Market News Today – USD holds at pivot point and struggles for direction. (USDIndex 92.00). Equities close at ATH again (USA500 +0.82% 4423) – strong factory orders and signs of increase in vaccination rates in some key states. Asian markets at 1-week highs Yields lead – down again; 10yr 1.175% close. Overnight – NZD rallies on expectations of rate hikes from August and 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 and FTSE 100 futures are slightly higher, US futures little changed, after a mixed session in Asia overnight, where Japanese bourses underperformed. The September 10-year Bund yield is up 4 ticks, U.S. futures also fractionally higher, with cash yields still at very low levels. Japan’s 10-year hit zero overnight and 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 it likely to revisit the tapering debate after the summer and 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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