USD/JPY/The S&P

USD/JPY has posted gains on Tuesday, as the pair has pushed above the 102 line and hit three-week highs. The dollar took advantage of disappointing Japanese consumer spending in June. On Tuesday, Japan will release Preliminary Industrial Production. Over in the US, today’s highlight is CB Consumer Confidence. The markets are expecting another strong showing from the June release.
Japanese data was dismal on Tuesday, as consumers continue to keep a tight grip on the purse strings. Household Spending declined by 3.0%, the third straight drop. The figure did beat the estimate of -3.7%. Retail Sales, the primary gauge of consumer spending, posted a decline of -0.6%, worse than the estimate of -0.4%. This was also a third straight decline. As well, Unemployment Rate rose to 3.7%, above the estimate of 3.5% and the highest level recorded since January. These figures point to trouble, as less consumer spending will likely translate into decreased economic growth and put more pressure on the Japanese currency.


The S&P/Case-Shiller price report shows a sharp slowdown in US home prices in May, which Mizuho Securities USA chief economist Steven Ricchiuto says reflects the US housing market losing momentum. "This downshift in prices reflects the fact that the housing market has lost its upside momentum despite the low level of yields," he says. "This is something none of the growth bulls were expecting to develop this year." The choppy recovery in the housing market is a part of the economy the Fed is still keeping a close eye on, and could build a case for the doves to hold rates low for longer.

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Gasoline inventories and Gold

Futures declined as much has 0.5 percent in New York, and were poised for a weekly loss of 1.4 percent. Gasoline inventories climbed to the highest level since March, while crude supplies dropped for a fourth week, Energy Information Administration data showed on July 23. President Barack Obama said he expects the downing of the Malaysian Air jet in Ukraine to push European nations toward tougher sanctions against Russia.
U.S. refineries are clearly turning more crude oil into refined petroleum products at present than is actually needed,Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said by e-mail. The build in gasoline inventories significantly exceeded expectations. Besides the increase in production, this was also due to weaker demand.
WTI for September delivery fell as much as 51 cents to $101.56 a barrel in electronic trading on the New York Mercantile Exchange, and traded for $101.66 at 1:11 p.m. London time. The contract slid $1.05 to $102.07 yesterday, the lowest close since July 16. The volume of all futures traded was 10 percent above the 100-day average for the time of day.

Bullion fell as much as 1.3 percent to $1,289.40 an ounce yesterday, the lowest since June 19, as U.S. equities reached a record after data showed jobless claims fell and global manufacturing increased. The metal, which yesterday fell near its 200-day moving average, slid 28 percent last year on expectations the Federal Reserve would tighten monetary policy.
U.S. interest rates may rise sooner than forecast if the labor market continues to improve more quickly than anticipated,” Fed Chair Janet Yellen said last week, adding the central bank must press on with stimulus because  significant  remains. Gold is heading for a monthly loss even amid unrest in Ukraine and the Middle East.
Gold decline to near the 200-day moving average  so far been enough to halt the slide, as short-sellers have used that support to book some profit,Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said today by e-mail. Considering the improvement in recent data and speculation about the Feds intentions with regard to tightening, the market will be nervous over the coming week, leaving little room to the upside.

Gold has dipped EUR/USD

Gold has dipped under the key level of $1300, as the spot price stands at $1298.67 per ounce late the European session. The metal has now slipped about 2% in little over a week. In the US, Unemployment Claims looked excellent, dropping to its lowest level in over eight years. New Home Sales will be released later in the day. Geopolitical tensions are bad news for the markets, which crave stability. With violence continuing in Ukraine and Gaza, nervous investors have rallied around the safe-haven US dollar as well as gold, at the expense of other currencies. In Ukraine, the downing of a Malaysian Airlines jet, apparently by pro-Russian separatists, has seriously frayed relations between the West and Russia, which have already been strained since the latter annexed Crimea. Fighting continues between the separatists and Ukrainian forces in Eastern Ukraine. The Europeans are threatening stronger sanctions against Russia, and escalating tensions in eastern Ukraine could shake up the markets. In the Middle East, the fighting in Gaza between Hamas and Israel has intensified, as Israel presses on with a ground offensive and casualties rise.

EUR/USD has posted slight gains on Thursday, as the pair trades in the high-1.34 range in the European session. The euro received some help as German and Eurozone PMIs met or exceeded expectations. However, French PMI data was not as positive. In Spain, the unemployment rate dropped below 25% for the first time in almost two years. In the US, today’s key events are Unemployment Claims and New Home Sales. The markets are braced for weaker numbers from both releases.

China gold

China gold demand fell 19 percent in the first six months of this year as investors bought fewer bars and coins, offsetting increased demand for jewelry, the China Gold Association said.
Consumption in China, which passed India last year as the worlds biggest user, slid to 569.5 metric tons, the Beijing-based association said in a statement today. Demand for bars sank 62 percent, while gold use in jewelry rose 11 percent, according to the statement.
An 8.9 percent price rise this year amid unrest in Ukraine and the Middle East has hurt consumption in China, which is expected to be “more or less the same” on a full-year basis in 2014, Zhang Bingnan, vice-chairman and general secretary at the association, said in an interview in Singapore last month. Demand will rise about 25 percent in the next four years as an increasing population gets wealthier, the London-based World Gold Council said in April.

Gold,AUD/USD

Gold has edged lower on Tuesday, as the spot price stands at $1306.09 per ounce in the European session. On the release front, it’s a busy day in the US, highlighted by Core CPI and Existing Home Sales, the first major events of the week from the US. The markets are bracing for another weak outing from Core CPI, while Existing Home Sales is  expected to improve sharply.
International trouble spots continue to grab the headlines, as nervous investors keep an eye on events Ukraine and the Middle East. Last week’s downing of a Malaysian Airlines jet, apparently by proRussian separatists, has seriously frayed relations between Europe and the US with Russia, which have already been strained since the latter annexed Crimea.

AUD/USD has posted gains on Tuesday, as the pair has pushed above the 0.94 line in the North American session. The Aussie has moved higher as US CPI posted a weak gain of 0.1% last month. Today’s other key release is Existing Home Sales, which will be released later in the day. In Australia, RBA Governor Glenn Stevens spoke at an event in Sydney. We’ll get a look at Australian CPI early on Wednesday.
US inflation numbers continue to struggle. Core CPI posted a paltry gain of 0.1%, shy of the estimate of 0.1%. The key index has looked in anemic in 2014, with its highest gain this year at just 0.3%. CPI gained 0.3% last month, matching the forecast. The markets are expecting better news on the housing front, as Existing Home Sales is expected to show strong gains in June.

EUR and GBP

The euro gained on the U.S. dollar and the yen held steady in a thinned-holiday Asian trading session overnight. But as tensions rise between Russia and the West, and the violence in the Gaza Strip becomes increasingly bloody, geopolitical events remain the focal point for investors and all asset classes.
The corporate earnings season is underway but even favorable U.S. earnings have been seemingly forgotten. Likewise, the aggressive search for safe haven trading strategies has temporarily fallen since the initial shocks of late last week. Markets and investors are seeking clear guidance from authorities before pursuing any aggressive strategies.
As we head stateside, currency technical levels remain in focus following last Friday’s tests for the EUR and GBP both outright and on the crosses. There has been no sustained breakout just yet, especially for the 18-member single unit, which tested and slightly breached the lower end of the trading range at the ‚¬1.3500 level at the end of last week. For many, with the pair having managed to hold above the pivotal January low of ‚¬1.3477, it will allow for more consolidation before the next onslaught with purpose.
Ongoing geopolitical events should leave the EUR vulnerable; especially ahead of a European Union foreign ministers meet scheduled for tomorrow to discuss sanctions against Russia. Market participants are required to follow both the Treasury and bund yields for clues. Currently, yield differentials are also hinting that the EUR could come under renewed fresh pressure with German 10-year yields probing fresh, historically low levels (bund 10′s +1.16%, U.S. 10′s +2.28%).