- USDIndex – Remains bid and back to test 109.60. Data released yesterday was mixed (positive Retail Sales and Claims, mixed Trade data and Manufacturing from Empire State & Philly Fed) but solid enough not to dissuade the Fed. A 75 bp boost is a done deal on Wednesday, with the risk for a 100 bp hike now 24%. And the Fed is likely to increase rates over the rest of the year to hit a 4.04% upper band in December and peak at 4.4% early 2023. In January the 10-yr yield was 1.77%, closed yesterday at 3.459%, just shy of June’s 3.47% high.
- EUR – Trades at 0.9978 now and remains capped by Parity 1.0000 resistance.
- JPY – More intervention chatter, Suzuki: concerned about one-sided yen weakening. USDJPY back to 143.60, 145.00 remains vital resistance.
- GBP broke below key 1.1500 support zone, 1.1420 now, as Retail Sales disappoint adding to the cost of living crisis.
- Stocks US stocks moved lower and remain pressured after Tuesdays bloodbath.(S&P500 -1.13% -44.66pts 3901) FUTS trade below key 3900 at 3892. Adobe -17%, MFST -2.70%, NFLX +5.02%. NASDAQ worst performer (-1.43%). Asian stock markets also sank (Nikkei -1.11% & Shanghai Comp. -1.97%) – Chinese property sector remains weak but strong Retails Sales and key August indicators were better-than-expected. European FUTS lower, FTSE100 FUTS – a tad higher on weaker sterling.
- USOil plunged over 4% to $84.35 lows, from a test of $90.00 on Wednesday. Trades at $85.40 now.
- Gold – also plunged below key support areas at $1688 and $1680, to $1658 (April 2020 lows) now.
- BTC – slumped to $19.4k and trades at $19.7k now. Ethereum PARIS Merge successful yesterday but he coin lost -5% and trades at $1468 today.
Overnight & Today – EU Final CPI, UoM Consumer Sentiment & Inflation Expectations, Quadruple Witching, Speeches from ECB’s Lagarde & Villeroy.
Biggest FX Mover @ (06:30 GMT) GBPUSD (-0.46%) Weak UK Retail Sales adds to Sterling’s woes. Sank under vital 1.1500 yesterday to 1.1418 now. MAs aligning lower, MACD histogram & signal line negative & falling, RSI 27.50 & OS, H1 ATR 0.00158, Daily ATR 0.01188.
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Stuart Cowell
Head Market Analyst
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