Global Markets:
- Asian stock markets: Nikkei down 0.65 %, Shanghai Composite gained 0.80 %, Hang Seng rose 0.75 %, ASX 200 lost 0.75 %
- Commodities: Gold at $1220 (+0.35%), Silver at $15.90 (+0.90%), WTI Oil at $45.78 (+1.65%), Brent Oil at $48.25 (+1.40%)
- Rates: US 10 year yield at 2.36, UK 10 Year yield at 1.28, German 10 year yield at 0.55
News & Data:
- Australia Westpac Consumer Confidence SA (M/M) Jul: 0.40% (Prev -1.80%)
- Australia Westpac Consumer Confidence Index Jul: 96.6 (Prev 96.20)
- Japan PPI (Y/Y) Jun: 2.10% (Est 2.0%, Prev 2.10%)
- Japan PPI (M/M) Jun: 0.00% (Est 0.00%, Prev 0.00%)
- South Korea Unemployment Rate SA Jun: 3.80% (Est 3.70%, Prev 3.60%)
- Australia Credit Card Purchases May: A$28.30 Bln (Prev A$22.90 Bln)
- Australia Credit Card Balances May: A$52.30 Bln (Prev A$52.00 Bln)
- PBoC Fixes USDCNY Reference Rate At 6.7868 (Prev 6.7983)
Markets Update:
The US Dollar retraced some of its recent gains after dovish comments from a Fed member, who said that the central bank needs to assess its rate hike path given the recent soft inflation data.
USDJPY fell from 114.60 to 113.30. Major support lies at 113, and it is important for USDJPY bulls that it holds. A break below would signal that the pair will test 112 soon.
The Pound recovered to 1.2860 overnight. The focus today will be on UK employment data. Better than expected numbers should push GBPUSD back above 1.29. However, given the political uncertainty, it is unlikely that the Pound will have a significant rally anytime soon.
CAD pairs will have high volatiliy today. The Bank of Canada will decide on interest rates at 1500 BST, and the market is expecting a rate hike. While that alone should support the Canadian Dollar only slightly, much will depend on the statement and the outlook of the central bank. A hawkish outlook would boost the CAD, and send the USDCAD in direction of 1.26. On the other side, if the BoC does not hike, we should see a large short squeeze in the USDCAD. A rally towards 1.31 would then seem likely.
Upcoming Events:
- 09:30 BST – UK Unemployment Rate
- 09:30 BST – UK Average Earnings
- 09:30 BST – UK Claimant Count Change
- 10:00 BST – Euro Zone Industrial Production
- 15:00 BST – Fed Chair Yellen testifies
- 15:00 BST – Bank of Canada Rate Decision
- 15:30 BST – US Crude Oil Inventories
