Market Brief: Consolidation ahead of PMI’s

The US dollar held steady after the slightly-less dovish than expected FOMC minutes, although volatility remains subdued ahead of key PMI data from Europe and US and, of course, Jackson Hole Symposium tomorrow.
JPY is the strongest major, NZD and AUD are the weakest.
USD/CNY nudges its way to a fresh high of 7.073, although USD/CNH (the offshore counterpart) remains beneath cycle highs.
Macron said that a no-Brexit deal would be Britain’s fault, adding that Boris Jonson’s demands for a renegotiation were not workable.
Australia’s composite PMI contracted for the first time in 5-months, with services and construction weighing the broader read down. Manufacturing expanded by 51.3 to break a 1-month hiatus within contraction mode (below 50).
Japan’s manufacturing PMI contracted for a 4th consecutive month, up slightly from 49.4 in July. New orders were also weaker.

Matt Simpson, CFTe, MSTA CityIndex

Ahead of the European opening session, Asian stock markets are trading in a mix fashion despite a positive close seen in the key U.S. benchmark stock indices yesterday; both the S&P 500 and Nasdaq 100 have gained by 0.82% and 0.90% respectively.
Market participants now wait for Fed Chair Powell’s speech on Friday, 23 Aug during the Jackson Hole Symposium at 1400 GMT for clues on the Fed’s latest guidance on its monetary policy after yesterday’s release of the previous FOMC minutes that has indicated a diverse set of views from Fed officials.
The underperformer as at today’s Asian mid-session is Hong Kong’s Hang Seng Index where it has shed -0.98%. Key property developer stocks are the main drag on the HSI; Sun Hung Kai Properties and Henderson Land Development have tumbled by -2.15% and -3.74% respectively.
After a dismal performance seen yesterday on Australia’s ASX 200, the Index has managed to recover some lost ground by inching up 0.35% supported by the energy sector through better than expected earnings results from Origin Energy and Santos.
The S&P 500 E-mini futures is showing some profit-taking activities at this juncture where it has inched down by -0.14% in today’s Asia session to print a current intraday low of 2926.
Similar performance can also be seen on the FTSE 100 and German DAX CFD futures; both are showing losses of around -0.40%.

Up next

Germany Markit Manufacturing & Services PMI for Aug out at 0730 GMT
Eurozone Markit Manufacturing & Services PMI for Aug out at 0800 GMT
U.S. Markit Manufacturing & Services PMI for Aug out at 1345 GMT
A weaker than expected PMI data is likely to increase the impetus for ECB and Fed to implement more easing policies.

Author

Matt Simpson, CFTe, MSTA

CityIndex

Matt Simpson is a certified technical analyst who combines charts and fundamentals to generate trading themes.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.