Sample Category Title

For the 24 hours to 23:00 GMT, the AUD rose 0.59% against the USD and closed at 0.7682.

LME Copper prices rose 1.4% or $83.5/MT to $5905.5/MT. Aluminium prices rose 0.6% or $11.5/MT to $1897.5/MT.

In the Asian session, at GMT0300, the pair is trading at 0.7701, with the AUD trading 0.25% higher against the USD from yesterday's close.

Early morning data showed that Australia's private sector credit rose 0.4% on a monthly basis in May, in line with market expectations and following a similar rise in the prior month.

Elsewhere in China, Australia's largest trading partner, the NBS manufacturing PMI unexpectedly advanced to a level of 51.7 in June, expanding at its quickest pace in three months and defying market expectations for a fall to a level of 51.0. The PMI had recorded a reading of 51.2 in the prior month. Further, the nation's NBS non-manufacturing PMI climbed to a level of 54.9 in June, hitting its highest level since March 2017 and following a reading of 54.5 in the previous month.

The pair is expected to find support at 0.7664, and a fall through could take it to the next support level of 0.7627. The pair is expected to find its first resistance at 0.7725, and a rise through could take it to the next resistance level of 0.7749.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the EUR rose 0.56% against the USD and closed at 1.1442, after Germany's preliminary consumer price index (CPI) advanced more-than-expected by 1.6% on an annual basis in June, suggesting that a healthy upswing in economic activity will help revive inflation in the Euro-zone's largest economy. The CPI had risen 1.5% in the previous month, while market participants had anticipated an increase of 1.4%. Additionally, the nation's GfK consumer confidence index strengthened to a nearly sixteen-year high level of 10.6 in July, while investors had envisaged the index to remain steady at 10.4.

Separately, the Euro-zone's final consumer confidence index improved to a level of -1.3 in June, confirming the preliminary estimate. In the prior month, the index had registered a level of -3.3. Further, the region's economic sentiment indicator jumped to a nine-year high level of 111.1 in June, following a level of 109.2 in the prior month.

The greenback lost ground against a basket of major currencies, as investors brushed off upbeat US gross domestic product (GDP) data.

The second estimate of annualised gross domestic product (GDP) in the US was surprisingly revised higher to 1.4% in 1Q 2017, compared to a preliminary print that had indicated an advance of 1.2%, aided by higher consumer spending and robust growth in exports. In the previous quarter, the GDP had risen 2.1%. On the other hand, the nation's initial jobless claims recorded an unexpected increase to a level of 244.0K in the week ended 24 June, defying market consensus for it to ease to a level of 240.0K and compared to a revised reading of 242.0K in the prior week.

In the Asian session, at GMT0300, the pair is trading at 1.1442, with the EUR trading flat against the USD from yesterday's close.

The pair is expected to find support at 1.1405, and a fall through could take it to the next support level of 1.1368. The pair is expected to find its first resistance at 1.1462, and a rise through could take it to the next resistance level of 1.1482.

Moving ahead, investors will look forward to the Euro-zone's flash inflation numbers for June along with Germany's unemployment rate for June and retail sales for May, all slated to release in a few hours. Additionally, the US personal income and spending for May as well as the final Michigan consumer confidence index for June, will garner a lot of market attention.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the GBP rose 0.56% against the USD and closed at 1.3010, following upbeat economic data in the UK.

Data showed that Britain's net consumer credit advanced more-than-expected by £1.7 billion in May, notching its highest level in six months, thus suggesting that households remain confident enough to increase borrowing to help smooth consumption. In the previous month, net consumer credit climbed by £1.5 billion, while markets anticipated it to increase by £1.4 billion. Moreover, the number of mortgage approvals for house purchases in the UK unexpectedly rose to a level of 65.2K in May, confounding market consensus for a fall to a level of 64.0K. In the prior month, mortgage approvals had recorded a revised level of 65.1K.

In the Asian session, at GMT0300, the pair is trading at 1.3019, with the GBP trading 0.07% higher against the USD from yesterday's close.

Overnight data revealed that the nation's GfK consumer confidence index dropped more-than-expected to a level of -10.0 in June, as Britons remained concerned about spiking inflation and weakening wage growth. Markets anticipated the index to fall to a level of -7.0, after recording a level of -5.0 in the previous month. On the other hand, the nation's business barometer advanced to a level of 30.0 in June, following a level of 27.0 in the previous month.

The pair is expected to find support at 1.2970, and a fall through could take it to the next support level of 1.2921. The pair is expected to find its first resistance at 1.3049, and a rise through could take it to the next resistance level of 1.3079.

Moving ahead, traders would focus on UK's final 1Q GDP data, set to release in a few hours.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.32% against the JPY and closed at 112.00.

In the Asian session, at GMT0300, the pair is trading at 111.83, with the USD trading 0.15% lower against the JPY from yesterday's close.

Overnight data indicated that Japan's unemployment rate recorded an unexpected rise to 3.1% in May, hitting its highest level since December 2016, while market participants expected it to remain steady at 2.8%. Moreover, the nation's national consumer price index (CPI) climbed 0.4% on an annual basis in May, undershooting market expectations for a rise of 0.5%. In the prior month, the CPI had registered a 0.4% rise. Additionally, the nation's preliminary industrial production eased more-than-anticipated by 3.3% on a monthly basis in May, compared to an advance of 4.0% in the prior month, while markets had anticipated for a decline of 3.0%.

The pair is expected to find support at 111.4, and a fall through could take it to the next support level of 110.96. The pair is expected to find its first resistance at 112.6, and a rise through could take it to the next resistance level of 113.36.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.43% against the CHF and closed at 0.9555.

In the Asian session, at GMT0300, the pair is trading at 0.9565, with the USD trading 0.1% higher against the CHF from yesterday's close.

The pair is expected to find support at 0.9546, and a fall through could take it to the next support level of 0.9527. The pair is expected to find its first resistance at 0.9591, and a rise through could take it to the next resistance level of 0.9617.

Ahead in the day, Switzerland's KOF leading indicator data for June, slated to release in a few hours, will pique investor attention.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD declined 0.35% against the CAD and closed at 1.2993.

In the Asian session, at GMT0300, the pair is trading at 1.2978, with the USD trading 0.12% lower against the CAD from yesterday's close.

The pair is expected to find support at 1.2952, and a fall through could take it to the next support level of 1.2926. The pair is expected to find its first resistance at 1.3024, and a rise through could take it to the next resistance level of 1.3070.

This afternoon, investors will eye Canada's crucial GDP data for April, to gauge strength in the nation's economy.

The currency pair is trading below its 20 Hr and 50 Hr moving average.

Market movers today

Several interesting inflation figures due out today. First , the euro area will release preliminary inflation for June. Given the German, Italian and Spanish figures (and our estimate that French HICP inflation will have declined by 0.1pp) euro area inflation should be down by 0.14pp from 1.40% y/y in May. Hence, we estimate it will round up to 1.3%. Note that package tours have a very low weight in French HICP, so the upside risk is limited.

Another interesting inflation print today will be the core PCE from the US. Core inflation has surprised on the downside recently and moved lower since February, reversing the upward trend seen in 2016. The print today will give more info on how much of this is driven by transitory factors and what is due to softer underlying price pressure.

Also in the US, the Chicago PMI has been very strong recently and not shown the same decline as in the ISM and some regional surveys. We doubt that Chicago PMI can continue to buck the trend of softer data and look for a decline today.

In the Scandi sphere, focus turns to Norwegian data for retail sales, unemployment and credit growth.

Selected market news

The fear that recent hawkish talk from the Fed, ECB, Bank of Canada (BoC) and the Bank of England (BoE) means that monetaryicy stimulus will be taken away faster than expected has sent bond yields higher and notably EUR and GBP higher in recent days, but overnight the ‘normalisation' fears finally grabbed equity markets too. Equities have for a while priced in a somewhat more upbeat out look for the global economy than other asset classes, but look a bit fragile in the current environment given recent price momentum. Losses in the European session yesterday have been echoed in the US and Asia; notably, the S&P500 saw the largest fall in more than a month, whereas it was the largest drop in European equities since September last year.

Albeit mainly talk and little action from central banks so far, we are looking at what looks increasingly like markets flying into a new taper tantrum, but one which could be more broad-based than in 2013 when it was mainly fears of Fed tightening. This time round, a series of central banks have joined the call for ‘normalisation' . While the Sintra policy conference was used by policy makers to deliver hawkish talking, we note that this comes readily after the BIS sent out its annual report discussing, among other things, how the world is ‘inching towards norm alisation'. Notably, Norges Bank has already moved somewhat in this direction and there is a possibility the Riksbank could go in the same direction next week.

On a separate note, the South Korean president is in Washington for a two-day summit with President Trump, which started yesterday. With little material news from the talks so far, this comes at a time when North Korea continues to flex its military muscles and as the US administration is accusing another neighbour of North Korea's, China, of not backing Trump's hard stance against the regime.

Asia Mid-Session Market Update: China official PMIs hit 3-month high; Japan core CPI reaches 2-year high

US Session Highlights

(US) Q1 FINAL GDP ANNUALIZED (3RD READING) Q/Q: 1.4% V 1.2%E; PERSONAL CONSUMPTION: 1.1% V 0.6%E

(US) Q1 FINAL GDP PRICE INDEX: 1.9% V 2.2%E; CORE PCE Q/Q: 2.0% V 2.1%E

(US) INITIAL JOBLESS CLAIMS: 244K V 240KE; CONTINUING CLAIMS: 1.95M V 1.94ME

(US) Nevada reports May casino gaming Rev $991.6M, +3.5% y/y; Las Vegas strip rev $546.8M, +3.0% y/y

Stocks turned yesterday's rally around on its heels, sending prices south on strong volumes. Nasdaq was the worst hit, down -1.4%, with volumes about 36% above its 3-month average. The VIX index jumped 18%, reaching 11.9, but off its session high. Financials managed to buck the downtrend, with the S&P sector posting a 0.7% rise. Concern over Fed tapering of the balance sheet continued to play on investors, as bond prices fell further today. 10-year Note yield went as high as 2.29% before closing lower at 2.27% for a 4bps increase on the day.

US markets on close: Dow -0.8%, S&P500 -0.9%, Nasdaq -1.4%

Best Sector in S&P500: Financials

Worst Sector in S&P500: Technology

Biggest gainers: AYI +10.5%; SWN +6.0%; STZ +5.0%

Biggest losers: INCY -4.1%; LRCX -3.7%; MKC -3.6%

At the close: VIX 11.4 (+1.4pts); Treasuries: 2-yr 1.37% (+2bps), 10-yr 2.27% (+5bps), 30-yr 2.81% (+4bps)

US movers afterhours

NKE Reports Q4 $0.60 v $0.49e, Rev $8.7B v $8.61Be; Guides FY18 (FX neutral): Rev mid to high single digit range; gross margin to expand beyond high end of long term goal; double digit EBITDA expansion - earnings call; +7.8% afterhours

HAIN Engaged Capital discloses 9.9% stake; have had talks with management and will engage in further discussions; +5.7% afterhours

AOBC Reports Q4 $0.57 v $0.38e, Rev $229.2M v $210Me; Guides Q1 adj EPS $0.07-0.12 v $0.32e, R$140-150M v $178Me ; -9.4% afterhours

CARA Announces top-line results from phase 2b trial of Oral CR845 in Chronic Pain Patients with Osteoarthritis of the Hip or Knee; -28.1% afterhours

Politics

(US) GOP operative reportedly tried to obtain stolen Clinton emails during 2016 campaign; said to have implied he was working with former Nat Security Advisor Mike Flynn - WSJ

Key economic data

(CN) CHINA JUNE MANUFACTURING PMI (GOVT OFFICIAL): 51.7 (3-month high) V 51.0E; NON-MANUFACTURING PMI: 54.9 (3-month high) V 54.5 PRIOR

(JP) JAPAN MAY NATIONAL CPI Y/Y: 0.4% V 0.5%E ; CPI EX FRESH FOOD (CORE) Y/Y: 0.4% (2-year high, 5th straight month of increase) V 0.4%E

(JP) JAPAN JUNE TOKYO CPI Y/Y: 0.0% V 0.3%E; CPI EX-FRESH FOOD Y/Y: 0.0% V 0.2%E

(JP) JAPAN MAY JOBLESS RATE: 3.1% V 2.8%E (5-month high); Job to applicant: 1.49 v 1.48e (43-year high)

(JP) JAPAN MAY PRELIMINARY INDUSTRIAL PRODUCTION M/M: -3.3% V -3.0%E (biggest decline in years); Y/Y: 6.8% (3-year high) v 6.9%E

(JP) JAPAN MAY OVERALL HOUSEHOLD SPENDING Y/Y: -0.1% V -0.7%E (15th consecutive month of decline)

(NZ) NEW ZEALAND MAY BUILDING PERMITS M/M: +7.0% V -7.4% PRIOR; first increase in 3 months

Speakers and Press

China

(CN) China Premier Li: Should attach importance to decline in foreign direct investment (FDI) this year - press

(CN) China State Planner (NDRC): Energy supply is still under pressure in some areas amid peak demand summer period - press

(CN) BoA/ML cuts China 2018 GDP target to 6.4% from 6.6% - press

Japan

(JP) Japan cabinet: Increase in jobless rate due to rise in people quitting to seek better jobs and expansion of participation - press

(JP) Japan Finance Min Aso: Reiterates economy recovering from deflation; No changes to monetary or fiscal policy

Australia/New Zealand

(AU) UBS: RBA will not "join hawkish central bank club"; Wants to see Q2 CPI data before deciding on economic conditions

(AU) Mark Barnaba named to RBA Board for a 5-year term from Aug 31st

(NZ) BNZ no longer expects RBNZ to raise rates in Feb 2018 and instead sees mid-2018 for a rate hike

Korea

(KR) South Korea, Japan, and US will hold trilateral talks on trade at next week's G20 - Korean press

(KR) South Korea President Moon and US President Trump promise to make joint efforts to denuclearize North Korea - Korean press

Asian Equity Indices/Futures (00:00ET)

Nikkei -1.1%, Hang Seng -0.8%, Shanghai Composite -0.2%, ASX200 -1.5%, Kospi -0.4%

Equity Futures: S&P500 -0.1%; Nasdaq -0.4%, Dax -0.2%, FTSE100 -0.2%

FX ranges/Commodities/Fixed Income (00:00ET)

EUR 1.1375-1.1420; JPY 112.15-112.40; AUD 0.7580-0.7615; NZD 0.7260-0.7285

Aug Gold +0.3% at 1,253/oz; Aug Crude Oil +0.4% at $44.95/brl; Sept Copper +0.7% at $2.69/lb

(IA) Iran July Crude Oil exports may decline 7% m/m to 1.86M bpd - financial press

(CN) PBOC SETS YUAN MID POINT AT 6.7744 V 6.7940 PRIOR; 3rd straight firmer fix; Strongest Yuan fix since Nov 9th

(CN) PBOC skips open market operations (6th straight skip)

(CN) China Finance Ministry sells 3-month bills at 3.33%

Asia equities notable movers

Australia

Spotless (SPO) -0.9%; Reiterates opposition to Downer takeover; Board consistent in view the offer does not represent adequate value

Japan

Lintec (7966) -1.8%; Nikkei Q1 earnings preview

Sojitz Corp (2768) +0.4%; Nikkei Q1 earnings preview

Hong Kong

China Fortune Financia (290) +8.5; Reports FY17

Luk Fook Holdings (590) +1.9%; Reports FY17

Ju Teng International Holdings (3336) -1.2%; Guides H1 Net -60% to -50% y/y

Integrated Waste Solutions (923) -4.1%; Reports FY17

Kwoon Chung Bus Holdings (306) -5.3%;

Key Points:

• Price action reaches the upper channel constraint.
• Key reversal zone has been reached.
• Bearish Divergence evident on the RSI Oscillator and MACD.

The EURGBP has been trending within a fairly reliable channel over the past few months as the pair continues to feel the impact of risk around the Brexit. As expected, price action has been trending steadily higher since it touched the lower channel in late April. However, price action could be reaching the extent of its rally given that the top of channel has been reached in the past few days.

A quick review of the daily chart demonstrates the dilemma that is currently facing the pair as price actions upward direction appears to have been largely capped by the top of the channel. Subsequently, the past few days have seen price turn sideways in direction and take a more consolidative shape. However, there are some negative factors building with the RSI Oscillator appearing to show some divergence as the indicator trends steadily lower whilst price action retains its current position. In addition, the MACD is also displaying some divergence with the key indicator taking a very definite downward tilt.

Subsequently, there are plenty of technical factors to suggest that we might be seeing the first stage in a bearish move for the pair. This isn’t surprising given that price action is presently sitting in a key area of resistance and especially considering the aforementioned divergent indicators. Additionally, today’s trading session has now seen price action break below the bullish trend line and we are all but ready to see a sharp decline in the coming days.

Ultimately, the most likely scenario for the EURGBP is price action stalling around the 0.8780 mark during the remainder of Friday’s session before commencing a steady decline back towards 0.8648, and 0.8476 in extension. This would relieve significant pressure upon the oscillators as well as allow price action to follow the divergence lower. However, keep a close watch on any potential volatility from the UK GDP figures which are due out in the coming session. Most estimates put the result somewhere in the range of 0.2% for the quarter but be wary of any deviations.

Key Points:

• After some solid gains, the AUD may need to cool-off going ahead.
• Overbought status is likely to exert some selling pressure.
• Losses should be limited to the 0.7611 handle.

After breaking through a zone of resistance that had presented a major obstacle to ongoing upsides, the AUD has reached yet another reversal zone that could see more moderate week moving forward. Indeed, losses may now be seen for the pair and that very zone of resistance that was giving us trouble at the start of the week could now represent a near-term cap on losses.

As shown below, this week's solid effort on the bull's part has pushed the AUDUSD above the zone of resistance identified at the start of the week and all the way up to the long-term declining trend line. As a result, it's no small wonder that traders are beginning to grow weary of reversal for the pair in the coming sessions. The breaking of not one but two well tested resistance levels is not a overly common event – especially given the coincidence of a historical reversal point and a falling trend line around the 0.7716 handle.

What's more, both stochastic and RSI readings are well and truly overbought which will be giving the bulls pause for thought. Combined with the degree to which the pair is challenging the upside Bollinger band, a tumble in the coming days is looking rather likely if it is not indeed already underway. Whilst not shown, candles on the shorter time frames are begin to suggest that a bearing engulfing is occurring which could mean that control of the pair is already being hand off to the bears.

Once a downtrend does take root, the Aussie Dollar is expected to tumble back to around the 0.7611 mark. Here, a historic reversal zone and the 23.6% Fibonacci level should dampen the bear's spirits and encourage yet another uptick in buying pressure. Importantly, the pair will have moved out of overbought territory by this stage which will leave it able to mount another attempt at breaking though the long-term trend line. Of course, whether or not it can actually breakout will need to be looked at closer to the time.

Overall, keep an eye on the Aussie Dollar moving ahead as, whatever happens, it's likely to be worth watching. Nevertheless, there is a fairly robust technical argument for a reversal which should be underway shortly. All this being said, don't neglect the fundamental side of things as this could still lead to some upsets along the way.