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There was limited liquidity across the markets on Monday as investors observed the 4th of July Independence holiday. The dollar suffered losses against foreign currencies as global markets experienced a risk-on mood. Investors are looking forward to this week’s US Jobs data and June Fed meeting minutes on Wednesday as a gauge for Fed’s tightening cycle.
USDCAD dropped by -0.36% as the dollar suffered weakness broadly underpinned by weak ISM Manufacturing PMI for June. The data dropped from 56.1 in May to 53.0, lower than 54.9 surveyed. The pair edged lower towards 1.2820, a 15-day low and a break below that level could trigger further selling towards the 1.2750 mid-figure. Bulls are capped by the 1.2900 level, a 6-day psychological barrier. Investors should pay attention to the BoC Business Outlook survey due for release in the New York Session.
AUDJPY pared Friday’s losses by +1.20% on more than expected AUD data in the EU session. Australia’s Building Approvals data for May came in at +9.9% against the -1.8% forecast along with Home Loans data at 2.1% vs -2.0% surveyed. The RBA is meeting on Tuesday and a 50bps rate hike is anticipated, giving a positive outlook for the AUD. The pair pocketed more than 100 pips from a low at 91.60 and targets may be seen at 93.50 and 94.72 marks in the near term.
EURCHF is up +0.30% despite disappointing EUR data. The Spanish unemployment change increased by 57.1K to -42.4K. The German trade balance for May reduced to -1.0B against the 2.7B forecasted. Eurozone’s PPI data came at 36.3% YoY vs the expectation of 36.7%. Switzerland’s inflation rose to 3.4%in the month of June, but this failed to give the CHF an upper hand over the EUR. The pair rose after sweeping below the 1.0000 mark leaving support there. A breach of 1.00524 immediate support-turned-resistance may renew bullish interests to 1.00800 and 1.0100. Market participants to focus on ECB members and German Buba members’ speeches during the day.
European stocks mixed in the EU trading session. The German 40 underperformed on missed German trade balance data at -1.0B vs 2.7B expected. The index traded lower by -0.60% after a spike above 12 942 high. UK 100 index climbed +0.11% above the 7200 mark and further up bulls may reclaim 7275 and 7300 levels. France 40 gained modestly by +0.12% with a low at 5935 and bullish targets at 6021 and 6191.
US stock futures dip as the bond market rallies amid the US 4th of July Independence Holiday. The DJIA futures dipped by -0.34% with resistance at 31 151, a 3-day high. More bearish pressure may set targets at 30 700 and 30400 in the short term. US 500 futures plunged by -0.36% with upside traction being capped by 3825 and targets at 3775 to the downside. US 100 futures are down -0.46% trading between 11600 and 11482.
Crude oil is in the negative to start the week as recession fears overtake supply concerns. The Libyan political crisis along with Norway’s oil workers’ strike has tightened the black liquid’s supply. Brent crude oil pared -0.05% above the 110 mark and capped by 112.35 to the upside. US crude oil is trading sideways with US Independence Day in play. The black liquid is trading between 107.23 and 109.00 per barrel.
