Chinese stocks incur losses, Dollar continues to strengthen and a new war between Trump and the European Union
S&P futures marginally higher while the Asian stocks retreat first time in three days as the Japanese markets are closed for a holiday. FX majors are little changed as the Aussie dips briefly after China’s industrial output misses estimates.
Treasury futures are muted inside narrow range while the Australian bonds unchanged. The People Bank of China steps up liquidity injections to the tune of 300 billion yuan the most since February.
Chinese stocks were able to pare early losses following some mixed data as the Shanghai Composite were 0.5% lower. H shares lost 0.7%.
Crude oil futures slip as Trump is said to consider releasing oil from SPR stockpiles as Dalian iron ore was 0.7% stronger.
The Key Headlines of the Asian Session:
- Trump calls the European Union a “foe” of the U.S. as he cites trade tensions between the two.
- The EU and China are going to uphold multilateralism and free trade according to the Chinese Prime Minister Li.
- China bars foreign companies and other securities from stock link
- China Q2 GDP 6.7% y/y vs 6.7% estimate; June industrial output 6.0% y/y vs 6.5% estimate; Retail Sales 9.0% y/y vs 8.8% estimate; Fixed Assets Investment 6.0% y/y vs 6.0% estimate.
- New Zealand June Services index 52.8 vs 57.1 previous.
The European market takes over the Asian Session as investors look ahead for the Eurozone trade balance which might have an effect on the market especially because of the Trade War brewing between the EU and the U.S.
However, the most important point that investors will be looking at is the meeting between the President of the United States Donald Trump and the Russian President Vladimir Putin as severe repercussions might be brewing according to the outcome of the meeting.
The dollar is mostly steady in Asian session as investors await retail sales data ahead of Fed Chairman Powell’s two-day testimony later this week. Euro is little changed even as President Donald Trump named the European Union as a “foe” of the U.S. in an interview. Japanese markets are closed Monday for a public holiday.
USDJPY – The pair has bullishly breached the resistance at the May high. Resistance is seen at the 113.39 followed by 113.75. Support, on the other hand, is seen at 111.40 followed by 110.28.
EURUSD – The pair is currently being capped at the 50-DMA. Resistance is seen at 1.1712 followed by 1.1851. Support, on the other hand, is seen at 1.1527 followed by 1.510.
EURJPY – The pair may test the 200-DMA in the near term. Resistance is seen at the 131.94 followed by the 133.49. Support, on the other hand, is seen at 129.91 followed by 128.50.
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