Market Review - 26/07/2014 00:05GMT
Euro weakens to fresh 8-month low after upbeat U.S. durable good orders
The single currency hit a fresh 8-month low of 1.3421 against U.S. dollar after release of U.S. durable goods orders which rose more than market consensus in June together with the earlier release of weaker-than-expected German Ifo business sentiment index. U.S. durable goods came in better than expected at 0.8% versus forecast of 0.6% n previous revised figure of -0.1%.
Despite staging a brief bounce to 1.3476 in European morning, renewed selling interest emerged and price tumbled after the release of German Ifo Jul business sentiment index which unexpectedly dropped to 108.0 versus forecast of 109.4.
Euro remained under pressure in Europe and U.S. session due to ongoing tensions between Russia and Ukraine as well as weakness in European stock markets. UK's FTSE, Germany's DAX, France's CAC closed down by 0.5%, 1.6% n 1.9% respectively. European officials continued talks over plans to squeeze Russia with further sanctions following the downing of a Malaysia Airlines plane that killed almost 300 people last week. Price eventually weakened to a fresh 8-month low of 1.3421 in New York afternoon before recovering.
Market saw a knee-jerk reaction to bang-in-line U.K. GDP. Although a minor short-covering rebound occured after the release and lifted price from an intra-day low of 1.6968 to 1.6992, selling interest quickly emerged below 1.6990/00 and pound later ratcheted lower to a 4-week low of 1.6963 before recovering briefly to 1.6996 in New York morning.
Although U.S. dollar rose briefly against the Japanese yen to 101.94 in European morning, the selloff in global stock markets capped dollar's upside and the pair retreated to 101.72 in late New York on yen-buying due to renewed risk aversion as Dow Jones index fell by around 133 points to 16951.
Next week will see the release of U.S. Markit Services PMI Flash, pending Homes Index and pending sales change on Monday; Japan’s unemployment rate and retail sales, Australian HIA home sales, Germany import prices, U.S.
Redbook and consumer confidence on Tuesday.
Japan’s industrial output, industrial production forecast, Swiss KOF indicator, Eurozone business climate, economic and services sentiment, Germany’s CPI and HICP, U.S. ADP employment, Canada’s producer prices, U.S. GDP and FOMC rate decision on Wednesday.
U.K. GfK consumer confidence, Australia’s building approvals and private home approval, Japan’s housing start and construction orders, Germany’s unemployment rate, Canada’s GDP and U.S. Challenger layoffs and Chicago PMI on Thursday.
China’s NBS manufacturing PMI, Australia’s PPI, Japan’s manufacturing PMI, China HSBC manufacturing PMI final, U.S. unemployment rate, Markit/CIPS manufacturing PMI, unemployment rate, PCE price index, private payrolls and non-farm payrolls, University of Michigan consumer confidence and ISM manufacturing PMI on Friday.
Euro weakens to fresh 8-month low after upbeat U.S. durable good orders
The single currency hit a fresh 8-month low of 1.3421 against U.S. dollar after release of U.S. durable goods orders which rose more than market consensus in June together with the earlier release of weaker-than-expected German Ifo business sentiment index. U.S. durable goods came in better than expected at 0.8% versus forecast of 0.6% n previous revised figure of -0.1%.
Despite staging a brief bounce to 1.3476 in European morning, renewed selling interest emerged and price tumbled after the release of German Ifo Jul business sentiment index which unexpectedly dropped to 108.0 versus forecast of 109.4.
Euro remained under pressure in Europe and U.S. session due to ongoing tensions between Russia and Ukraine as well as weakness in European stock markets. UK's FTSE, Germany's DAX, France's CAC closed down by 0.5%, 1.6% n 1.9% respectively. European officials continued talks over plans to squeeze Russia with further sanctions following the downing of a Malaysia Airlines plane that killed almost 300 people last week. Price eventually weakened to a fresh 8-month low of 1.3421 in New York afternoon before recovering.
Market saw a knee-jerk reaction to bang-in-line U.K. GDP. Although a minor short-covering rebound occured after the release and lifted price from an intra-day low of 1.6968 to 1.6992, selling interest quickly emerged below 1.6990/00 and pound later ratcheted lower to a 4-week low of 1.6963 before recovering briefly to 1.6996 in New York morning.
Although U.S. dollar rose briefly against the Japanese yen to 101.94 in European morning, the selloff in global stock markets capped dollar's upside and the pair retreated to 101.72 in late New York on yen-buying due to renewed risk aversion as Dow Jones index fell by around 133 points to 16951.
Next week will see the release of U.S. Markit Services PMI Flash, pending Homes Index and pending sales change on Monday; Japan’s unemployment rate and retail sales, Australian HIA home sales, Germany import prices, U.S.
Redbook and consumer confidence on Tuesday.
Japan’s industrial output, industrial production forecast, Swiss KOF indicator, Eurozone business climate, economic and services sentiment, Germany’s CPI and HICP, U.S. ADP employment, Canada’s producer prices, U.S. GDP and FOMC rate decision on Wednesday.
U.K. GfK consumer confidence, Australia’s building approvals and private home approval, Japan’s housing start and construction orders, Germany’s unemployment rate, Canada’s GDP and U.S. Challenger layoffs and Chicago PMI on Thursday.
China’s NBS manufacturing PMI, Australia’s PPI, Japan’s manufacturing PMI, China HSBC manufacturing PMI final, U.S. unemployment rate, Markit/CIPS manufacturing PMI, unemployment rate, PCE price index, private payrolls and non-farm payrolls, University of Michigan consumer confidence and ISM manufacturing PMI on Friday.
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