Global Markets:
- Asian stock markets: Nikkei up 0.20%, Shanghai Composite gained 0.65%, Hang Seng rose 0.55%, ASX 200 rallied 0.75%
- Commodities: Gold at $1269 (+0.20%), Silver at $16.83 (+0.30%), WTI Oil at $50.30 (+0.20%), Brent Oil at $52.80 (+0.15%)
- Rates: US 10 year yield at 2.30, UK 10 year at 1.23, German 10 year yield at 0.55
News & Data:
- China Caixin Manufacturing PMI Ju: 51.1 (Est 50.4, Prev 50.4)
- Japan Nikkei Manufacturing PMI Jul F: 52.1 (Prev 52.2)
- South Korea Nikkei Manufacturing PMI Jul: 49.1(Prev 50.1)
- Australia AIG Perf of MFG Index Jul: 56 (Prev 55)
- PBoC Fixes USDCNY Reference Rate At 6.7148 (Prev 6.7283)
Markets Update:
The US Dollar came under renewed pressure overnight as concerns about the political situation in Washington weighed on the currency. EURUSD broke above 1.18 and there is little resistance now until 1.20.
GBPUSD cleared resistance at 1.32, which suggests the rally could extend to 1.35 in the near-term. While the outlook for GBP is mixed, the broad USD weakness could keep the pair supported for a while.
USDJPY has bounced off 110 on the first test, but the support level looks very fragile. A break below is likely to trigger more momentum selling and eventually push the pair in the direction of 108 – the next major support level.
AUDUSD is well bid ahead of the RBA rate decision. The market is not expecting any changes, so the highlight will be the RBA statement. The tone in the recent minutes were slightly more hawkish, so the market has hopes that this will be confirmed in today’s release.
Upcoming Events:
- 08:45 BST – Italian Manufacturing PMI
- 08:50 BST – French Manufacturing PMI
- 08:55 BST – German Manufacturing PMI
- 08:55 BST – German Unemployment Rate
- 09:00 BST – Euro Zone Manufacturing PMI
- 09:30 BST – UK Manufacturing PMI
- 10:00 BST – Euro Zone GDP
- 13:30 BST – US Personal Spending
- 15:00 BST – US Manufacturing PMI
