Market Brief: Risk Sentiment Continues To Improve

Japanese exports declined for an 8th successive month, falling -1.6% YoY compared with -2.2% expected. China-bound shipments of car parts was the main drag on the headline figure, and exports to China declined by -9.3% YoY. Separately, a Reuters Tankan survey showed manufactures were pessimistic for the fort time in 6 years as the trade war continues to bite.
New Zealand producer prices rebounded in Q2 by 0.5% QoQ, up from -0.5% prior. Input prices also improved and hit 0.3% QoQ versus -0.9% prior.
Narrow ranges across the FX space with all monitored pairs remaining well within their typical daily ranges. GBP and AUD are currently the strongest majors, CHF and CAD are the weakest.
NZD/USD edged its way to an 8-day low (when RBNZ cut by 50bps) and is the only major to break Friday’s range. USD/CHF is testing resistance around 0.98, gold is consolidating around $1509, Silver has touched a 3-day low.

Matt Simpson, CFTe, MSTA CityIndex

The Asian stock markets have reacted more positively towards the interest rate reforms plan proposed by China central bank, PBOC over the weekend where all of them have gained as at today’s Asian mid-session
The top performers are Hong Kong’s Hang Seng Index and China A50 which have rallied by 1.87% and 1.08% respectively. The on-going rally seen in the Hang Seng Index has also been supported by a peaceful large-scale protest event held yesterday in contrast with previous mass protest demonstrations that have been chaotic with clashes between the police and protesters.
The S&P 500 E-mini futures has traded up by 0.60% in today’s Asia session to print a current intraday high of 2903 after a positive close of 1.14% seen on last Fri, 16 Aug U.S. session.
The FTSE 100 and German DAX CFD futures are trading with modest gains as well at this juncture; up by 0.50% and 0.45% respectively.

Up Next:

A quiet session awaits, with the main data including final CPI reads for Europe. In fact data this week is quite sparse ahead of the Jackson Hole Symposium over the weekend, here the main topic is “challenges for Monetary Policy”.
U.S. Commerce Department’s announcement on whether to extend the existing permit in place for U.S. firms to conduct business dealings with China’s Huawei Technologies.

Macroeconomic Calendar

Author

Matt Simpson, CFTe, MSTA

CityIndex

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

EUR/USD climbs to two-week highs beyond 1.1900

EUR/USD is keeping its foot on the gas at the start of the week, reclaiming the 1.1900 barrier and above on Monday. The US Dollar remains on the back foot, with traders reluctant to step in ahead of Wednesday’s key January jobs report, allowing the pair to extend its upward grind for now.

GBP/USD hits three-day peaks, targets 1.3700

GBP/USD is clocking decent gains at the start of the week, advancing to three-day highs near 1.3670 and building on Friday’s solid performance. The better tone in the British Pound comes on the back of the intense sekk-off in the Greenback and despite re-emerging signs of a fresh government crisis in the UK.

Gold treads water arpimd $5,000

Gold builds on the gains it posted to end the previous week and holds steady above $5,000 on Monday. Data released over the weekend showed that the People's Bank of China extended its Gold buying spree for a 15th month in January. Moreover, dovish US Fed expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.

Crypto Today: Bitcoin steadies around $70,000, Ethereum and XRP remain under pressure

Bitcoin hovers around $70,000, up near 15% from last week's low of $60,000 despite low retail demand. Ethereum delicately holds $2,000 support as weak technicals weigh amid declining futures Open Interest. XRP seeks support above $1.40 after facing rejection at $1.54 during the previous week's sharp rebound.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.