Daily Morning Report & Daily Technical Levels 24/08/2015

Daily Morning Report 24.08.2015

The safe-haven yen gained smartly in Asia on Monday as the Shanghai Composite plunged and signs of further monetary easing in China remain cloudy. USD/JPY traded at 120.87, down 0.97% on the China concerns, while AUD/USD was quoted at 0.7218, down 1.29%. NZD/USD traded at 0.6597, down 1.32%. EUR/USD gained 0.90% to 1.1486. The Shanghai Composite fell more than 7%, while the Nikkei 225 was down 3.21% and the S&P/ASX 200 eased 3.14%. The Hang Seng index was off 3.65%. As well, expectations of a weekend deposit reserve rate cut by China failed to materialize. The State Council however over the weekend officially allowed pension funds to be invested in the stock market – which is expected to bring CNY1 trillion in new funds to the market but hasn’t helped investor confidence. The yuan fell slightly against the U.S. dollar in the morning. It was last at 6.3950 against the dollar compared with Friday’s close of 6.3887. The PBOC set the yuan fixing at 6.3862 – basically unchanged from Friday’s 6.3864. Earlier, a statement that the Reserve Bank of New Zealand won’t tighten interest rates to moderate risks from rising house prices in Auckland because that will deviate from the primary goal of price stability was made by Deputy Governor Grant Spencer. These risks are on the “what keeps us awake at night” list, Spencer said. But moderating the housing market through monetary policy isn’t an option right now, he said. “Our view, and that of the major central banks, is not if this requires monetary policy to deviate from its primary goal of achieving stability in the general level of prices,” he said. “The bank will continue to monitor housing-market developments and modify its macroprudential policies accordingly,” Spencer said. Laster, the final June Japanese Leading Index is due out at 1400 local time (0500 GMT). Federal Reserve Bank of Atlanta President Dennis Lockhart is to speak later on Monday and his comments will be closely watched. The U.S. dollar index, which measures the greenback against a trade-weighted index of currencies, was quoted flat at 94.84. Last week, the dollar fell more than 1% against the euro and the yen on Friday as weak factory data from China added to concerns over slowing global growth and added to worries that the Federal Reserve may delay hiking interest rates. Data on Friday showed that manufacturing activity in China contracted at the fastest rate in six-and-a-half years in August, exacerbating fears over a slowdown in the world’s second-largest economy. The preliminary reading of the Caixin China manufacturing purchasing managers’ index came in at 47.1, down from July’s final reading of 47.8. It was the weakest level since March 2009 and was well below the 50 levels separating expansion from contraction. The weak data underlined fears over the outlook for global growth and added to doubts over whether the U.S. central bank will hike interest rates next month. Financial markets have been roiled since China devalued the yuan on August 11, sparking a selloff in equities, commodities, and emerging-market assets. The single currency received an additional boost after data showed that eurozone private sector growth unexpectedly accelerated this month as new orders rose. The preliminary reading of the euro area’s composite PMI, which covers both the manufacturing and service sectors, rose to 54.1 this month from July’s 53.9. Economists had expected the index to tick down to 53.8. In recent months the dollar had been boosted by expectations that the improving U.S. economy would prompt the Fed to raise borrowing costs as soon as September. But mounting uncertainty over the global growth outlook and the subdued U.S. inflation outlook has seen investors push back expectations for an initial rate hike to December. In the week ahead, investors will be looking ahead to Wednesday’s data on U.S. durable goods orders for a fresh reading on the strength of the economy.

 

24.08.2015 – 07:15 GMT+3

Daily Technical Levels

EUR/USD

GBP/USD

USD/JPY

AUD/USD

USD/CAD

USD/CHF

R3:

1,1522

1,5759

121,98

0,7307

1,3304

0,9502

R2:

1,1487

1,5724

121,63

0,7272

1,3269

0,9467

R1:

1,1462

1,5699

121,38

0,7247

1,3244

0,9442

S1:

1,1432

1,5669

121,08

0,7217

1,3214

0,9412

S2:

1,1407

1,5644

120,83

0,7192

1,3189

0,9387

S3:

1,1372

1,5609

120,48

0,7157

1,3154

0,9352