Risk appetite picked up,the US Dollar has been supported as Yields backed up and US futures outperformed. On the other hand, the advent of the August refunding supply left Treasuries heavy, especially in the wake of the debt warnings from the Fitch downgrade. Further erosion in recession outlooks contributed to the rally while the mix of earnings made for choppy upside action. Markets are looking ahead to this week’s US inflation report, after Fed’s Bowman suggested over the weekend that more hikes may be needed. NY Williams also left the door open for more hikes. Overnight we had seen China exports plunge again, which weighed on confidence.
- FX – USD Index is choppy and holds close to 102. EUR and GBP corrected amid weak economic data and as confidence in a soft landing for the US strengthened. EURUSD sideways at 1.10, Cable holds in the downchannel, currently at 1.2765. USDJPY extended 143.45.
- Stocks – The US30 led the way with a 1.16% surge, recovering from 3 straight declines. The US500 advanced 0.90% and the US100 was up 0.61% after 4 consecutive drops on both indexes. #BeyondMeat abandoned its hopes of becoming cash flow positive this year and cut its sales outlook, sending its shares down more than 8% in extended trading.
- Commodities – USOil has corrected from recent highs and is currently settled at $80.90.
- Gold – Ranging within $1930-$1938 area.
Today: FOMC Member Harker speech, Eli Lilly, UPS, Duke Energy earnings on tap.
Biggest Mover: (@6:30 GMT) NZDUSD (-0.76%) broke August lows at 0.6060. Next immediate support levels are set at 0.6050 and 0.6030.
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Andria Pichidi
Market Analyst
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