Global Markets: 

  • Asia Stock Markets: Shanghai Composite down 0.20 %, Hang Seng fell 0.10 % and ASX gained 0.20 %
  • Commodities: Gold up 0.30 % at $1313, Silver up 0.45 % at $20.98, Crude Oil unchanged at $101.90
  • Rates: US 10 year yield at 2.482 

FX Update: 

  • AUD – AUD/USD is slightly higher on the day amid general USD strength, but AUD/NZD selling from leveraged names have capped the topside at 0.94. Offers noted at 0.9420 with plenty of trailing stops above there and larger selling interest begins around 0.9450. The pair is likely to remain in a 0.9330-0.9450 range as traders are waiting for the local CPI release on Wednesday.
  • CAD – USD/CAD is down 10 pips from 1.0740 to 1.0730. Leveraged funds have bids in front of 1.07 and that level needs to hold to keep the short-term bullish sentiment alive.
  • EUR – EUR/USD has bounced since taking out the 1.35 barrier, but there is plenty of selling interest from 1.3570 up to 1.36, which should make a larger short squeeze unlikely without a real catalyst.

Week Ahead in FX: 

Traders and investors remain worried about geopolitical risks amid the investigation of the MH17 flight crash in Ukraine and the shelling of Gaza by Israel. More than 70 people were killed in the Gaza today alone, taking the death toll to 434 since July 8th.

This week will bring a good amount of important data releases. While there isn’t much on the econ calendar for today, on Tuesday the US will release CPI data, expected to come in at 0.3 % month-on-month and 2.1 % year-on-year. This will be followed by US Existing Home Sales data at 14:00 GMT.

Wednesday will be an important day for the Aussie as we will get the local CPI data, expected at 0.6 % quarter-on-quarter and 3.1 % YoY. In the European session, the Bank of England will publish it’s meeting minutes which may provide us with some insights on how close the bank is to raising rates and how the debate has evolved since the June meeting. Canadian Retail Sales figures will be released in the early US session the same day.

Thursday begins with the RBNZ rate decision and the bank is expected to hike rates by 25 bps to 3.50 %. NZ Trade Balance data will be published a bit less than two hours later. This will be followed by a series of Manufacturing and Services PMI figures, starting with China at 01:45 GMT and then the European countries between 07:00 and 08:30 GMT. In the US session, we’ll get US Retail Sales numbers and New Home Sales data.

Finally, on Friday, Germany will release business and consumer confidence data and we will get the latest UK GDP figures. Good luck everyone! 

Upcoming Events: 

  • 06:00 GMT – German PPI (0.1 % MoM, -0.7 % YoY)