Markets wait for direction as commodities send mixed signals

Frank Walbaum

Important News this week

Wed, 26th, 03:30 CET AU Consumer Price Index
Wed, 26th, 14:30 CET US Core PCE Price Index
Thu, 27th US Jackson Hole Symposium Begins
Fri, 28th, 14:30 CET CA Gross Domestic Product

Markets wait for direction as commodities send mixed signals

Markets remain without a clear direction, with the US Dollar moving sideways and investors waiting for fresh catalysts. Equities are also struggling to establish momentum, while Gold and Silver are beginning to correct after their recent gains. The next major impulse could come from today's US data and Nvidia earnings later today.

The Australian Dollar is showing relative strength following stronger-than-expected CPI data. While the stronger inflation reading may reduce expectations for near-term rate cuts from the RBA, the firmer AUD could also provide a small boost to broader risk sentiment. Crypto remains in a waiting pattern around important resistance levels, with Bitcoin and Ethereum yet to confirm another breakout.

The Canadian Dollar is weak across the board, while oil is starting to fall below important support levels. A sustained break lower in crude could add further pressure to CAD and potentially signal weaker risk sentiment, particularly if the move accelerates.

Market talk

Markets are clearly waiting for a catalyst. The Dollar is stuck sideways, metals are correcting and crypto is unable to break higher, while the AUD is providing one of the few positive signals. Today's developments could change that quickly.
Nvidia earnings are likely to be particularly important for the equity and tech markets. A strong result could reignite the risk-on move and help crypto break through resistance. On the other hand, continued weakness in oil and a stronger Dollar could reinforce the current cautious tone. With Jackson Hole starting tomorrow, traders may also be reluctant to make major bets before hearing from central bankers.

Tendencies in the markets

Equities mixed, USD sideways, BTC positive, ETH positive, oil lower, metals correcting, JPY weak.

Author

Frank Walbaum

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.