USDIndex pushed to 20-yr highs over 109.00 (August low 104.5) and pressured EUR (under parity with Energy concerns weighing) & GBP (under 1.1750 with political and energy concerns weighing too). Stocks tanked across the board (NASDAQ -2.55%) and Yields rallied (+1.78%) with the 10yr holding over 3%, and the yield curve still 30+bp inverted. Asian markets followed through too, (Hang Seng -0.81%, Nikkei -1.20%) and European FUTS are lower. Oil gyrated over $4.70, after Saudi Energy minister said they may have to CUT production. Gold down again, holds at $1735 and BTC broke under $21k now.
Overnight – PMIs miss – AUD Services under 50.0 and contracting at 49.6 vs 54.0, JPY Manufacturing 51.0 vs 52.1, BOJ Core CPI, hotter 1.8% vs 1.5%.
Week Ahead – Jackson Hole 25-27, Global PMIs from 23/8, US Durable Goods 24/8, US & German GDP 25/8 & US PCE 26/8. Wednesday (24/8) – 6-mths. since Russia’s invasion of Ukraine.
- USDIndex continued to rally; above late 2002 highs, and trades at 109.15. EUR and GBP weaken as winter energy crisis looms.
- Equities – USA500 closed down 90.50pts (-2.14%) to 4137, US500FUTS at 4122 now Tech leading the decline & Meme stocks in play again (AMC -41.95%, NFLX -6%, Ford -5.04%).
- Yields 10-year yield rallied to 3.037% into close and trade at 3.0165% now. The 2/10yr. yield curve cooled but remains inverted by 29.95 bp.
- Oil – dropped to $86.24, before recovering to $90.95 now, following comments from SA Energy minister.
- Gold – remains under $1750 today at $1736 now, having tested into $1725 support area yesterday.
- Bitcoin pressured and down to $21k now.
- FX Markets – EURUSD down under parity at 0.99040 now. USDJPY rallied to 137.70 earlier and trades at 137.20 now. Cable tanked under 1.1750 and trades at 1.1725 now.
Today – UK & US Flash PMIs, EZ Consumer Confidence, US New Home Sales, Fed Discount Rate Minutes, Speech from ECB’s Panetta.
Biggest FX Mover @ (06:30 GMT) EURJPY (-0.57%). Rejected 138.00 yesterday and under 136.00 now. MAs aligning lower, MACD histogram negative & signal line falling, RSI 23.36 OS & falling, H1 ATR 0.212, Daily ATR 1.37.
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Stuart Cowell
Head Market Analyst
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