OVERNIGHT NEWS

• Friday was interesting as we got first 1st batch of major post-Brexit data. Brexit vote shows little initial impact in continental Europe as July Flash PMIs surprise on the upside.
• Manufacturing PMI beat expectations with strong upside surprise in German and French services confidence while the Euro Zone overall showed a slight decline down 0.2 points to 52.9 in July, but against consensus expectations of a much sharper fall.
• ECB Survey of Professional Forecasters noted that Brexit vote seen having limited impact on inflation and slight reduction in growth
• On the contrary the UK show very different development. PMI Services contracted for 1st time in 43 months following Brexit 47.4 from 52.3 prior its lowest reading since April 2009.

FOREIGN EXCHANGE (INDICATIVE RATES)

Currency	Last	% Change	Overnight Range
DXY	97.40	0.56%	96.825 - 97.543
EURUSD	1.0967	-0.55%	1.0956 - 1.1041
USDJPY	106.35	0.53%	105.57 - 106.42
AUDUSD	0.7472	-0.51%	0.7443 - 0.7506
GBPUSD	1.3142	-0.69%	1.3079 - 1.32391

(Source: FabTrader)

Commodities (INDICATIVE RATES)

Currency	Price USD	% Change	Overnight Range
Gold	1321.84	0.79%	1319.77 - 1333.54
Silver	19.59	1.00%	19.5682 - 19.9524
Oil (BRENT)	45.73	1.23%	45.17 - 46.5
Oil (WTI)	44.23	1.41%	43.74 - 44.97

(Source: Bloomberg and Saxo)

COMMODITIES

Precious Metals: Switzerland’s combined exports to Hong Kong, China and India totalled 75 tons, the highest volume since January and points to reviving gold demand in Asia.
Lifted by gold, silver gained by 2%, nearing the $20 mark again as first half year imports were 6% up year-on-year at 1,453 tons.

Oil: Oil futures fell to 11-week low, down nearly 4% on week as prospects for Libyan crude supplies added to concerns that a glut of oil products will cut demand for crude by refiners. Further pressure came as data showed fourth-straight weekly rise in the number of active U.S. rigs drilling for oil and inventories of gasoline are still growing globally, despite being in the midst of the annual driving season.

FOREX NEWS

• EURUSD
• This is a carryover once again from last week, as we never got a breakout signal for EURUSD out of the current tight range and something needs to give as we await a directional resolution soon after a tease below the 1.1000 level this week. We still prefer the downside, but traders may want to wait for a technical break before getting involved after a long, frustrating bout of trading within the range. And if the Fed fails to deliver sufficiently hawkish guidance to boost odds of a rate hike in September or December, the price may resolve higher again.
• Trading stance: EURUSD traders may want to wait until after the FOMC meeting to trade EURUSD next week, especially if we fail to see a close above 1.1150 or below 1.1000. Those are the breakout levels that could lead to 200-pip extension of the price or more in the direction of the break after the FOMC statement release.
• JPY cross downside
• The next Bank of Japan meeting is up on Friday next week after a recent JPY sell-off driven by expectations that after the strong endorsement of Prime Minister Abe after the Upper House elections, some bold new policy moves could be forthcoming. The market may be over-anticipating on this front and the risk is that the BoJ underdelivers at next week’s meeting when most of the focus is on fiscal stimulus/eventual helicopter money anyway. And it could take more time to define and launch the eventual fiscal stimulus, while helicopter money (actual cash injections into consumers’ hands) looks very far off after explicit rejections of legality and possibility of the idea by government officials.
• Trading stance: When the JPY moves, it often does so across the board, so traders may choose relatively indiscriminately among JPY crosses, though GBPJPY downside might merit extra consideration given the weak UK flash PMI data on Friday that pushed the sterling firmly back lower after an attempt to the strong side this week.

 

Oil prices dip on ongoing oversupply, economic headwinds

Oil prices held near two-month lows on Monday amid worries that a global crude and refined product glut would weigh on markets for some time to come.
International Brent crude oil futures were trading at $45.59 per barrel at 0424 GMT, down 10 cents from their previous close. U.S. West Texas Intermediate (WTI) crude was at $44.09, also down 10 cents a barrel.
Both benchmarks were close to two-month lows reached last week.
Traders said that ongoing oversupply and growing economic headwinds were weighing on oil.
"Headwinds (are) growing for 2H16, hence our bearish oil bias," Morgan Stanley said on Monday in a note to clients, pointing to resilient U.S. supply, falling demand for transport fuels, and oversupply by refiners, particularly in gasoline.
"As a result, crude oil demand from refineries is underperforming product demand by a wide margin," the U.S. bank said, adding that growing economic risks added to downside risks for oil.
A strong dollar and a fourth weekly rise in the U.S. oil rig count also weighed on prices, traders said. [USD/] [RIG/U]
Money managers cut their net long U.S. crude futures and options positions, which would profit from rising prices, to a four-month low in the week to July 19, the U.S. Commodity Futures Trading Commission said on Friday.
Libya's hopes to boost crude exports have been dealt a blow after the head of the National Oil Corporation (NOC) objected to a deal between the government and local guards to reopen key ports.
Read More at www.reuters.com