MARKETS SEE LIGHT RELEASE SCHEDULE ON TUESDAY
The financial markets will experience a light release schedule on Tuesday, giving investors time to absorb recent data releases while looking ahead to a more active second half of the week.
The European data wire begins at 05:45 GMT with a report on Swiss unemployment. Switzerland’s jobless rate is expected to hold steady at 3.2% in July.
Just 15 minutes later, Germany’s Federal Statistics Office will report on the June trade balance. Berlin’s trade surplus is forecast to widen to €21 billion in June from €20.3 billion the month before. Exports are projected to drop 0.1% after rising 1.4% the previous month. Imports, meanwhile, are forecast to climb 0.2% after gaining 1.2% in May.
France will also release its latest trade figures on Monday. Paris’ trade deficit is forecast to widen to €5.1 billion in June from €4.9 billion the previous month.
There are no major data releases scheduled in North America. The National Federation of Independent Business (NFIB) will release its monthly business optimism index at 10:00 GMT. The July report is expected to show no change from the previous month.
Oil traders will be keeping a close eye on the weekly US crude inventory report from the American Petroleum Institute (API) at 17:00 GMT. Crude prices declined on Monday, as investors evaluated recent data pointing to a broad pickup in crude output from the Organization of the Petroleum Exporting Countries (OPEC).
Investors will also be evaluating Chinese trade data throughout the day. China’s dollar-denominated trade surplus widened to $46.74 billion in July from $42.77 billion in June, the General Administration of Customs reported Tuesday. Exports rose at an annualized 7.2%, following a gain of 11.3% the month before. Imports spiked 14.7% year-over-year, following a gain of 23.1%.
When measured in Chinese yuan, the trade surplus rose to 321.2 billion yuan from 294.3 billion, official data showed.
After climbing above 1.1900 on Friday, the EUR/USD has broken to the downside, with traders increasing their short positions on the pair. The EUR/USD is currently holding just above the 1.18 level, with prices vulnerable to a bigger reversal now that the monthlong uptrend has been disrupted.
The British pound stemmed its decline on Monday following heavy losses during the previous two sessions. The GBP/USD exchange rate approached the mid-1.32 region ahead of the Bank of England rate decision last Thursday. Cable declined some 200 pips following the rate announcement on account of only two MPC members voting to raise interest rates.
Oil prices were down in overnight trade, with US crude futures hovering around $49.24 a barrel. Crude prices remain in a firm uptrend, but have faced significant resistance around the $50 a barrel mark. Fundamentals continue to drive the market, as investors evaluate OPEC’s efforts to rein in supplies.