Daily Broad Market Recap – July 8, 2024

Dollar dominance was the name of the game on Monday as riskier assets like gold and crude oil took major hits.

What’s moving the markets these days?

Here are the updates you need to know:

headlines:

• French early elections It ended with a hung parliament between three opposition parties.
• Japan’s average cash earnings rose 1.9% in June from 1.6% on-year, versus an expected gain of 2.1%.
• Japan Economy Watchers Sentiment Index in June: 47.0 (46.1 expected, 45.2 previously)
• People’s Bank of China refrains from buying gold For another consecutive month
• Germany’s trade surplus rose from €22.1 billion to €24.9 billion as imports (-8.7% y/y) fell faster than exports (-1.6% y/y) in May.
• Eurozone Sentix Investor Confidence Index July: -7.3 (-0.6 expected, +0.3 previously)
• Bank of England Monetary Policy Committee Member Haskell He said prices should remain unchanged again in August for “inflation to subside sustainably.”
• US Consumer Credit in June: $11.4B ($9.7B expected, $6.5B previously)
• UK BRC Retail Sales Index June: -0.5% YoY (+0.9% expected, +0.4% previously)
• Westpac Australia Consumer Confidence Index July: -1.1% (+1.7% previously)

Price movement in the broad market:

Monday was light on major data points, but that didn’t stop asset classes from posting big moves across the charts. Commodities in particular saw sharp losses driven by individual catalysts.

Gold prices fell on news that the People’s Bank of China would refrain from buying gold for another straight month in June, while West Texas Intermediate crude oil prices fell as concerns eased over Hurricane Beryl disrupting production in Texas.

Bitcoin also had a rough start but managed to rally thanks to reports that crypto funds recorded inflows for the first time in a month, collecting $441 million last week as investors took advantage of the lower prices.

Forex Market Behavior: US Dollar vs Major Currencies:

Comparison between the US dollar and major currencies Chart by TradingView

The US dollar had a generally positive start, benefiting from some risk-off flows caused by the sudden stalemate in the French early elections.

However, it struggled to find direction for the rest of the day, falling to levels similar to the Canadian dollar, yen and European currencies by midday, before gradually rising during the New York session.

The USD/JPY pair fluctuated significantly as traders appeared to remain nervous about potential intervention in the yen, but eventually recovered to the 161.00 level.

Potential catalysts coming up on the economic calendar:

• NFE Small Business Index at 10:00 AM GMT
• FOMC Member Barr Testifies at 1:15 PM GMT
• Fed Chair Powell Speech On the Semi-Annual Monetary Policy Report in the Senate at 2:00 p.m. GMT
• Treasury Secretary Janet Yellen Testifies at 2:00 PM GMT
• FOMC Member Bowman Speaks at 5:30 PM GMT
• Japan Producer Price Index at 11:50 PM GMT
• China CPI and PPI 1:30 AM GMT (July 10)
• Reserve Bank of New Zealand Monetary Policy Decision 2:00 AM GMT (July 10)

The dollar price action may rise today, as traders prepare for Federal Reserve Chairman Jerome Powell testifies before the Senate Banking Committee. Lawmakers are expected to press him to set a timetable for rate cuts, so be sure to keep your eyes and ears open for any clues on what the US central bank has in store!

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