Market participants appear to have woken up on the right side of the bed this week, as the risk-on mood led to strong gains for stocks and high-yielding currencies on Monday.
How did the rest of the asset classes perform?
Let’s take a look at the latest headlines and market performance:
Headlines:
- The BusinessNZ Services Index rose from 40.7 to 44.6 in July; the employment component rose from 45.7 to 46.6.
- Rightmove: UK property sale prices fell 1.5% month-on-month in August after a 0.4% fall in July
- Japan’s core machinery orders rose 2.1% on-month in June after falling 3.2% in May
- European Central Bank official Rehn He pointed out that the risks of negative growth are the likely reason for the interest rate cut in September.
- CB Leading US Index In July: -0.6% (-0.4% forecast, -0.2% previous)
- New Zealand’s trade balance in July shifted from a NZ$585 million surplus to a NZ$963 million deficit as exports rose 14% and imports rose 8.5%.
- Reserve Bank of Australia Monetary Policy Meeting Minutes He suggested that interest rates could remain stable for a long time.
- Israeli Prime Minister Benjamin Netanyahu had approved the “bridge proposal.” Regarding the ceasefire in Gaza, according to US Secretary of State Antony Blinken
Price movement in the broad market:
Dollar Index, Gold, S&P 500, Oil, 10-Year US Treasury Yield, Bitcoin Chart by TradingView
Most asset classes were swinging like ice cream cones during the Asian trading session, except for Bitcoin and crude oil which posted losses from the start.
The BTC/USD pair dropped to the $58,500 area before moving sideways until the London market hours, where it saw another dip and then rose again for the rest of the day.
On the other hand, crude oil prices fell sharply due to reports of mediation to resolve the conflict between Israel and Hamas, as well as concerns about global demand. As it turns out, the ceasefire talks in the Middle East may be making some progress, which will ease concerns about production in the region.
US stock markets had a much better day, with indices recovering most of the losses they suffered from last week’s collapse, with both the S&P and Nasdaq closing up more than 1%.
Forex Market Behavior: US Dollar vs Major Currencies:
Comparison between the US dollar and major currencies Chart by TradingView
The US dollar fell significantly against major currencies, especially against the Japanese yen, which began to rise during Asian market hours.
Over the weekend, Japan reported a sharp rebound in core machinery orders for June while New Zealand posted a rise in its BusinessNZ services index, sparking a positive start for the NZD as well.
There was little significant data on the agenda in terms of key data points from other major economies, which kept volatility in check during the first half of the London session. The dollar gradually declined for the rest of the day, except against the yen, due to dovish comments from FOMC member Kashkari and increased risk appetite.
Potential catalysts coming up on the economic calendar:
- Swiss Trade Balance at 6:00 am GMT
- German PPI at 6:00 AM GMT
- Speech by the President of the Swiss National Bank, Jordan 9:30 AM GMT
- Canadian Consumer Price Index Numbers 12:30 PM GMT
- FOMC Member Bosic’s Speech 5:35 PM GMT
- FOMC Member Barr’s Speech 6:45 PM GMT
- New Zealand World Dairy Auction Coming
- Japan Trade Balance at 11:50 PM GMT
The Canadian dollar could be in the spotlight today as the economy prepares to print its own money. CPI Readings for July Which is likely to impact the prospects of further easing of monetary policy by the Bank of Canada.
Keep your eyes and ears open. Speeches by two FOMC members (Bostic and Barr) Their comments could still influence market expectations for the Jackson Hole symposium and the Fed’s decision in September.