Dollar Gains Against Yen, Treasurys Flat in Data Thin-Trade

 
Snapshot: 

        -Dollar firmer; 10-year Treasury yield at 2.36%; U.S. stock futures mixed; Nymex at $50; gold at $1107.71
        -Watch for: annual industrial production and capacity utilization revision; June regional/state employment and unemployment; earnings from Verizon, Lockheed Martin, United Technologies, Apple, Microsoft, Yahoo, GoPro, Chipotle, Canadian Pacific Railway
        News: Fed Tells Big Banks to Shrink; Kathryn Dominguez to Be Nominated for Fed Governor; North Korea Rules Out Denuclearization Talks After Iran Deal
        The dollar rose to a one-month high against the yen in Asian trading Tuesday, as dollar buying across the board on expectations for the U.S. plan to raise rates helped push up the greenback against the Japanese currency.
        The euro was steady against the dollar.
        USD/CAD is likely to consolidate with a bullish bias after hitting a six-year high of 1.3024 on Monday. The pair is underpinned by positive dollar sentiment, soft oil prices and a dovish Bank of Canada monetary policy stance.
        At 5.50am ET, USD/JPY was at 124.29-30, EUR/USD was at 1.0852-55 and USD/CAD was at 1.2981-86.
        U.S. Treasurys nudged a fraction higher, pushing the yield on the 10-year down to 2.36%, but trade was extremely limited with no official events or data scheduled. According to Barclays, the market is now pricing in a 50%-60% chance of the Federal Reserve lifting interest rates in September and raising rates to 1.1% by the end of 2016. The September contract was 3/32 higher at 125-315.
        In Europe, government bond prices edged higher. The yield on 10-year German government bonds was at 0.69%, marginally lower on the day. Yields on 10-year Spanish bonds were at 1.90% and on 10-year Italian bonds at 1.89%, both also slightly lower.
        Wall Street was poised for a mixed open, as U.S. stock futures struggled for direction on a light data day likely to be dominated by high-profile earnings reports.
        Futures for the Nasdaq 100 index added 5.75 points, or 0.1% on track for a fourth straight session in record territory. The benchmark ended at an all-time closing high on Monday as markets extended a recent relief rally, which has been spurred by better-than-expected earnings and progress in Greece's bailout saga.
        Futures for the Dow slipped 9 points, or 0.1%, while those for the S&P 500 index gained 0.60 point, or less than 0.1%.
        On a quiet day on the data calendar investors were focusing on earnings, with Apple's third-quarter earnings report, due after hours, among the highlights.
        September Brent crude, the global benchmark, was up 0.2% at $56.72 a barrel on ICE Futures exchange in early European trade. On the New York Mercantile Exchange, light, sweet crude futures for delivery in August was 0.3% lower at $50 per barrel.
        Goldman Sachs economists said in a note that they now see the Nymex contract hitting $45 per barrel in the third quarter of this year, before stabilizing at around $60 in 2016. They also underscored their negative outlook on equities with exposure to the energy sector, saying that they will likely continue to suffer in the coming months.
        A stronger U.S. dollar was also weighing on oil prices after the ICE U.S. dollar index hit a three-month high on Monday, triggering a selloff across commodities as investors shifted to other asset classes.
        Gold prices were steadier on the London spot market, as the metal rebounded from sharp losses due to short-squeezing in the previous session.
        Spot gold was up 0.9% at $1,107.71 a troy ounce in morning European trading. Bargain-hunting and the weaker dollar helped gold prices to edge higher, although rising expectations of an impending rise in interest rates by the Fed capped gains.
        Fed Tells Big Banks to Shrink
        The Federal Reserve sent a message to the largest U.S. financial firms: Staying big is going to cost you.
        Kathryn Dominguez to Be Nominated for Fed Governor
        President Barack Obama will nominate University of Michigan economist Kathryn Dominguez for a seat on the Federal Reserve's Board of Governors, the White House said Monday.
        North Korea Rules Out Denuclearization Talks After Iran Deal
        North Korea called comparisons with Iran "illogical," quashing hopes that Tehran's landmark nuclear accord would inspire Pyongyang to follow suit.
        Israel, U.S. Vow Defense Bond Despite Iran Rift
        U.S. and Israeli defense chiefs sought to contain a rift over the recent nuclear agreement with Iran, saying they wouldn't let it get in the way of expanded cooperation against threats posed by Iran's proxies, particularly Hezbollah.
        KKR's First Data Files to Go Public
        Payment-processing giant First Data Corp. is returning to the public market nearly a decade after it was taken private in one of the biggest leveraged buyouts on record.
        EU Opens Antitrust Probe Into Ball-Rexam Deal
        European Union antitrust regulators said Monday they have opened an in-depth investigation into Ball Corp.'s GBP4.4 billion ($6.86 billion) acquisition of Rexam PLC amid concerns that the deal could lead to higher prices for beverage cans.
        Caesars Seeks to Win Over Bondholders
        Caesars said it offered a financial package to junior bondholders of its bankrupt operating division in an effort to win them over on a restructuring deal.
        Write to Sarka Halas at sarka.halas@wsj.com
        (END) Dow Jones Newswires

        July 21, 2015 06:12 ET (10:12 GMT)

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