Economic Data
- (UK) July CBI Industrial Reported Sales: 21 v 15e- (IE) Ireland Jun PPI M/M: 0.3% v 0.1% prior; Y/Y: -1.7% v -3.1% prior
- (US) MBA Mortgage Applications w/e July 18th: +2.4% v -3.6% prior
- (CA) Canada May Retail Sales M/M: 0.7% v 0.6%e; Retail Sales Ex Auto M/M: 0.1% v 0.3%e
- (BR) Brazil Jun Tax Collections (BRL): 91.4B v 90.6Be
- (EU) Euro Zone July Advance Consumer Confidence: -8.4 v -7.5e
- (US) DOE Crude: -3.97M v -2.5Me; Gasoline: +3.38M v +1.0Me; Distillate: +1.64M v +2Me
- US equities are making modest gains this morning, driven higher by a broad spectrum of earnings reports. Note that the S&P500 traded right up to its all-time high level in the first hour of trade. As of writing, the DJIA is flat, the S&P500 isup 0.23% and the Nasdaq is up 0.48%.
- The situation in eastern Ukraine remains very tense this morning. Two more Ukrainian fighter jets have been shot down by the rebels, possibly from locations inside of Russia. Meanwhile there have been reports of Russian military exercises on Ukraine's northern border and of an emergency Duma meeting. Ukraine press sources suggest that Putin will instruct the Duma to demand an immediate ceasefire in Ukraine. The EU may not have rolled out any serious sanctions, but the yield on the 10-year German bund is falling further, to 1.146%, not too far from the all-time low of 1.126%.
- The minutes from the Bank of England July policy meeting showed there were no dissenting votes on rates. FX traders had been bracing for a more hawkish tone among some members. GBP/USD steadily sold off in the aftermath from 1.7090 to test under 1.7030 by the mid-NY morning.
- Apple and Microsoft are heading in opposite directions this morning after reporting yesterday evening. Microsoft's fourth quarter revenue saw very strong gains y/y while net income declined slightly. Server and cloud sales continue to do quite well, even as the phone business flounders, but either way new CEO Nadella has only begun his reforms. Apple's revenue fell a bit short, but sold sold 35.2 million iPhones, up 13% y/y, with China iPhone sales up 48% y/y. AAPL didn't gain much post-market, but this morning has moved higher, up 2.3%.
- Defense/aerospace names Boeing, Northrop and General Dynamics topped earnings expectations, while Boeing and Northrop both hiked FY14 EPS guidance. However there were problems, with Northop and GD both seeing slight y/y declines in revenue, while defense segments of Boeing's business also saw revenue contraction thanks to lower federal spending. Boeing's backlog was flat. Shares of BA are down 2.5%, GD has given up gains and is up 1%, while NOC is up slightly.
- In other earnings, materials/chemicals names DuPont and Dow Chemical had mixed numbers. DuPont's earnings sagged and sales were flat, while Dow saw good y/y gains. Shares of both firms are gaining this morning. Pepsi raised its FY14 earnings guidance and delivered a solid performance in its second quarter. PEP was up 4% before giving up some ground. Biogen is up 10% after widely beating expectations and strongly hiking FY14 guidance. Delta is up 4% on solid third quarter guidance and good second quarter results.
Looking Ahead
- 15:00 (AR) Argentina Jun Trade Balance: No est v $1.3B prior- 17:00 (NZ) New Zealand Central Bank (RBNZ) Interest Rate Decision: Expected to raise Official Cash Rate by 25bps to 3.50%
- 17:00 (CO) Colombia May Retail Sales Y/Y: 6.8%e v 7.2% prior
- 17:00 (CO) Colombia May Industrial Production Y/Y: +4.0%e v -2.2% prior
- 17:00 (KR) South Korea Jun Department Store Sales: No est v 0.8% prior
- 19:00 (KR) South Korea Q2 Preliminary GDP Q/Q: 0.7%e v 0.9% prior; Y/Y: 3.7%e v 3.9% prior
- 19:50 (JP) Japan Jun Trade Balance: -¥642.9Be v -¥909.0B prior; Adj Trade Balance: -¥1.119Te v -¥862.2B prior
- 21:35 (JP) Japan July Preliminary Manufacturing PMI: No est v 51.5 prior
- 21:45 (CH) China July Preliminary HSBC Manufacturing PMI: No est v 50.7 prior
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EUR/USD stays near 1.0800 after upbeat US data
EUR/USD stays under modest bearish pressure and trades near 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.