Global Markets:
- Asian stock markets: Nikkei down 1.25 %, Shanghai Composite gained 1.30 %, Hang Seng rose 3.30 %, ASX lost 0.25 %
- Commodities: Gold at $1157 (-0.60 %), Silver at $15.07 (-0.65 %), WTI Oil at $52.40 (+1.50 %), Brent Oil at $57.80 (+1.00 %)
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Rates: US 10 year yield at 2.22, UK 10 year yield at 1.90, German 10 year yield at 0.67
News & Data:
- Australia Employment Change 7.3k, Expected: -5.0k, Previous: 39.9k
- Australia Unemployment Rate 6.0 %, Expected: 6.1 %, Previous: 5.9 %
- Australia Participation Rate 64.8 %, Expected: 64.7 %, Previous: 64.7 %
- China CPI 0.0 % m/m, Expected: -0.1 %, Previous: -0.2 %
- China CPI 1.4 % y/y, Expected: 1.3 %, Previous: 1.2 %
- China PPI -4.8 % y/y, Expected: -4.5 %, Previous: -4.6 %
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Japan Machinery Orders 19.3 % y/y, Expected: 16.3 %, Previous: 3.0 %
FOMC Minutes:
- FOMC: Most Fed officials in June wanted more information before raising rates
- FOMC: One member ready to rise rates, but willing to wait another meeting or two
- FOMC: Many officials expect labor market slack to be largely eliminated around year-end
- FOMC: Many concerns Greece could result in Euro Zone financial disruptions, possible spillovers to US
- FOMC: Fed staff expects H2 GDP growth to step up from H1 pace
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FOMC: Staff sees risks to GDP, inflation foreacsts tilted a little to downside
Markets Update:
The FOMC minutes did not contain any surprises, but were interpreted as slightly dovish by most. The Fed remains in the “wait-and-see” mode and is also showing greater concern about the instability in the Euro Zone and China. Overnight, we had two major data releases. Australian employment data beat expectations, which led to a rally to 0.7470 in AUD/USD. Chinese inflation data arrived slightly higher than expected, but didn’t trigger much of a reaction in markets. Almost half of the Chinese stock market remains frozen and sentiment remains nervous amongst traders/investors. JPY is benefiting the most from the current risk aversion, with USD/JPY breaking sub-121 yesterday. A test of the important 120.00 support level seems imminent now.
Upcoming Events:
- 07:00 BST – German Trade Balance
- 12:00 BST – Bank of England Interest Rate Decision
- 13:15 BST – Canadian Housing Starts
- 13:30 BST – US Initial Jobless Claims
