib).On the downside, immediate support is seen at 1.3404 (38.2%fib), a break below could take the pair towards 1.3387 (5 DMA).
USD/JPY: The U.S. dollar steadied against Japanese yen on Tuesday as investors assessed the latest weak economic data out of China. Data showed China's imports contracted by 12.4% in July, far more than forecasts for a 5% drop. Exports fell by 14.5%, compared with a fall of 12.5% tipped by economists. Global investors were also waiting for Thursday's U.S. inflation figures, which will be a key input into the Federal Reserve's next interest rate decision in September. The dollar picked up against its major trading partners as investors shifted towards safer assets, with the dollar index last 0.45% higher at 102.60. Strong resistance can be seen at 143.82(23.6%fib) an upside break can trigger rise towards 144.45(Higher BB).On the downside, immediate support is seen 142.61(5DMA), a break below could take the pair towards 141.07(38.2%fib)
Equities Recap
European shares dropped on Tuesday as Italian banks came under pressure after the cabinet approved a 40% windfall tax on lenders, while sticky inflation print from Germany and weak China trade data further soured investor sentiment.
UK's benchmark FTSE 100 closed down by 0.36 percent, Germany's Dax ended down by 1.10 percent, France’s CAC finished the day down by 0.69 percent.
All three major Wall Street benchmarks finished lower on Tuesday in a broad sell-off after the downgrading of several lenders by credit rating agency Moody's reignited fears about the health of U.S. banks and the economy. Dow Jones closed down by 0.45% percent, S&P 500 closed down by 0.42% percent, Nasdaq settled down by 0.79% percent.
Treasuries Recap
Longer-dated U.S. Treasury yields fell on Tuesday after Moody's Investors Service cut its credit ratings on several small- to mid-sized U.S. banks, and China's imports and exports fell much faster than expected in July, raising expectations for additional Chinese government stimulus.
Benchmark 10-year yields fell 6 basis points to 4.020%. They reached 4.206% on Friday, the highest since Nov. 8.
Two-year yields were little changed on the day at 4.754%. The interest rate sensitive notes are holding below yields of 5.120% reached on July 6, which were the highest since June 2007.
Commodities Recap
Gold prices fell to a near one-month low on Tuesday as investors took refuge in the dollar after weak Chinese trade data, while caution prevailed ahead of U.S. inflation figures later this week.
Spot gold slipped 0.7% to $1,922.73 per ounce by 09:32 a.m. EDT (1332 GMT), its lowest since July 10. U.S. gold futures GCcv1 were down 0.7% at $1,956.90.
Oil prices edged higher on Tuesday as a U.S. government agency projected a rosier outlook on the economy, but bearish data on China's crude imports and exports weighed.
Brent crude futures gained 83 cents to settle at $86.17 a barrel. U.S. West Texas Intermediate crude rose 98 cents to $82.92.