Macro News & Events

Stuart Cowell HFM

FX News Today

Yields plunged, sending the bond below the 2% for the first time ever, and a new all-time low at 1.914%. The 10-year dropped to 1.47% and the 2-year tested 1.46%, before rates edged up slightly. This meant investors were willing to lend the government money for three decades for less than the overnight rate.
USDJPY pivots at 106.15, EUR is down to the 111.00 handle after more talk from ECB members of QE and rate cuts at the September meeting. Cable rallied to 1.2150 after good UK retail sales figures, yesterday but has slipped back to 1.2100.
Bank of Mexico cut rates 25 bps to 8.00%. Policy expectations were mixed, hence weakening the peso slightly. This is the first easing in five years.
Better than expected retail sales and productivity data, and a solid earnings beat from Walmart boosted equities. Wall Street pared its gains and fell into the red as the 10-year yield fell below the 1.50% mark, but it bounced and stocks recovered slightly, though an anxious tone prevailed.
Market sentiment remains fragile as data continue to signal downside risks to growth. USOil is trading at $55.20 per barrel recovering from overnight lows under $54.00, Gold holds a bid at the $1520.00 handle.

Charts of the Day – The Wall of Worry

Technician’s Corner

EURUSD: Fell from highs yesterday ay 1.1158 o the 1.1100 handle following comments from ECB’s Rehn’s calling for “impactful and significant” stimulus in a WSJ interview. Today the pivot point sits at 1.1118 with S1 at 1.1080 and R1 at 1.1148. The 20 moving average has dipped to 1.1112 and the 5 period sits at 1.1105.

Main Macro Events Today

Housing Data and Building Permits (USD, GMT 12:30) – Housing starts should rise to a 1.260 mln pace in July, after a dip to 1.253 mln in July. Permits are expected to improve to 1.270 mln in July, after falling to 1.232 mln in June. Overall, starts and permits should show a firm path into Q3, and the Q3 averages are expected of 1.263 mln for starts and 1.295 mln for permits.
Michigan Consumer Sentiment Index (USD, GMT 14:00) – The preliminary August Michigan sentiment reading is forecast at 97.5, up from the final July sentiment at 98.4.

Support and Resistance levels

Author

Stuart Cowell

HFM

With over 25 years experience working for a host of globally recognized organisations in the City of London, Stuart Cowell is a passionate advocate of keeping things simple, doing what is probable and understanding how the news, c

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.