The EU plans to intervene in markets directly to curb rising energy costs, threatening to push the Euro area's economy into a deep recession.
Morning brief for July 4
2019-11-11 • Updated
The Aussie was hurt badly after the Reserve Bank of Australia held its interest rates unchanged at their record low. Governor Lowe’s statement was not as upbeat as many expected. He put a special emphasis on the subdued wage growth. Australia’s economic health was described as rather strong with business conditions and investments picking up stronger employment growth. Nevertheless, the board decided in favor of “no change” willing to support the country’s economic recovery and prevent A$ from rising higher.
The US Dollar Index which measures the greenback’s strength against a trade-weighted basket of six major currencies was down 0.07% to 95.85. US markets are closed today for the Independence day holiday, so we don’t expect big swings here.
USD/JPY crept down to 113.10 in Tokyo morning, but managed not to drop below the key resistance at 113.00 and remained not far away from the seven-week high of 113.47 touched earlier (after the US factories powered up in June at their fastest pace in 3 years). The yen gained strength after South Korea announced that Pyongyang once again fired their ballistic missile. The missile landed in Japan's Exclusive Economic Zone (EEZ), the Japanese government said. North Korea is repeatedly ignoring warnings from the international community, Japan's Prime Minister Shinzo Abe said on Tuesday. Abe said he will ask the heads of China and Russia to play more constructive roles in efforts to stop North Korea from launching additional missiles.
Leaders of the world’s 20 strongest economies will gather in Hamburg for a two-day summit hosted by German Chancellor Angela Merkel. Donald Trump will attend the following event and meet Russia’s Vladimir Putin for the first time as being a President. Donald Trump commented the recent missile firing in Twitter: "North Korea has just launched another missile. Does this guy have anything better to do with his life?" referring to the North's leader Kim Jong Un.
Today’s focus will on the Japan’s core CPI figures which are due at 9:00 am. Any uptick in the inflation figures will help the yen to strengthen.
The euro was little changed on Tuesday’s morning in the absences of the economic releases and central bankers’ speeches. It fell to 1.1355 against the greenback having lost its last week steam. Pay special attention to the ECB's official Novotny's speech which is due at 19:30 (MT team). He will speak of the economic consideration of the ECB's monetary policy.
The British pound inched higher but failed to recoup its yesterday’s losses after worse-than-expected data from the UK’s manufacturing sector. Theresa May striving to keep her slim majority on the side and gain the approval of more Britons signaled the end of austerity in the upcoming future. In today’s spotlight – the British construction PMI which is coming out at 11:30 am (MT time).
USD/CAD was trading a bit lower despite declining oil prices. Brent and WTI futures retreated in the Asian session halting a run of eight straight days of gains as traders received a signal that a relentless rise in US crude production is running out of steam. USD/CAD is trading near 1.2995. There is a strong support at 1.2945 (last Friday’s low) which is if broken will allow Loonie to test lower levels. The immediate resistance can be found at 1.3040.
US oil exports reached a record last week at five million barrels a day, according to Energy Information Administration data…
The past two years have seen the biggest swings in oil prices in 14 years, which have baffled markets, investors, and traders due to geopolitical tensions and the shift towards clean energy.
This week, there are a few high-probability trade ideas I'd like to recommend to you. Trading these setups, be sure to implement a proper risk management approach.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates?