Australian stocks advanced 1.65 percent, a solid jump from a 2.3 percent loss over the previous two sessions while markets in Seoul were briefly shaken by missile launched by the North Koen regime. The Australian dollar climbed 0.1 percent to $0.7666 ahead of a Reserve Bank of Australia meeting at which the central bank is expected to leave benchmark interest rates unchanged at a record low 1.5 percent. The US dollar gained after the June domestic manufacturing index activity rose more than expected coupled by a positive and strong showing of government outlays on construction projects in May. This helped the U.S Treasury yields surge to their highest level in nine years. U.S. markets are closed today for the July 4 Independence Day holiday. The euro was little changed while the sterling inched higher but failed to make gains on most of Monday's 0.7 percent loss after less than expected data from Britain's manufacturing sector.
In commodities, oil prices regressed in early trading today, halting a run of eight straight days on signs that the rise in US oil production is running out of steam. A significant number of traders closed positions ahead of the US July 4 Independence Day, while crude Brent faced technical resistance as it nears the $50 mark per barrel. WTI futures were trading down by 0.5 percent a 25cents decline per barrel and the Brent crude fell with over 25 cents to $49.41 level per barrel in the early trading. Some analysts predict that the U.S production and drilling were a small but significant shift in the dynamics in the oil market which would ultimately take some pressure off OPEC’s struggling efforts to take control of oversupply. The pledge by OPEC to cut production to 1.2 million barrels per day in output between January 2017 and March next year, is being undermined by the rise in output from Nigeria and Libya who are exempt from the cuts.
Coming up today is the GBP Construction PMI which is released monthly. This indicator show UK economic health through conducting a survey of about 170 purchasing managers who are asked to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories. The usual effect is that the sterling is positively impacted if the actual release is greater than the forecast and the opposite-actual being less than the prediction, the sterling usually is impacted negatively.