Americas Roundup: Dollar Rises Against Euro on Solid Jobs Data, Oil Tumbles on U.s. Inventory Builds, Best Month Since April-September

Market Roundup

•    U.S. ADP data shows private sector jobs up 177k vs 175k forecast. •    U.S. ADP July payroll change revised to +194k from 179k. •    Brazil's Rousseff ousted in end to impeachment process. •    Canada's economy shrinks 1.6% in Q2, largest decline since 2009. •    Brazil's GDP falls in Q2 but investments revive. •    Mexico central bank lowers 2016, 2017 growth outlook. •    U.S. to urge G20 to boost economies, heed citizen anger. •    U.S. Aug Chicago PMI 51.5 vs forecast 54.0, 55.8 in July. •    U.S. July pending home sales +1.3% vs forecast +0.6%. •    Trump in unexpected trip to Mexico after harsh criticism.

Looking Ahead - Economic Data (GMT)

•    22:45 New Zealand Terms of Trade QQ Q2 forecast -2.00%, 4.40% -previous •    23:50 Japan Foreign Bond Investment w/e 433.1b - previous •    23:50 Japan Foreign Invest JP Stock w/e -229.6b - previous •    23:50 Japan Business Capex (MOF) YY Q2 4.20% - previous •    0:30 Japan Nikkei Mfg PMI Aug 49.6 - previous •    23:30 Australia AIG Manufacturing Index Aug 56.4 - previous •    1:30 Australia Capital Expenditure Q2 forecast -4.20%, -5.20% - previous •    1:30 Australia Retail Sales MM Jul forecast 0.30%, 0.10% - previous •    1:00 China NBS Non-Mfg PMI Aug 53.9 - previous •    1:00 China NBS Manufacturing PMI Aug forecast 49.9, 49.9 - previous •    1:45 China Caixin Mfg PMI Final Aug forecast 50.1, 50.6 - previous

Looking Ahead - Events, Other Releases (GMT)

•    No Significant Events

Currency Summaries EUR/USD is likely to find support at 1.1110 levels and currently trading at 1.1156 levels. The pair has made session high at 1.1165 and hit lows at 1.1131 levels. The euro declined against dollar on Wednesday, as the dollar strengthened across the board after data showed U.S. private employers maintained a steady pace of hiring in August and pending homes sales surged in July, suggesting the economy was regaining  momentum for the Federal Reserve to raise interest rates this year. The greenback rose to session highs after the ADP National Employment Report on Wednesday showed U.S. private employers adding 177,000 jobs in August, slightly above the 175,000 forecast by economists. The dollar pared gains, however, after the Chicago PMI index fell in August, and missed economists expectations. The dollar index, which measures the currency against a basket of six majors, rose as high as to 96.255, its highest level since Aug. 9, before falling back to 96.066. The euro weakened to $1.1121, the lowest since Aug. 10, before recovering back trade at $1.1157. GBP/USD is supported in the range of 1.3061 currently trading at 1.3136 levels. It reached session high at 1.3145 and hit low at 1.3073 levels. The British pound declined against US dollar on Wednesday, as investors flocked towards greenback after U.S. jobs data stoked speculation that the Federal Reserve would move ahead with plans to raise interest rates. The U.S. dollar extended gains against a basket of major currencies after a report by a payrolls processor showed U.S. private employers added 177,000 jobs in August. The figures come ahead of the U.S. Labor Department's more comprehensive non-farm payrolls report on Friday, which may offer clues on the outlook for U.S. interest rates. Pound hit a three-decade low of $1.2798 in July in the wake of the vote for Brexit. It has since recovered about 2 percent, but that still leaves it around 12 percent lower than where it was before the June 23 referendum on EU membership. Sterling hit low at $1.3070 after the US economic data, but recovering most of the ground to trade at 1.3137 in the late US session. USD/CAD is supported at 1.3056 levels and is trading at 1.3103 levels. It has made session high at 1.3145 and lows at 1.3100 levels. The Canadian dollar weakened against its U.S. counterpart on Wednesday as oil prices fell and domestic data showed a deep contraction in the country’s economy for the second quarter. Canada's economy shrank at an annualized 1.6 percent rate in the second quarter in its worst showing in seven years, hurt by a drop in exports and a disruption to oil production caused by wildfires in northern Alberta, according to data from Statistics Canada. Oil prices declined more than 3 percent , paring their big gains for August, after government data showed a large surprise weekly build in U.S. crude. The EIA said crude stockpiles rose for a second straight week, building by 2.3 million barrels last week, compared with analysts' expectations for a rise of 921,000 barrels. The Canadian dollar was last trading at C$1.3105 to the greenback, or 76.19 U.S. cents, weaker than Tuesday's close of C$1.3096. AUD/USD is supported around 0.7490 levels and currently trading at 0.7519 levels. It hit session high at 0.7523 and made session lows at 0.7496 levels. The Australian dollar traded near one-month lows on Wednesday after upbeat U.S. data added to the risk of a near-term rate hike by the Federal Reserve. The Australian dollar  held at $0.7521, after touching $0.7500 on Tuesday, its lowest since Aug.2. The Aussie has been on a downtrend since hitting a near 3-1/2 month high of $0.7760 earlier in August. It is now trading below a key support of around $0.7530, and could hit $0.7450, a level last visited on July 27. The greenback received a boost on Wednesday after data showed U.S. private employers added 177,000 jobs in August, above economists' forecasts and supporting expectations for Friday's closely watched U.S. payrolls report to be strong. In Australia, the focus will be on capital expenditure and retail sales numbers both market sensitive releases due on Thursday. Equities Recap European shares edged lower on Wednesday, weighed down by losses among miners and energy stocks, but banks extended recent gains amid talk of possible tie-ups in the battered sector. UK's benchmark FTSE 100 closed down 0.52 percent, the pan-European FTSEurofirst 300 ended the day down by 0.28 percent, Germany's Dax ended down 0.45 percent, France’s CAC finished the day down by 0.17 percent. US stocks ended lower on Wall Street on Wednesday, as energy shares tracked oil prices lower, and the S&P posted a loss for August, the first negative month for the benchmark index since February. Dow Jones closed down by 0.29 percent, S&P 500 ended down by 0.24 percent, Nasdaq finished the day down by 0.19 percent. Treasuries Recap Yields on benchmark U.S. 10-year Treasury notes were little moved on Wednesday but notched their largest monthly gain in more than a year as strong U.S. data and limited volatility reduced the appetite for safe-haven U.S. government debt. The benchmark 10-year Treasury notes rose 3/32 in price from their Tuesday close to yield 1.56 percent. Two year prices rose 1/32, yielding 0.79 percent. Commodities Recap Gold slid to a two-month low on Wednesday after forecast-beating U.S. jobs data stoked speculation that the Federal Reserve would move ahead with plans to raise interest rates, briefly propelling the dollar index to its highest in three weeks. Spot gold fell to $1,304.91 an ounce, its lowest since June 24, the day after Britain voted to leave the European Union. It was down 0.2 percent at $1,308.01 an ounce by 2:47 p.m. EDT (1847 GMT) after the dollar turned slightly lower. U.S. gold futures settled down 0.4 percent at $1,311.40. Oil prices fell 3 percent or more on Wednesday, paring their big gains for August, after government data showed a large surprise weekly build in U.S. crude and distillate stockpiles and a smaller-than-expected drawdown in gasoline. Brent crude futures settled down $1.33, or 2.8 percent, at $47.04 per barrel. It rose nearly 11 percent for August.

U.S. crude's West Texas Intermediate (WTI) futures fell $1.65, or 3.6 percent, to close at $44.70. It gained more than 7 percent for the month.

 


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