Posted at 14 July 2021 / Categories Market Roundups
Market Roundup
• Canada May Manufacturing Sales (MoM) -0.6%,1.0% forecast, -2.1% previous
• US June Core PPI (MoM) 1.0%,0.5% forecast, 0.7% previous
•US Jun PPI (YoY) 7.3%,6.8% forecast, 6.6% previous
•US Jun PPI (MoM) 1.0%,0.6% forecast, 0.8% previous
•Canada BoC Interest Rate Decision 0.25%, 0.25% forecast, 0.25% previous
•US Gasoline Inventories 1.039M, -1.786M forecast, -6.076M previous
•US Crude Oil Inventories -7.897M, -4.359M forecast, -6.866M previous
Looking Ahead –Economic Data (GMT)
• 01:00 Australia MI Inflation Expectations 4.4% previous
• 01:30 Australia June Employment Change 30.0K forecast, 115.2K previous
• 01:30 Australia June Unemployment Rate 5.0% forecast, 5.1% previous
• 01:30 Australia June Full Employment 97.5K previous
• 01:30 Australia June Participation Rate 66.3% forecast, 66.2% previous
• 2;00 China June Industrial Production (YoY) 7.8% forecast, 8.8% previous
• 2;00 China June Fixed Asset Investment (YoY) 12.1% forecast, 15.4% previous
• 2;00 China June Chinese Industrial Production YTD (YoY) 17.8% previous
• 2;00 China GDP (YoY) (Q2) 8.1% forecast, 18.3% previous
• 2;00 China Unemployment Rate 5.2% previous
Looking Ahead - Events, Other Releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro strengthened against dollar on Wednesday after U.S. Federal Reserve Chair Jerome Powell reassured the market again that an inflation spike will be transitory. Powell reiterated in prepared congressional testimony that inflation will remain anchored around the Fed’s 2% target and the U.S. economy was “still a ways off” from levels the Fed wanted to see before tapering its stimulus support. The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.422% to 92.382. The euro was up 0.48% at $1.1831. Immediate resistance can be seen at 1.1871 (38.2%fib), an upside break can trigger rise towards 1.1896 (21 DMA).On the downside, immediate support is seen at 1.1796 (23.6%fib), a break below could take the pair towards 1.1764(Lower BB)
GBP/USD: Sterling climbed against the dollar on Wednesday as UK inflation rose more than expected to its highest in almost three years, putting the focus of the Bank of England's plan to keep its huge stimulus programme in place. Inflation jumped in June further above the BoE's 2% target to hit 2.5%, its highest since August 2018. Higher prices for food, fuel and used cars as the economy bounced back from its lockdown slump were among the drivers. By 20:05 GMT, the pound was up 0.01% at $1.3859 . Immediate resistance can be seen at 1.3867 (50% fib), an upside break can trigger rise towards 1.3930 (61.8%fib).On the downside, immediate support is seen at 1.3793 (38.2%fib), a break below could take the pair towards 1.3737 (Lower BB).
USD/CAD: The Canadian dollar was little changed against its U.S. counterpart on Wednesday as the Bank of Canada reduced the scope of its bond-buying program but held its key interest rates at a record low. The loonie cut its gains against the U.S. dollar following the Bank of Canada's announcement. The bank also warned that inflation would be higher than previously forecast over the near term. The bank cut its weekly net purchases of Canadian government bonds to a target of C$2 billion from C$3 billion. In late trading, the Canadian dollar was nearly unchanged at 1.2510 to the greenback .Immediate resistance can be seen at 1.2575 (23.6%fib), an upside break can trigger rise towards 1.2598(Higher BB).On the downside, immediate support is seen at 1.2504 (38.2%fib), a break below could take the pair towards 1.2453 (10DMA).
USD/JPY: The dollar edged lower against the Japanese yen Wednesday after Federal Reserve Chair Jerome Powell told Congress the U.S. economy was still a ways off from levels the central bank wanted to see before tapering its monetary support. His comments came as a report showed U.S. producer prices rose more than expected, posting their biggest annual increase in more than 10-1/2 years. A day earlier, data showed June U.S. inflation hit its highest in more than 13 year. Strong resistance can be seen at 110.18(38.2%fib), an upside break can trigger rise towards 110.37 (10DMA).On the downside, immediate support is seen at 109.69(23.6%fib), a break below could take the pair towards 109.48(Lower BB).
Equities Recap
European stocks slipped from peaks on Wednesday, as the global mood soured on increasing concerns about inflation, while travel stocks dropped on worries about the Delta variant’s spread in the continent.
The UK's benchmark FTSE 100 closed down by 0.47 percent, Germany's Dax ended down by 0.01 percent, and France’s CAC finished the day down by 0.01 percent.
The S&P 500 ended with a gain after briefly hitting an intra-day record in a choppy session on Wednesday, as investors balanced worries about inflation with reassuring comments from Fed Chair Jerome Powell.
Dow Jones closed up by 0.13 percent, S&P 500 closed up 0.18 percent, Nasdaq closed down by 0.22 percent.
Treasuries Recap
U.S. Treasury yields fell after Federal Reserve Chair Jerome Powell on Wednesday maintained his view that strong inflation will be temporary, even after data showed for the second day that price pressures rose more than expected in June.
Benchmark 10-year yields fell six basis points on Wednesday to 1.356%.The yield curve between two-year and 10-year notes flattened to 112 basis points.
Commodities Recap
Gold jumped on Wednesday after U.S. Federal Reserve Chair Jerome Powell reassured investors that the central bank would continue its accommodative monetary policy despite a spike in inflation readings.
Spot gold rose about 1% to $1,824.75 per ounce by 2:46 pm EDT. U.S. gold futures settled up 0.8% at $1,825.
Oil prices dropped more than 2% Wednesday after major global oil producers came to a compromise about supply and after U.S. data showed demand slacked off a bit in the most recent week.
Brent crude settled down $1.73 a barrel, or 2.26%, at $74.76 a barrel. West Texas Intermediate was off by $2.12, or 2.82%, at $73.13 a barrel.