Market News Today – USD holds at pivot point & struggles for direction. (USDIndex 92.00). Equities close at ATH again (USA500 +0.82% 4423) – strong factory orders & signs of increase in vaccination rates in some key states. Asian markets at 1-wk highs, Yields lead – down again; 10yr 1.175% close. Overnight – NZD rallies on expectations of rate hikes from August & good jobs data (Unemployment down to 4.0%). Strong Chinese Services PMI (54.9 vs 50.3 last month). Gold moves up to $1813, USOil dumps again (missile incident off UAE coast, Iran, UK & US involved) back to $70.00.
European Open – DAX & FTSE 100 futures slightly higher, US futures little changed after a mixed session in Asia overnight, where Japanese bourses underperformed. September 10-yr Bund yield is up 4 ticks, US futures also fractionally higher, with cash yields still at very low levels. Japan’s 10-yr hit zero overnight & the German rate closed at -0.48% yesterday, despite more signs that the current wave of virus infections won’t derail the recovery in Europe thanks to a successful vaccination campaign. The ECB may have strengthened the dovish language on rates, but is likely to revisit the tapering debate after the summer & Fedspeak from Clarida today will also be scrutinised for hawkish comments.
Today – Final UK & EZ Services PMIs, US ISM non-manu. PMI, ADP employment & remarks from Fed Vice Chair Clarida. Earnings: Commerzbank, Intesa Sanpaolo; Legal & General; General Motors, Kraft Heinz, Uber
Biggest FX Mover @ (06:30 GMT) NZDJPY (+0.71%) Big move ahead of expectations of 0.25% rate hikes August, Sept & October by RBNZ. Has moved up from 76.00 low yesterday, to breach 77.00 and the 20-day MA today. Faster MA’s aligned higher, MACD signal line & histogram over 0 significantly and moving higher, RS 68 and still rising. H1 ATR 0.125, Daily ATR 0.760.
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Stuart Cowell
Head Market Analyst
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