Previous Trading Day’s Events (18.07.2024)
The jobless rate still edged up to 4.1%, from 4.0%, compared to forecasts of a steady outcome. The participation rate rose to near an all-time high at 66.9%, while hours worked bounced 0.8% as fewer workers than usual took holidays in the month.
“The labour market is slackening, with the upward drift in the unemployment rate becoming more entrenched. But the market remains in a very tight position,” said Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia.
“The current pace of employment growth suggests demand is resilient and cost pressures will remain. We think the RBA will stay the course and keep rates on hold, but August is certainly a live meeting.”
The RBA has held interest rates steady for five straight meetings now, but policymakers were pondering whether the current policy rate of 4.35% is restrictive enough as inflation remained high at 4% in the last quarter, above its target band of 2-3%.
The ECB cut rates from record highs last month and the bank is proving more cautious about a follow-up step.
“We would conclude that a September cut remains firmly on the agenda,” JPMorgan economist Greg Fuzesi said.
Lagarde said growth was likely to have slowed in the second quarter and that investment activity along with poor industrial output point to muted expansion ahead. The comments reinforce expectations that weak activity will continue to suppress price pressures in the economy, allowing the ECB to cut rates further, perhaps once a quarter.
“So the question of September and what we do in September is wide open,” said Lagarde, who also chose not to repeat a comment she made after June’s rate cut that there was now a “strong likelihood” the dialling back of monetary policy was underway.
The September meeting will come at around the time that markets also see the U.S. Federal Reserve cutting. Markets are pricing in almost two ECB rate cuts for the rest of the year and a little more than five moves by the end of next year, a view no policymaker has openly challenged for weeks.
______________________________________________________________________
Winners vs Losers
USDCAD is on the top of the list with 0.48% gains this week. Metals have moved away from the top as they experience significant retreats. Gold still remains in the lead for the month with 3.87% gains. The USD also recovered moderately yesterday.
______________________________________________________________________
News Reports Monitor – Previous Trading Day (18.07.2024)
Server Time / Timezone EEST (UTC+03:00)
- Midnight – Night Session (Asian)
At 4:30, Australia’s employment change figure was reported higher than expected while the unemployment rate ticked up as expected. The AUD appreciated for a short period of time before the effect faded. AUDUSD jumped just 16 pips before retracing back to the mean.
- Morning – Day Session (European and N. American Session)
At 9:00 the reports for the labour market condition in the U.K. showed that this month’s labour market figures continue to show signs of gradual cooling. The claimant count change was reported as higher than expected and average earnings figures lowered. Recent months saw decreases in estimates of employment from the Labour Force Survey (LFS) and increases in estimates of payrolled employees from HMRC’s Real Time Information (RTI) data. The GBP initially was not affected by the news but soon it started to depreciate. GBPUSD dropped sharply and with volatile movements downwards after the news.
At 15:15 the ECB decided to leave rates unchanged. The latest data has pointed to weaker growth and lower headline inflation but still sluggish core and services inflation. Wage measures show high growth that points to rather elevated rates for now. There was no significant impact on the market at the time of the release.
Unemployment claims were released later at 15:30 and reported way higher than expected. However, the market has not reacted to the news with a shock. The USD moved rather steadily to the upside soon after the news release.
General Verdict:
__________________________________________________________________
FOREX MARKETS MONITOR
EURUSD (18.07.2024) 15m Chart Summary
Server Time / Timezone EEST (UTC+03:00)
Price Movement
The pair was moving steadily downwards with low volatility until the ECB rate decision release. At the time of the release at 15:15, there was no special impact on the market. Later after 15:30 when the U.S. unemployment claim figure was released, the USD started to show appreciation causing the pair to drop with occasional retracements along the way down. No intraday retracement took place.
___________________________________________________________________
CRYPTO MARKETS MONITOR
BTCUSD (Bitcoin) Chart Summary 1H
Server Time / Timezone EEST (UTC+03:00)
Price Movement
On the 16th the price reached a strong resistance at 65K USD before retracing to the 30-period MA. It actually moved downwards and crossed the MA on its way down signalling the potential stop of the uptrend. The RSI is bearish. The price broke the 63K USD support and headed towards the 62K USD. However, it found support at near 62,500 USD and reversed continuing with the uptrend. It reached 66K USD on the 17th and reversed to the MA. On the 18th it broke intraday lows as expected and reached the level near 63K USD as per our forecast in our previous analysis. The mean level now seems to be near 64K USD where the price settled and is on the MA.
Crypto sorted by Highest Market Cap:
Since June this year, the market has been suffering with most Crypto marking huge losses as it was not improving in July as well. After mid-July we see a huge comeback with a steady improvement. Will it be sustained? Currently, the market is signalling a slowdown but remains resilient, against the downside.
https://www.investing.com/crypto/currencies
______________________________________________________________________
EQUITY MARKETS MONITOR
S&P500 (SPX500) 4-Day Chart Summary
Server Time / Timezone EEST (UTC+03:00)
Price Movement
On the 15th the index closed higher after experiencing volatility and managed to form an upward wedge formation. On the 17th of July, we finally saw a breakout to the downside reaching 5,620 USD as per our forecast in our previous analysis. It, however, continued with the downside until it reached the support near 5,590 USD before it retraced moving upwards back to the 30-period MA. On the 18th there was another breakout after the stock exchange opening that caused a sharp drop to the 5,530 USD before an intraday retracement took place. The Fibo levels show that the 161.8 Fibo is reached and that is acting as a strong support at the moment that could be the next turning point for the index. We need more evidence from the RSI though that the market is turning bullish.
______________________________________________________________________
COMMODITIES MARKETS MONITOR
USOIL (WTI) 4-Day Chart Summary
Server Time / Timezone EEST (UTC+03:00)
Price Movement
On the 16th the price reached the support at near 79.30 USD/b and a reversal took place soon after. The price settled near 80 USD/b for a while. On the 17th Crude oil experienced a jump to the upside crossing the 30-period MA on its way up. After reaching the resistance at near 82.25 USD/b it retraced and reached the 61.8 Fibo level at near 81.30 USD/b. This rapid retracement forced the price to cross the MA on the 18th and reach the resistance area near 80.5 USD/b. It retraced back to the upside after that with another crossover but soon reversed again to the downside. It settled again near the 80.5 USD/b mean for now but remains below the MA indicating future downside movement.
XAUUSD (Gold) 4-Day Chart Summary
Server Time / Timezone EEST (UTC+03:00)
Price Movement
On the 12th the price continued with retracement after the previous day’s peak. When it touched the 30-period MA it reversed to the upside to continue with a sideways path. A triangle formation was apparent as we mentioned in our previous analysis and a breakout to the upside led to the price reaching the resistance near 2,440 USD/oz. It broke that resistance on the 16th of July and moved further upwards. A triangle formation was apparent recently as depicted on the chart. On the 18th that triangle was broken to the downside and Gold’s price dropped sharply, still moving downwards till today.
______________________________________________________________
News Reports Monitor – Today Trading Day (19.07.2024)
Server Time / Timezone EEST (UTC+03:00)
- Midnight – Night Session (Asian)
No important news announcements, no special scheduled figure releases.
- Morning – Day Session (European and N. American Session)
At 9:00 the U.K. retail sales volumes (quantity bought) are estimated to have fallen by 1.2% in June 2024, following a rise of 2.9% in May 2024. Sales volumes fell across most sectors. Looking at the quarter, sales volumes fell by 0.1% in Quarter 2 (Apr to June) 2024, when compared with Quarter 1 2024, and fell by 0.2%, when compared with Quarter 2 2023. The GBP depreciated at that time but only for some time as the effect soon faded. The GBPUSD however is moving downwards steadily despite the low volatility. This is the second trading day that the pair is moving steadily to the downside.
The Canada retail sales report is taking place the same day and is also expected to show reductions. CAD pairs could be affected by a moderate shock. Another deterioration is expected in Canada’s business conditions as suggested by the expected figures. A surprise to the upside can be excluded since the employment change figure reported recently was actually a decline indicating much weakness.
General Verdict:
______________________________________________________________
