The Market Week – August into September
Another volatile week to start the month; USD remains pressured at three-week lows as economic data reports remain mixed, Equities hit all-time highs again supported by strong earnings and US treasuries hold onto gains even as yields recover. All eyes now on the OPEC meeting (today) and NFP Jobs data (Friday).
It’s NFP week so jobs, earnings and unemployment take centre stage. The weekly US unemployment claims missed expectations again, coming in at 353,000, with 342,000 expected this week. NFP is expected to be around 750,000 and unemployment to drop to 5.2%. Although the data continues to trend lower overall, it is a very choppy ride for the long term unemployed.
The vaccine rollouts continue to drive sentiment, but the Delta variant remains a significant concern. A surge of cases in the US and parts of Asia continue to weigh. Over 5.29 billion doses of vaccines have been administered globally but many low-income countries continue to have less than 5% vaccination rates.
This week FX volatility was evident again. The USDIndex slipped to 92.35 but holds 92.00, and EURUSD tested up to 1.1845 from 1.1750 lows, while USDJPY rotates over 110.00, testing 110.50. Cable rallied from below 1.3700, spiked over 1.3800 before settling back to 1.3750.
US stock markets posted more new all-time highs and continue to consolidate at highs on the back of the strong Q2 Earnings Season. September, particularly the second half, can be very volatile for equities. However, the USA500 now holds over 4,500, the USA30 continues to test 35,500 and the USA100 tests over 15,600.
The Gold price moved up this week as the USD remained pressured and US Treasuries in demand. The price breached $1800, posting highs at $1823 and lows at $1775. The 20-day moving average is up to $1796.
USOil prices had a volatile week, as Hurricane Ida hit the US SW and the OPEC meeting today loomed. A rally to $69.00 has retraced to $68.20 ahead of news from Vienna and inventories also later today but remains supported by the 20-day moving average at $67.60.
The yield on the US 10-Year Treasury Note remains very much in focus. A weekly high of 1.3610% on Thursday declined to under 1.28% but recovered 1.30% to close the month ahead of the NFP data on Friday.
Click here to access our Economic Calendar
Stuart Cowell
Head Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
