Market Brief G10 Advancers and Decliners vs USD SEK 0.20 CHF 0.17 GBP 0.13 NZD 0.11 DKK 0.10 EUR 0.09 NOK 0.02 AUD -0.10 JPY -0.10 CAD -0.21 Global Indexes Current Level % Change Nikkei 225 Index 20548.11 -0.18 Hang Seng Index 24412.2 -0.9 Shanghai Index 3596.18 -1.83 FTSE futures 6621 -0.49 DAX futures 11286.5 -0.17 SMI Futures 9406 -0.04 DJIA (ARCA:DIA) futures 17689.86 -0.03 Global Indexes Current Level% Change Gold 1097.6 0.16 Silver 14.76 -0.13 VIX 12.12 -0.08 Crude WTI 46.71 -0.87 USD Index 97.29 -0.05
Asia stocks declined across the board as Chinese economic data showed more weakness. China Caixin manufacturing PMI final (different from the official read, which fell to a five-month low at 50.0) contracted to a 2-year low at 47.8 in July compared with flash estimates of 48.2 and down from 49.4 in June. The Shanghai composite fell -2.33% and Shenzhen declined 2.30%. The Hang Seng fell -1.01% and the Nikkei -0.17%. In the FX markets, volatility was subdued after Fridays wild swings. EUR/USD was range bound between 1.0966 to 1.0991, while it traded slightly higher from 123.90 to 124.10. AUD/USD edged lower despite solid economic data. AUD/USD fell from 0.7321 to 0.7290. US rates were slightly higher, as the 10 year yields rose 2.5bp to 2.205% on the open, but quickly slipped to 2.194%. The PBoC kept the USD/CNY fix steady at 6.116. With a busy GBP week ahead, the sterling was range bound. Commodities remain under pressure with oil falling in early trading. According to a Bloomberg report, ahead of China's top leadership’s annual gathering, policy makers are preparing new fiscal spending initiatives to safeguard against economic weakening; wouldn’t put their 2015 target out of reach (as in 2014). In the European session, Greece is anticipated to open its stock markets for the first time in over one month. Heavy selling is expected and headwinds in stock across Europe.
According to Bloomberg, BoJ Governor Haruhiko Kuroda stated that there was no current need for additional monetary easing. The inflation trend was improving, yet the BoJ stood ready to adjust policy if needed. He went on to say that in his view, the private sector remained more pessimistic than the central bank on inflation outlook. Finally, it was the official BoJ view that its inflation target of 2% would be achieved around the first half of 2056. In economic data, Nikkei manufacturing PMI expanded to 51.2 in July, revised lower from 51.4 of preliminary estimates.
In Australia, July AIG performance of manufacturing index expanded to 50.4 recovering from a contraction of 44.2 in June. Meanwhile, HIA new home sales rose 0.5% m/m in June against a prior fall of 2.3% in May. In Australia, house prices continue to surge despite efforts of regulators to control growing real-estate prices (dampening RBA easing expectations). Elsewhere, South Korea’s BoP current account surplus quickened to a record high of $12186.5mn against revised lower figures of $8618.1mn in May.
In the European session, traders will expect EU, UK and Swedish manufacturing PMI. Switzerland will release sight deposit data, which will be of interest due to the fact that EUR/CHF has traded well above intervention levels. This read will help us understand if the SNB is looking to push the EUR/CHF higher, or only intervene in defense of the CHF. In the US, personal income and spending, PCE and ISM manufacturing are anticipated to be released.
Today's Calendar Estimates Previous Country / GMT SW Jul Swedbank/Silf PMI Manufacturing 53.5 52.8 SEK / 06:30 SZ 31.July Total Sight Deposits - 4.62E+11 CHF / 07:00 SZ 31.juil. Domestic Sight Deposits - 3.98E+11 CHF / 07:00 SZ Jul PMI Manufacturing 50.5 50 CHF / 07:30 EC Jul F Markit Eurozone Manufacturing PMI 52.2 52.2 EUR / 08:00 UK Jul Markit UK PMI Manufacturing SA 51.5 51.4 GBP / 08:30 DE Jul Danish PMI Survey - 54 DKK / 09:00 US Revisions: U.S. Personal Income & Spending - - USD / 12:30 US Jun Personal Income 0.30% 0.50% USD / 12:30 US Jun Personal Spending 0.20% 0.90% USD / 12:30 US Jun Real Personal Spending 0% 0.60% USD / 12:30 US Jun PCE Deflator MoM 0.20% 0.30% USD / 12:30 US Jun PCE Deflator YoY 0.20% 0.20% USD / 12:30 US Jun PCE Core MoM 0.10% 0.10% USD / 12:30 US Jun PCE Core YoY 1.20% 1.20% USD / 12:30 US Jul F Markit US Manufacturing PMI 53.8 53.8 USD / 13:45 US Jun Construction Spending MoM 0.60% 0.80% USD / 14:00 US Jul ISM Manufacturing 53.5 53.5 USD / 14:00 US Jul ISM Prices Paid 49.3 49.5 USD / 14:00
Currency Tech EUR/USD
R 2: 1.1436
R 1: 1.1278
CURRENT: 1.0980
S 1: 1.0819
S 2: 1.0660
GBP/USD
R 2: 1.5930
R 1: 1.5803
CURRENT: 1.5511
S 1: 1.5330
S 2: 1.5171
USD/JPY
R 2: 135.15
R 1: 125.86
CURRENT: 123.89
S 1: 120.41
S 2: 118.89
USD/CHF
R 2: 1.0129
R 1: 0.9719
CURRENT: 0.9599
S 1: 0.9151
S 2: 0.9072