Macro Events & News – 12 July 2019


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By: Andria Pichidi

FX News Today

  • Treasuries recovered during the Asian session after better than expected data and a weak auction put pressure on bonds yesterday.
  • Bonds across Asia were under pressure though and JGB yields moved up 2.6 bp to -0.121%, while Australia’s 10-year yield jumped 12.0 bp to 1.450%.The RBA already cut rates to record lows and comments from the central bank governor yesterday didn’t sound as though the bank was readying further easing at the moment.
  • Stock markets were cautious ahead of trade and lending data out of China today, which are expected to set the tone for GDP numbers out on Monday.
  • With Powell’s testimony out of the way the focus is shifting back to the impact of trade tensions, and after Singapore reported the weakest GDP growth number in a decade investors are holding back before taking fresh positions, especially after a tweet by US President Trump saying China was not living up to promises made on buying agricultural products from the US.
  • Indices swung between gains and losses overnight and Topix and Nikkei are currently down -0.19% and up 0.15% respectively.
  • European stock futures are moving higher in tandem with US futures.
  • The WTI future is trading at $60.67 per barrel, amid escalating tensions in the Middle East.

Charts of the Day

Technician’s Corner

  • EURUSD spiked to 1.1274 in the Asia session after knocking lower following the warmer US CPI outcome. Looking ahead, the Dollar is likely to remain in sell-the-rally mode ahead of the July FOMC meeting, where a 25 basis point rate cut is widely expected. EURUSD support is now at the 50-day Moving Average at 1.1240, with resistance at 1.1287-95, the July 5 and July 4 highs.
  • USDCAD drifted lower to 1.3023 area as the WTI future is trading at USD 60.58 per barrel, amid escalating tensions in the Middle East. Next Support stands at 1.2970-1.2990.

Main Macro Events Today

  • Producer Price Index (USD, GMT 12:30) – The Headline PPI is expected to hold at 0.1% in June, and at 0.2% in the core index. These readings would keep in a y/y gain of 1.4% for headline PPI. We see y/y headline readings in a 1.3%-1.9% range over coming months, while core prices should be in a 2.1%-2.5% range.

Support and Resistance levels

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