The US$ is mixed on Wednesday, with the major interest of the day being in Gold (+2.5%) and Oil (-5%). In the currency markets, lower global bond yields ensured that the dollar was unable to make any serious gains, with the main impact mostly seen in US$Jpy, which headed quite sharply lower. The EU currencies were under pressure of their own, with the German Retail Sales and the EU PPI both missing expectations, and reversing an early European squeeze to the topside in the Euro and the Chf, while Cable remains very heavy on the back of the ongoing Brexit woes. The best performing currency of the day was the Aud$ which, despite yesterday’s RBA rate cut, remains steady after being talked up by the RBA Governor Lowe in a speech outlining the positive elements of the Australian economy.
Elsewhere, US stocks ended mildly positive, with the S+P at another new all-time high on Tuesday although the outlook remains cautious as optimism over the US/China trade truce began to fade somewhat after the US threatened tariffs on additional European goods, capping any further gains.
WTI settled sharply lower, as fears that a weaker global economic backdrop will cap oil demand, and offsetting a new agreement by OPEC and its allies to extend their oil-production pact by a further nine months.
Gold shot up by 2.5% as traders moved back into safe haven assets amid increased concerns about slowing global growth and expectations for looser monetary policy.
Looking ahead, Wednesday gets underway with the AIG Australian Performance of Services Index, Building Permits (exp 0.0%mm), and Trade Balance (exp +5.25 bio) and will be closely followed by the Caixin China Services PMI (exp 53.0). The EU Services PMIs will be the European focus, which will then be followed by the US Trade Balance (exp -$49bio), ADP Jobs data (exp +150K), Jobless Claims, Services PMI, ISM Non-Mfg PMI (exp 56.0) and Factory Orders (exp +0.2%mm).
US Independence Day holiday Thursday. Have a good day
Wed: AIG Australian Performance of Services Index, Building Permits (exp 0.0%mm), Trade Balance (exp +5.25 bio%), Caixin China Services PMI, EU/UK Services PMIs, US Trade Balance, ADP Jobs data, Jobless Claims, Services PMI, ISM Non-Mfg PMI, Factory Orders,
Market moves, in brief:
FX: DXY 96.77 (-0.04%)
Bonds: US10Y; 1.976% (-2.70%), German 10Y; -0.367% (-2.83%), UK 10Y; 0.729% (-10.56%), Australian 10Y; 1.343% (-1.58%), NZ 10Y; 1.565% (-1.26 %), China 10Y; 3.248% (-0.70%)
Stock Indices: DJI; +0.25%, S+P; +0.29%, NASDAQ; +0.22%, EUStoxx50; +0.30%, FTSE100; +0.82%, Shanghai Composite; -0.03%,
Metals: Gold $1419 oz (+2.48%), Silver $15.31 oz (+1.14%), Copper $2.664 lb (-0.89%), Iron Ore $123.20 per tonne (NYMEX) (+2.3%),
Oil: WTI $ 56.25 pb (-4.92%)
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