USD pares yesterday’s gain, European equities advance

Summary:

• European stocks trade higher on the day

• Commerzbank declines despite earnings and revenue beat

• USDTRY trades back above the 5.30 handle

• Ivey PMI reading to spur additional volatility on CAD in the afternoon

After yesterday’s lacklustre European session investors from the Old Continent launched today’s trade in more upbeat moods. We are observing gains on almost every European blue chip index. The Hungarian BUX is the sole exception as it is trading around 0.5% lower at press time. Taking a look at the G10 currencies one can see that the US dollar is giving back its yesterday’s gains while the Norwegian krone pushes higher the most for another day. AUD is also trading noticeably higher thanks to the RBA meeting. As USD is weakening it is not surprising that we are observing gains on the commodity market. Industrial and precious metals advance, just like grains and energy commodities. Cocoa is the sole commodity experiencing a bigger sell-off today as it is trading 1.2% lower at press time. CAD traders should be on guard as Ivey PMI reading is scheduled for release in the afternoon (3:00 pm BST) while investors from the oil market may want to stay cautious at 9:40 pm BST as the weekly API oil inventories data will be published.

While the case of pastor Brunson and the review of duty-free programme coincide in time the US officials claim they are not related. The review is said to be an aftermath of Turkey levying retaliatory tariffs on the US goods (including tobacco, whiskey and machinery equipment) after the world’s biggest economy imposed duties on steel and aluminium imports.

The US equity indices continue to advance towards the all-time-highs. Meanwhile, the Japanese Nikkei keeps trading within the consolidation range started in a spring of this year. The trading range has narrowed as of late and the benchmark is trading close to the relevant resistance level at 23000 pts.

The German lender reported higher than expected net profit, operating profit as well as revenue for the second quarter but its profit margins shrank substantially. On top of that the bank’s core capital level was dented as well making analysts fussed with regard to the future performance.

In line with widespread expectations the Reserve Bank of Australia kept all interest rates untouched offering a slight dovish change though. The bank said that headline inflation will be a bit lower than previously seen. Nevertheless, it is unlikely to lead to any changes in monetary policy in the foreseeable future as odds for rate cuts equal exactly zero.