25 July: US stocks firm, US$ steady but Euro remains heavy ahead of today’s ECB Meeting.

By | July 25, 2019

 

The DXY is pretty much unchanged today although the Euro remains heavy, under pressure from some poor PMI data, which added to the case for ECB easing later on today. The main mover in the FX markets was actually EurGbp, which fell 0.5% after Boris Johnson became the UK PM.

US stocks were mixed although the S+P and the Nasdaq pushed higher for a third day to close at record high as investors looked past weak economic data and mixed corporate results. Poor quarterly results from Boeing and Caterpillar results held the DJI back.

In the commodities markets, the metals headed higher as hopes grow of a ECB/Fed rate cut at upcoming meetings, while WTI fell 2% in a volatile session, and came about despite the EIA reporting that US crude stockpiles fell by 10.84 million barrels last week, almost three times the level forecast.

In terms of data, the EU manufacturing PMI dropped to 46.4 in July, down from 47.6 and missed expectation of 47.6, the lowest level in 79 months. The services PMI dropped to 53.3, down from 53.6, matching expectations, while the composite PMI dropped to 51.5, down from 52.2, a 3-month low. The German manufacturing PMI dropped to 43.1 in July, down from 45.0 and missed expectation of 45.2, the lowest level in 84 months.

From the US, the June New Home Sales Chg rose by 7.0% against the forecast of 6.0% but the previous month was revised down by -7.8%

Thursday will begin with a speech from the RBA Governor, Phillip Lowe, speaking on “Inflation Targeting & Economic Welfare” which may create some waves for the Aud$,  althoough there is little else to come from Asia.  We then have a busy European session, in which we get the July German IFO Business Climate/Expectations and the ECB Interest Rate Decision, at which expectations have been for the Bank to keep policy on hold although the markets are now pricing in a 54% chance of a 10-basis-point cut after the poor PMIs. Assuming they do stay on hold though, Mario Draghi is likely to be his usual dovish self which is likely to keep the pressure on the Euro.

Later on, the US will be busy too, with the release of the Wholesale Inventories (exp +0.5%mm), Durable Goods Orders (exp +0.7%mm), Kansas Fed Mfg Activity and the weekly Jobless Claims (exp 215K). Have a good day.

Economic data highlights will include:

Thur: RBA Governor Lowe Speech, German IFO Business Climate/Expectations, ECB Interest Rate Decision/Statement/Press Conference, US Wholesale Inventories, Durable Goods Orders, Kansas Fed Mfg Activity, Jobless Claims

Market moves, in brief:

FX: DXY 97.72 (+0.02%)

Bonds: US10Y; 2.048% (-1.92%), German 10Y; -0.378% (-6.57%), UK 10Y; 0.677% (-1.38%), Australian 10Y; 1.308% (-0.87%), NZ 10Y; 1.565% (0.00 %), China 10Y; 3.156% (-0.61%)

Stock Indices: DJI; -0.29%, S+P; +0.47%, NASDAQ; +0.85%, EUStoxx50; +0.03%, FTSE100; -0.73%, Shanghai Composite; +0.80%,

Metals: Gold $1425 oz (+0.57%), Silver $16.585 oz (+1.14%), Copper $2.712 lb (+0.44%), Iron Ore $120.25 per tonne (NYMEX) (-2.25%),

Oil: WTI $55.92 pb (-2.24%)

CURRENCIES
EURUSD: 1.1137
Res  1.1160  1.1185  1.1210
Sup  1.1125  1.1100  1.1075
USDJPY: 108.19
Res  108.30  108.55  108.80
Sup  108.00  107.75  107.50
GBPUSD: 1.2481
Res  1.2500  1.2525  1.2550
Sup  1.2450  1.2425  1.2400
USDCHF: 0.9853
Res  0.9870  0.9900  0.9930
Sup  0.9830  0.9805  0.9780
AUDUSD: 0.6978
Res  0.6990  0.7005  0.7020
Sup  0.6970  0.6955  0.6940
NZDUSD: 0.6708
Res  0.6720  0.6745  0.6770
Sup  0.6690  0.6670  0.6645
INDICES / COMMODITIES
S&P.fs: 3021.03
Res  3025.00  3035.00  3045.00
Sup  3010.00  3000.00  2990.00
DJ30.fs: 27234.50
Res  27300.00  27395.00  27490.00
Sup  27175.00  27085.00  27000.00
SPI200.fs: 6718
Res  6725  6735  6745
Sup  6710  6700  6690
XAUUSD: 1425.25
Res  1430.00  1440.00  1450.00
Sup  1420.00  1410.00  1400.00
XAGUSD: 16.58
Res  16.65  16.80  17.00
Sup  16.40  16.20  16.00
WTI.fs: 55.90
Res  56.70  57.65  58.35
Sup  54.85  53.95  53.20