Posted at 28 July 2023 / Categories Market Roundups
Market Roundup
•U.S. Q2 advance GDP at 2.4% vs estimated 1.8%
•BOJ may tweak yield cap
•US indexes: Dow down 0.67%, S&P 500 down 0.64%, Nasdaq down 0.55%
•US GDP (QoQ) (Q2) 2.4%, 1.8% forecast, 2.0% previous
•US Wholesale Inventories (MoM) -0.3%, -0.3% forecast, 0.0% previous
•US Initial Jobless Claims 221K ,235K forecast, 228K previous
•US Continuing Jobless Claims 1,690K ,1,750K forecast, 1,754K previous
•US Jobless Claims 4-Week Avg. 233.75K ,242.10K forecast, 237.50K previous
• Canada May Average Weekly Earnings (YoY) 3.6 ,2.9 previous
• US Jun Goods Trade Balance -87.84B, -91.80B forecast, -91.13B previous
•US Jun Retail Inventories Ex Auto 0.4% ,-0.1% previous
•US Jun Durables Excluding Defense (MoM) 6.2% ,0.0% forecast, 3.0% previous
•US Jun Goods Orders Non Defense Ex Air (MoM) 0.2% ,-0.1% forecast, 0.7% previous
•US Jun Core Durable Goods Orders (MoM) 0.6%,0.0% forecast, 0.6% previous
•US Jun Durable Goods Orders (MoM) 4.7% ,1.0% forecast, 1.7% previous
•US GDP Price Index (QoQ) (Q2) 2.2% ,3.0% forecast, 4.1% previous
•US Core PCE Prices (Q2) 3.80%, 4.00% forecast, 4.90% previous
•US PCE Prices (Q2) 2.6% ,4.1% previous
•US GDP Sales (Q2) 2.3% ,1.4% forecast, 4.2% previous
•US Jun Pending Home Sales Index 76.8 , 76.5 previous
•US Jun Pending Home Sales (MoM) 0.3% ,-0.5% forecast,-2.7% previous
•US Natural Gas Storage19B forecast,41B previous
•US Jul KC Fed Composite Index -11,-7 forecast,-12 previous
•US KC Fed Manufacturing Index -20 ,-6 forecast,-10 previous
Looking Ahead Economic Data(GMT)
•01:30 Australia PPI (QoQ) (Q2) 0.9% forecast,1.0% previous
•01:30 Australia PPI (YoY) (Q2) 3.9% forecast, 5.2% previous
•01:30 Australia Jun Retail Sales (MoM) 0.0% forecast, 0.7% previous
•03:00 Japan BoJ Interest Rate Decision -0.10% forecast, -0.10% previous
•03:00 Japan BoJ Outlook Report (YoY) 03:00 previous
Looking Ahead Events And Other Releases(GMT)
•03:00 Japan BoJ Monetary Policy Statement
Currency Summaries
EUR/USD: Euro declined sharply on Thursday after the European Central Bank raised interest rates to 3.75% but said any future decisions will depend on economic data.The ECB pushed its main deposit rate up 25 basis points (bps), taking rates to their highest level in 23 years. ECB officials have raised rates by 425 bps since July 2022 as they have tried to quell a surge in inflation. The ECB’s decision came after the U.S. Federal Reserve raised rates to a range of 5.25% to 5.5% on Wednesday and also stressed that it would now be data dependent. Immediate resistance can be seen at 1.1037(38.2%fib), an upside break can trigger rise towards 1.1105 (July 26th high).On the downside, immediate support is seen at 1.0956 (50%fib), a break below could take the pair towards 1.0888 (61.8%fib).
GBP/USD: Sterling dipped against dollar on Thursday after the outcome ECB statement and upbeat US data. The European Central Bank raised interest rates by 25 basis points to their highest in over two decades and dropped a reference to rates having to be "brought" to a level that cuts inflation quickly enough. The ECB's decision follows a quarter percentage point rate hike by the U.S. Federal Reserve on Wednesday, which also spurred bets that the U.S. monetary tightening cycle was over. Data released on Thursday showed the U.S. economy grew faster than predicted in the second quarter and jobless claims unexpectedly fell last week.Immediate resistance can be seen at 1.2852 (38.2%fib), an upside break can trigger rise towards 1.2952(23.6%fib).On the downside, immediate support is seen at 1.2785(50%fib), a break below could take the pair towards 1.2701(61.8%fib).
USD/CAD: The Canadian dollar weakened against its broadly stronger U.S. counterpart on Thursday but the move was limited as investors bet on similar interest rate paths for the Bank of Canada and the Federal Reserve. Money markets are pricing in a peak interest rate of about 5.25% for the Bank of Canada over the coming months, not much less than the 5.42% terminal rate that is priced in for the Fed.Canadian GDP data for May, due on Friday, could guide expectations for additional BoC rate hikes. The Canadian dollar was trading 0.2% lower at 1.3227 to the greenback, or 75.60 U.S. cents, after moving in a range of 1.3159 to 1.3236.Immediate resistance can be seen at 1.3254 (38.2%fib), an upside break can trigger rise towards 1.3300 (Psychological level).On the downside, immediate support is seen at 1.3199 (5 DMA), a break below could take the pair towards 1.3155 (23.6%fib).
USD/JPY: The dollar dipped against yen on Thursday after a report indicated that the Bank of Japan will discuss tweaking its yield curve control policy at a meeting on Friday.The BOJ is largely seen maintaining its ultra-loose policy stance, although a tweak to the policy remains a possibility. The BOJ is that last in a trio of central banks to hold policy meetings in a week where both the Fed and the European Central Bank raised rates by a quarter of a percentage point, as expected . The dollar index , which measures the currency against six major peers, rose 0.692% to 101.790.The Japanese yen strengthened 0.77% versus the dollar at 139.14. Strong resistance can be seen at 139.88 (11DMA) an upside break can trigger rise towards 140.43 (38.2%fib).On the downside, immediate support is seen 138.58(50%fib), a break below could take the pair towards 138.00(Psychological level )
Equities Recap
Eurozone blue-chip shares rallied to their highest in more than 15 years on Thursday as investors anticipated the European Central Bank was close to the end of its tightening cycle.
UK's benchmark FTSE 100 closed up by 0.21 percent, Germany's Dax ended down by 1.70 percent, France’s CAC finished the day up by 2.05 percent.
U.S. stocks ended lower on Thursday after news that the Bank of Japan will allow long-term interest rates to rise sent U.S. yields higher, snapping the longest winning streak for the Dow since 1987.
Dow Jones closed down by 0.67% percent, S&P 500 closed down by 0.64 % percent, Nasdaq settled down by 0.64% percent.
Treasuries Recap
U.S. Treasury yields rose on Thursday after a slew of data showed the world's largest economy is on a generally solid footing, raising expectations it may just avoid recession despite 525 basis points in tightening over the last year and a a half.
U.S. Treasury two-year yields rose in the wake of the GDP data and was last up 6 bps at 4.884% . The benchmark 10-year yield climbed 6.1 bps to 3.912% .
Commodities Recap
Gold prices slipped more than 1% to a two-week low on Thursday, weighed down by a stronger dollar and an uptick in bond yields after better-than-expected U.S. economic data.
Spot gold dropped 1.2% to $1,948.69 per ounce by 01:53 p.m. EDT (1753 GMT), its lowest since July 12. U.S. gold futures settled 1.2% lower to $1,945.70.
Oil settled higher Thursday, with Brent crude topping $84 a barrel for the first time since April, supported by supply tightness following OPEC+ production cuts and renewed bullishness on the outlook for Chinese demand and global growth.
Brent crude settled up $1.32, or 1.6%, to $84.35 a barrel while U.S. West Texas Intermediate (WTI) crude settled up by $1.31, or 1.7%, to $80.09.