- U.S. existing home sales at 5.39M vs. 5.52M forecast, 5.57M previous
- U.S. EIA crude oil inventories up 2.5 million barrels
- Fonterra increased milk price forecast for 2016/2017
The Greenback and the pound were the big winners for the day, as traders seemed to shrug off downbeat data from the U.S. and U.K. economies.
Weak U.S. housing figures – U.S. existing home sales slumped from 5.57 million in June to just 5.39 million in July, worse than the estimated fall to 5.52 million. To top it off, the house price index showed a meager 0.2% uptick in June, slower than the estimated 0.3% increase. Components of the existing home sales report showed that low inventory levels for the property market are keeping a lid on sales, which suggests that sufficient demand is still present.
Crude oil price drop – The U.S. Energy Information Administration reported a buildup of 2.5 million barrels in stockpiles instead of the estimated draw of 0.5 million barrels, bringing oversupply fears back to the table. WTI crude oil fell from $47.70 per barrel to a low of $46.40 per barrel, even after Iran and Ecuador have expressed willingness to help keep prices afloat.
Fonterra milk forecast upgrade – Thanks to the recent gains in GDT dairy prices, Fonterra decided it was time to upgrade their forecasts for milk prices this year and the next. The world’s biggest dairy exporter and New Zealand’s largest company projects that farmgate milk prices will be at $4.75 per kilogram, representing an upgrade of 50 cents from their earlier forecast and potentially adding almost $1 billion to the economy.
Major Currency Movers:
GBP – Sterling was unstoppable in its climb for the day since traders have been busy unwinding their Brexit shorts.
GBP/USD edged up from 1.3229 to a high of 1.3274 before closing at 1.3235 (+0.34%), GBP/JPY climbed from 132.62 to a high of 133.30 (+0.51%), EUR/GBP slid all the way down from .8518 to a low of .8486 (-0.37%), and GBP/AUD rose from 1.7351 to 1.7418 (+0.38%).
USD – Safe-haven flows supported the Greenback despite weak U.S. data, as U.S. equities closed lower for the day.
EUR/USD dropped from 1.1267 to 1.1244 (-0.20%), USD/CHF climbed from .9664 then consolidated around .9675 (+0.11%), USD/JPY bounced off 100.25 to 100.63 (+0.38%), and AUD/USD slid from .7625 to .7599 (-0.34%).
Watch Out For:
- 11:50 pm GMT: Japan’s services producer price index (0.1% expected, 0.2% previous)
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
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