USDIndex sinks again tanked to 105.75, from 106.80. The US is in a technical recession (2 consecutive quarters of contraction) after Q2 GDP -0.9% & (Q1 -1.6%), and GDP Inflation rose to 8.7% from 8.0%) but Unemployment remains very low and job creation (Claims fell to 256K from 261k) and wage growth are strong. US Stocks rallied another 1%+ on expectations of slower rate hikes. AMZN +1.08% & APPL+0.36%, both beat Earnings after hours, shares were up 3% & 12%, respectively. Meta -5.2% & QCOM -4.54%. Asian markets mixed (Hang Seng -2.02%, Nikkei -0.03%). European FUTS higher. Yields continue to see-saw, today -1.94%, Oil under $97, Gold breached $1760 and BTC moved up to $24k.
Biden & Xi meeting skirted Taiwan talk, Ukrainian forces plan counterattacks in the South, Russia shells Kiev.
- USDIndex weakens further to 105.45 now. YEN outperforms again in Asian session.
- Equities – USA500 closed higher +48.8 pts (+1.21%) (4072), US500FUTS at 4105 now. Bears being squeezed, 10 days north of 20-day MA. 4175 next key resistance
- Yields 10-year yield dived into close 2.681%, down again to 2.67% now.
- Oil – peaked at $99.80 yesterday down to test $96.00 before recovering to $97.00 now.
- Gold – breached & broke key 20-day MA ($1745) and $1750. Trades at $1765 now.
- Bitcoin also rallied on weaker USD to trade at $24.1K now.
- FX Markets – EURUSD rallied to test 1.0250 on EZ news, USDJPY dived 1% under 133.00 to 132.75. Cable broke 1.2200 and trades at 1.2225.
Overnight – JPY Tokyo Inflation hotter, Retail Sales, Housing Starts & Consumer Confidence weaker, AUD PPI inline, French GDP better, German Import Prices in line.
Today – German Flash GDP & Unemployment, EZ Flash CPI and Flash Q2 GDP, US Jun PCE, US Chicago PMI, Canadian GDP.
Biggest FX Mover @ (06:30 GMT) USDJPY (-1.13%). Breached key technical level at 133.00 today and tests 132.50. MAs aligned lower, MACD histogram negative & falling, RSI 19.77, OS & falling, H1 ATR 0.365, Daily ATR 1.230.
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Stuart Cowell
Head Market Analyst
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