Global Markets:
- Asian stock markets: Nikkei down 0.20 %, Shanghai Composite gained 0.60 %, Hang Seng and ASX 200 both gained 1.10 %
- Commodities: Gold at $1223 (+0.30 %), Silver at $15.95 (0.30 %), WTI Oil at $45.50 (+0.05 %), Brent Oil at $47.80 (+0.05 %)
- Rates: US 10 year yield at 2.31, UK 10 year yield at 1.26, German 10 year yield at 0.58
News & Data:
- China Trade Balace 294.3 Bln Yuan Vs Est 275.1 Bln Yuan
- China Exports Rise 17.30% vs Est 14.60%
- China Imports Rise 23.10% vs Est 22.30%
- Australia Consumer Inflation Expectation (Jul): 4.40% (Prev 3.60%)
- New Zealand ANZ Consumer Confidence Index Jul: 125.40 (Prev 127.80)
- UK RICS House Price Balance Jun: 7% (Est 15%, Prev 17%)
- PBoC Fixes USDCNY Reference Rate At 6.7802 (Prev 6.7868)
Markets Update:
The Canadian Dollar has been the strongest performing currency in the past 24 hours. The Bank of Canada delivered a hawkish hike – a rate hike accompanied by an optimistic outlook for the economy. The BoC signalled that another rate hike might follow soon. While the market expected a move up in rates, the central bank was more hawkish than expected. USDCAD collapsed to 1.2670. While it has recovered a bit since then, the outlook remains negative and further losses are likely. The next important support level now lies at 1.25.
The US Dollar came under pressure following dovish comments from Fed Chair Yellen. She expressed concern about the soft inflation data in recent months. USDJPY fell back below 113 and a test of 112 support seems likely in the near-term.
Meanwhile, the Euro reversed some of its gains, but remains well bid overall. Key support is seen at 1.14 and 1.1380. GBPUSD rose to 1.29, but weak UK employment data prevented a larger rally.
Upcoming Events:
- 07:00 BST – German CPI
- 13:30 BST – US PPI
- 13:30 BST – US Initial Jobless Claims
- 15:00 BST – Fed Chair Yellen testifies
