Posted at 07 August 2023 / Categories Market Roundups
Market Roundup
•Fed's Bowman says additional rate hikes needed
•NY Fed's Williams says monetary policy needs to stay restrictive
•Investors cautious ahead of Chinese, US data
•US indexes up: Dow 1.16%, S&P 0.90%, Nasdaq 0.61%
• French 3-Month BTF Auction 3.617%, 3.588% previous
• French 6-Month BTF Auction 3.585%,3.634% previous
• French 12-Month BTF Auction 3.574%,3.657% previous
• US Jul CB Employment Trends Index 115.31 forecast, 114.31 previous
• US 3-Month Bill Auction 5.290%,5.280% previous
• US 6-Month Bill Auction 5.265%, 5.270% previous
Looking Ahead Economic Data(GMT)
•23:30 Japan Jun Household Spending (MoM) 0.3% forecast,-1.1% previous
•23:30 Japan Jun Household Spending (YoY) -4.1% forecast,-4.0% previous
•23:30 Japan Jun Overtime Pay (YoY) 0.50% previous
•23:50 Japan Jun Adjusted Current Account 2.24T forecast,1.70T previous
•23:50 Japan Jul Bank Lending (YoY) 3.1% forecast,3.2% previous
•23:50 Japan Jun Current Account n.s.a 1.395T forecast,1.862T previous
•00:30 Australia Aug Westpac Consumer Sentiment 2.7% previous
•01:30 Australia Jul NAB Business Survey 8 forecast,9 previous
•01:30 Australia Jul NAB Business Confidence -1 forecast,0 previous
•01:30 Australia Building Approvals -18.00% forecast, -9.80% previous
•01:30 Australia Private House Approvals -1.3% forecast, 0.8% previous
•03:00 China Jul Exports -8.90M forecast, -8.30M previous
•03:00 China Jul Exports (YoY) -9.8% forecast, -12.4% previous
•03:00 China Jul Imports (YoY) -5.6% forecast,-6.8% previous
•03:00 China Jul Trade Balance (USD) 67.80B forecast,70.62B previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Summaries
EUR/USD: The euro was little changed against dollar on Monday as global markets were in a cautious mood after a mixed U.S. jobs report and ahead of U.S. and Chinese inflation figures later this week. Data on the U.S. consumer price index to be released Thursday is forecast to show headline inflation picking up slightly in July to an annual 3.3%, while the core rate is seen unchanged at 4.8%, according to a poll of economists. The data will be assessed whether more rate hikes are needed to tame inflation. Futures imply only a 13.5% chance of a Fed rate hike in September, but expectations rise to 30.1% in November. A rate cut below 5% is not expected until May 1, 2024. Immediate resistance can be seen at 1.1034(38.2%fib), an upside break can trigger rise towards 1.1088(Jul 25th high).On the downside, immediate support is seen at 1.0980(5DMA), a break below could take the pair towards 1.0957( (50%fib).
GBP/USD: The pound held steady just above a five-week low on Monday as markets continued to digest the previous week’s 25-basis-point rate increase by the Bank of England, and its implications for future monetary policy The BoE raised rates by 25 bps to 5.25% last Thursday, a slowdown from its 50 basis point hike in June, but said high inflation meant rates would remain elevated for some time.Currencies are very sensitive to central bank policy at the moment and markets are pricing in two more 25-basis-point rate increases from the BoE. British second-quarter GDP data is due Friday, it is unlikely to spark a major reaction in the pound. Immediate resistance can be seen at 1.2817(14DMA), an upside break can trigger rise towards 1.2898(23.6%fib).On the downside, immediate support is seen at 1.2717(Daily low), a break below could take the pair towards 1.2662(50%fib).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Monday as traders digested Friday’s jobs report, with attention turning to U.S. inflation data later this week . The U.S. economy added fewer jobs than expected in July, data showed on Friday, but solid wage gains and a decline in the unemployment rate pointed to continued tightness in labor market conditions. The week's main event for currency markets is U.S. inflation data, due Thursday, which will underscore or challenge market expectations that the Fed has finished its rate-raising cycle. The loonie was last trading 0.02% lower at 1.3370 to the greenback .Immediate resistance can be seen at 1.3407(38.2% fib), an upside break can trigger rise towards 1.3473 (23.6% fib).On the downside, immediate support is seen at 1.3368(5DMA), a break below could take the pair towards 1.3346 (50% fib).
USD/JPY: The U.S. dollar rose against Japanese yen on Monday as mixed U.S. jobs report triggered a rally dollar, but new hurdles lay ahead in the shape of U.S. and Chinese inflation figures due later this week. Data on U.S. consumer prices are forecast to show headline inflation picking up slightly to an annual 3.3%, but the more important core rate is seen slowing to 4.7%. Some of the Fed comments over the weekend from Michelle Bowman came in more hawkish than people expected. The U.S. Federal Reserve will likely need to raise interest rates further to bring down inflation, Bowman said on Saturday. Futures imply only a 12% chance of a Fed rate hike in September, and 24% for a rise by year-end. Strong resistance can be seen at 142.82(23.6%fib) an upside break can trigger rise towards 144.12(Higher BB).On the downside, immediate support is seen 141.65(14DMA), a break below could take the pair towards 140.80(38.2%fib)
Equities Recap
European stocks edged higher on Monday as investors awaited key inflation figures from across the globe this week to gauge the outlook for interest rates, while the defence sector rose to record highs amid rising geopolitical uncertainty.
UK's benchmark FTSE 100 closed down by 0.13 percent, Germany's Dax ended down by 0.01 percent, France’s CAC finished the day up by 0. 06 percent.
U.S. stocks finished higher on Monday, regaining some of the ground lost last week, as investors added positions ahead of Thursday's highly awaited U.S. inflation report.
Dow Jones closed up by 1.16 percent, S&P 500 ended down by 0.90 percent, Nasdaq finished the day up by 0.61 percent.
Treasuries Recap
Benchmark U.S. Treasury yields rose on Monday but held below almost nine-month highs reached on Friday before the U.S. Treasury Department will this week sell $103 billion in coupon-bearing debt.
Benchmark 10-year yields were up one basis point at 4.070%. They reached 4.206% on Friday, the highest since Nov. 8.
Commodities Recap
Gold prices were on the backfoot on Monday after Federal Reserve Governor Michelle Bowman indicated that additional interest rate hikes would likely be needed to rein in inflation.
Spot gold was down 0.3% at $1,936.44 per ounce by 03:28 p.m. EDT (1928 GMT). U.S. gold futures settled 0.3% lower at $1,970.00.
Oil prices settled down 1% on Monday, after six straight weekly gains, as investors braced for weaker demand from China and the United States, the world's two biggest economies.
Brent crude settled 90 cents, or 1.04% lower, at $85.34 a barrel. U.S. West Texas Intermediate crude settled down 88 cents, or 1.06%, at $81.94 a barrel.