Daily FX Update, 28 July 2015

·         US – Durable goods orders gained 3.4% m/m in June, with the headline number boosted by the volatile aircraft component.

·         US – Dallas Fed manufacturing survey undershot market expectations, it nonetheless recorded a further improvement in July from May’s low. The details of the survey were also encouraging, with new orders and employment up.

·         Euro area – M3 money supply rose 5.0% y/y in June. Overall, the credit transmission mechanism in the euro area continues to gain traction.

·         Euro area – German’s IFO survey notched additional gains in July, rising to 108.0 from 107.4 in June. These data suggest that Greek debt negotiations have had little impact on confidence within the euro area.

·         UK – CBI goods orders index declined to -10 in July from -7. However, quarterly business optimism and export optimism rose in July, suggesting the outlook for manufacturing is not as grim as the two year low the July headline number suggested.

·         Currency – Chinese concerns resurfaced after the equity market drop yesterday. The initial reaction was position reduction seeing USD offered and short EUR, JPY, AUD and NZD positions reduced. Risk aversion ultimately drove JPY crosses lower.

·         Equity – US equity markets fell after the sharp drop in the Shanghai composite index with the S&P 500 down 0.6%. While the losses were broadly based, energy and material stocks continued to underperform due to a further slide in commodity prices.

·         Rate – US 10-year Treasury yield fell to a two week low and remains a shade above its 8 July low amid the softer environment for equities and commodities.

·         Energy – Crude oil prices were weaker overnight. Brent prices hit a four month low, amid market concerns about Chinese demand and the number of US drilling rigs operating.

Precious Metal – Gold traded lower by 0.15% below $US1100 per ounce, with expectations for a near term US interest rate.  

INDICATIVE MAJOR CURRENCIES Last Close  8.05 am Snapshot        Bid                   Offer Expected Ranges for Today         Low                       High USD/MYR 3.8200 3.7990 3.8320 3.7970 3.8420 JPY/MYR (100) 3.1004 3.0680 3.1010 3.0600 3.1200 SGD/MYR 2.7916 2.7630 2.7960 2.7600 2.8100 EUR/MYR 4.2448 4.1710 4.2050 4.1500 4.2400 AUD/MYR 2.7871 2.7570 2.7900 2.7500 2.8200 GBP/MYR 5.9474 5.9040 5.9390 5.8800 5.9900 USD/JPY 123.21 123.48 123.89 123.08 124.08 EUR/USD 1.1112 1.0820 1.1130 1.0920 1.1030 AUD/USD 0.7296 0.7120 0.7430 0.7230 0.7330