Friday 7th July: European Open Briefing

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Friday 7th July: European Open Briefing 1

Global Markets:

  • Asian stock markets: Nikkei down 0.50 %, Shanghai Composite fell 0.20 %, Hang Seng declined 0.45 %, ASX 200 lost 0.90 %
  • Commodities: Gold at $1220 (-0.25 %), Silver at $15.89 (-0.60 %), WTI Oil at $45.00 (-1.20 %), Brent Oil at $47.55 (-1.15 %)
  • Rates: US 10-year yield at 2.38, UK 10-year yield at 1.32, German 10-year yield at 0.57

News & Data

  • Japanese Labour Cash Earnings (Y/Y) May: 0.7% (exp 0.4%; prev 0.5%)
  • Australian AiG Perf of Construction Index Jun: 56.0 (prev 56.7)
  • PBoC Fixes USDCNY Reference Rate At 6.7914 (prev fix 6.7953 prev close 6.8035)
  • Asia hit by Wall St. stumble, debt yields spike after ECB minutes – RTRS
  • Oil prices slump over 1 percent on rise in U.S. output – RTRS

Markets Update:

Markets were mostly quiet as traders are waiting for the NFP. The largest move overnight was seen in the JPY pairs. USD/JPY rallied to 113.85 despite Asian stock markets being under pressure. However, breakout above 114 seems unlikely prior to the US employment data at 1330 BST. To the downside, support is noted at 113.30 and 112.75.

EUR/USD consolidated between 1.1410 and 1.1425 in Asia. Strong resistance is seen around 1.1450. Should US data disappoint, EUR/USD will likely clear the resistance without much struggle. Above 1.1450, there is little resistance until 1.16.

Large moves were seen in precious metals overnight. Silver had a flash crash and collapsed more than 3 %. It quickly recovered, but remains under $16. The technical outlook is negative, and the downtrend is likely to continue in the near-term. Support is seen at $15.60, but the next major level is $15.00.

In Gold, there was no reaction to the Silver flash crash, but the metal had a weak performance as well. The break below $1220 support suggests it could test $1200 soon. Further, Gold is struggling despite the recent USD weakness, which indicates that selling interest on rallies remains high.

Upcoming Events:

  • 07:00 BST – German Industrial Production
  • 08:30 BST – UK Halifax House Price Index
  • 09:30 BST – UK Manufacturing Production
  • 09:30 BST – UK Industrial Production
  • 09:30 BST – UK Trade Balance
  • 13:30 BST – US NFP
  • 13:30 BST – US Unemployment Rate
  • 13:30 BST – Canadian Unemployment Rate
  • 13:30 BST – Canadian Employment Change
  • 15:00 BST – Canadian Ivey PMI

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