Posted at 25 August 2023 / Categories Market Roundups
Market Roundup
•US Indexes: Dow up 0.7%, S&P 500 up 0.7%, Nasdaq up 0.9%
•Canada Wholesale Sales (MoM) 1.4%,-2.8% previous
•Belgium Aug NBB Business Climate -14.9, -13.5 forecast,-14.8 previous
•US Aug Michigan Inflation Expectations 3.5%,3.3% forecast,3.4% previous
•US Aug Michigan Consumer Expectations 65.5,67.3 forecast,68.3 previous
•US Aug Michigan Current Conditions 75.7,77.4 forecast,76.6 previous
•US Aug Michigan Consumer Sentiment 69.5,71.2 forecast,71.6 previous
•US Aug Michigan 5-Year Inflation Expectations 3.0%,2.9% forecast,3.0% previous
•Canada Jun Budget Balance (YoY) 3.62B,1.52B previous
•Canada Jun Budget Balance 2.11B,-5.30B forecast,3.30B previous
•U.S. Baker Hughes Oil Rig Count 512,520 previous
•U.S. Baker Hughes Total Rig Count 632,642 previous
Looking Ahead Economic Data(GMT)
•No Data Ahead
Looking Ahead Events And Other Releases (GMT)
• 12:00 US Jackson Hole Symposium
•16:25 BoE MPC Member Broadbent Speaks
Currency Summaries
EUR/USD: The euro dipped on Friday as dollar strengthened after Federal Reserve Chair Jerome Powell said the Fed may need to raise interest rates further to ensure inflation is contained.The common currency also came under pressure as ECB policymakers are increasingly worried about weakening growth prospects and, while the debate is still open, momentum for a pause in its interest rate increases is building, Reuters reported, citing eight sources with direct knowledge of the discussion.The euro was 0.01% lower against the dollar at $1.08085. Immediate resistance can be seen at 1.0841(38.2%fib), an upside break can trigger rise towards 1.0857(5DMA).On the downside, immediate support is seen at 1.0767(Daily low), a break below could take the pair towards 1.0762(61.8%fib).
GBP/USD: The British pound dropped to a 10-week low on Friday as investors rein in expectations of where they think the Bank of England's interest rate might peak after recent soft activity data.S&P Global's flash purchasing managers' index (PMI) for August, released on Wednesday, showed business activity contracted, indicating the UK economy was on course to shrink in the third quarter and prompting markets to scale back tightening bets. The pound was 0.03% lower at $1.2597, its lowest since June 13.Immediate resistance can be seen at 1.2658(Daily high), an upside break can trigger rise towards 1.2677(38.2%fib).On the downside, immediate support is seen at 1.2548 (50%fib), a break below could take the pair towards 1.2415(61.8%fib).
USD/CAD: The Canadian dollar weakened to a near three-month low against its U.S. counterpart on Friday as investors struggled to find positive factors to bolster the currency in the face of broad-based gains for the greenback. Adding to pressure on the Canadian dollar was recent strength for the U.S. dollar. The greenback rose on Friday against a basket of major currencies after Federal Reserve Chair Jerome Powell said the Fed may need to raise interest rates further to ensure inflation is contained. The loonie was trading 0.3% lower at 1.3615 to the greenback, or 73.45 U.S. cents, after touching its weakest intraday level since May 31 at 1.3639.Immediate resistance can be seen at 1.3634 (23.6% fib), an upside break can trigger rise towards 1.3658 (Higher BB).On the downside, immediate support is seen at 1.3560(5DMA), a break below could take the pair towards 1.3547 ( 38.2% fib).
USD/JPY: The dollar strengthened on Friday as yen remained under pressure as traders watched for any signs the Japanese government was ready to intervene to prop up the currency, as it did last year. At the July 27-28 meeting, the BOJ modified its yield curve control (YCC) scheme and allowed interest rates to rise more flexibly, a measure officially targeted to sustain easing but seen by markets as a prelude to dismantling decades of stimulus. Yen also dropped on widening interest rate differentials between the U.S. and Japan, fuelling speculation for government yen-buying intervention. Japan last intervened in the forex market in October. The dollar was up 0.31% against the yen at 146.28. Strong resistance can be seen at 146.73(23.6%fib) an upside break can trigger rise towards 147.48(Higher BB).On the downside, immediate support is seen 145.82(5DMA), a break below could take the pair towards 144.81(38.2%fib).
Equities Recap
European stocks surrendered their initial gains, primarily driven by drops in the technology and financial sectors,while sentiment was hit after Jerome Powell, Chair of the Federal Reserve, emphasized the necessity for additional interest rate increases during the highly anticipated Jackson Hole Symposium.
UK's benchmark FTSE 100 closed up by 0.07 percent, Germany's Dax ended up by 0.07 percent, France’s CAC finished the day up by 0.21 percent.
U.S. stocks ended higher on Friday as investors absorbed remarks from Federal Reserve Chair Jerome Powell. Powell suggested that the U.S. central bank might have to consider additional interest rate hikes to effectively manage and contain inflation.
Dow Jones closed up by 0.73% percent, S&P 500 closed up by 0.67 % percent, Nasdaq settled up by 0.94% percent.
Treasuries Recap
Treasury yields rose on Friday after Federal Reserve Chair Jerome Powell said that the U.S. central bank might have to consider additional interest rate hikes in order to maintain inflation within the 2% target set by policymakers.
The yield on the benchmark 10-year note edged up 1 basis point to 4.245%. The yield on the 30-year bond fell 0.3 basis points to 4.299%.
The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) US5YTIP=RR was last at 2.274%.
Commodities Recap
Gold declined on Friday, putting an end to a four-session run of gains after Federal Reserve Chair Jerome Powell indicated the possibility of additional interest rate hikes.
Spot gold fell 0.4% to $1,910.31 per ounce by 1:44 p.m. EDT (1744 GMT). U.S. gold futures settled 0.4% lower at $1,939.90.
Oil futures gained 1%, reaching a one-week peak as gains were propelled by the sharp rise in U.S. diesel prices, a decrease in the count of active oil rigs, and an incident involving a fire at a refinery in Louisiana.
Brent futures rose $1.12, or 1.3%, to settle at $84.48 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 78 cents, or 1.0%, to settle at $79.83.