The rise in US real yields coupled with a strong US Dollar is weighing a lot on Gold. The precious metal can’t even find support from the economic data as we keep getting strong releases that raise the risk of more rate hikes from the Fed. All else being equal, Gold...
Stock Indices Steady as PBOC Reduces its 1-Year Loan Prime Rate to a Record Low
Article by IG Senior Market Analyst Axel RudolphFTSE 100, CAC 40, Nasdaq 100 Charts and AnalysisFTSE 100 stabilises at supportFollowing six consecutive days of falling prices, the FTSE 100 managed to find support between its March and July lows at 7,216 last week...
China’s major state-owned banks reportedly seen mopping up offshore yuan liquidity today
This continues from last week's developments here:As concerns surrounding China's economic prospects grow deeper, so is the pressure on the yuan currency. That continued today as well after the PBOC delivered a less-than-convincing rate cut. And as mentioned at the...
Are equities straying offside today?
It is definitely some hopeful optimism but as we learned last week, the early gains definitely do not mean much. There was some modest dip buying on Friday that helped to salvage a poor start in Wall Street. That seems to be continuing here but I would still reserve...
Dow Jones Technical Analysis – The fakeout might be a big bearish sign
The Dow Jones selloff has been remarkable with key levels being breached with no hesitation as the sentiment turned negative. The reason for the selloff is unclear as the US data has been supporting the soft-landing narrative but the sharp slowdown in the Chinese...
UBS cuts China 2023 GDP growth forecast again, now to 4.8% from 5.2% previously
And they likely won't be the only ones revising lower the growth outlook for the Chinese economy. Things are certainly not looking good in China and the lack of fiscal support is really not helping I would say. Even the rate cut today is failing to convince domestic...
SNB total sight deposits w.e. 18 August CHF 476.2 bn vs CHF 484.8 bn prior
> SNB total sight deposits w.e. 18 August CHF 476.2 bn vs CHF 484.8 bn prior Latest data released by the SNB - 21 August 2023 <!--> Justin Low Monday, 21/08/2023 | 08:00 GMT-0 21/08/2023 | 08:00 GMT-0 --> <!--> Domestic sight deposits CHF 466.4 bn vs...
Market Update – 21 August – PBOC disappoints, markets quiet
APAC stocks traded mixed as the disappointment from China’s decision on its Loan Prime Rates overshadowed its recent support efforts; Hong Kong underperformed. PBOC opted for a narrower-than-expected cut to the 1-year LPR alongside a surprise hold on the 5-year LPR,...
Market Outlook for the Week of 21 – 25 August
On Tuesday, the BoJ Core CPI y/y data is expected in Japan, providing insights into the nation's core inflation dynamics. Meanwhile, in the United States, attention will be on the release of Existing Home Sales data and the Richmond Manufacturing Index.Moving to...
Russell 2000 Technical Analysis – Watch these key levels
The Russell 2000 selloff has been remarkable with key levels being breached with no hesitation as the sentiment turned negative. The reason for the selloff is unclear as the US data has been supporting the soft-landing narrative but the sharp slowdown in the Chinese...
Japan MOF raises assumed long-term interest rate for the coming fiscal year
The assumed long-term interest rate for the fiscal year 2024/25 was previously at a record low of 1.1% but that has now been tweaked to 1.5%. The report says that the revision higher is due to rising yields after the BOJ's latest policy tweak last month. This does...
FX option expiries for 21 August 10am New York cut
There is just one to take note of for the day, as highlighted in bold.That being for EUR/USD at the 1.0900 mark, which could help to limit any major upside push in the session ahead. There is a bit more of a lackluster mood right now, so the large expiries should also...
S&P 500 Technical Analysis – Key support in sight
The S&P 500 selloff has been remarkable with key levels being breached with no hesitation as the sentiment turned negative. The reason for the selloff is unclear as the US data has been supporting the soft-landing narrative but the sharp slowdown in the Chinese...
Germany July PPI -1.1% vs -0.2% m/m expected
Prior -0.3%The big chunk of the decline continues to be energy-driven with energy prices having fallen by 2.5% compared to June. The good news at least is that if you strip that out, producer prices were also still seen down 0.4% on the month. That should eventually...
The bond market still in the spotlight at the moment
10-year yields in the US are up over 5 bps on the day now to 4.30% again, testing the key level as it did last week. That is where we saw the selling on Friday stall but it looks like sellers are quick to resume the momentum again this week. 30-year yields are also...
Not much on the agenda in Europe today
The sort of lull in European morning trade looks set to carry over to the new week and a lack of key economic data releases today won't help much with the mood. Major currencies and general equities sentiment remain rather tentative and that is setting up for a bit of...
Major currencies not up to much to start the new week
The dollar is keeping steadier after a decent advance last week, though there isn't much appetite so far today yet. The Chinese central bank trimmed its benchmark lending rate but markets were expecting more and so that is weighing regional equities at the moment. The...
Higher US Treasury yields have brought the market back closer to what the Fed is thinking
Remarks from Deutsche Bank Securities economists on higher yields, saying the Federal Reserve will welcome these due to how strong the US economy is given recent data and GDP projections. Main points: Higher yields will serve to tighten financial conditions and...
Barclays says there is space for higher US yields, questions if Fed policy “is even tight”
Barclays on US Treasuries, say that despite the selloff already that have pushed 10- and 30-year yields to their highest levels since 2007 and 2011 "yields are not stretched".Higher rates are being driven by:data showing a resilient U.S. economyAtlanta Fed's GDPNow...
JP Morgan on the Federal Reserve – slow path of rate cuts likely to begin in Spring 2024
Dow Jones / Market Watch carry remarks from chief global strategist at J.P. Morgan Asset Management Kelly who says the economy in the US doing very well right now and that inflation "can absolutely come down without a recession." On his rate cut outlook, not this...