Risk sentiment rising

Frank Walbaum

lmportant news this week:

Mon, 03rd Aug, 16:00 CET US ISM Manufacturing PMI.
Wed, 05th Aug 00:45 CET NZ Unemployment Rate.
Fri, 07th AUg 14:30 CET US NFP Report.
Fri, 07th Aug 14:30 CET CA Unemployment Rate.

ISM data in focus as Weaker Dollar supports equities

The new trading week has started on a positive note, with the US Dollar extending its recent weakness while equity markets continue to recover. Today's US ISM Manufacturing PMI will be closely watched, as it could provide fresh direction for the Greenback. Current market positioning suggests that weaker-than-expected data could accelerate Dollar selling, while a stronger reading may offer only limited support as bearish sentiment towards the Dollar remains intact for now.

Equity markets continue to outperform, with the S&P 500 approaching another potential breakout. A move above recent highs could encourage further gains across global indices, including the DAX. Despite the stronger performance in equities, cryptocurrencies remain under pressure. Bitcoin and several major altcoins are struggling to gain momentum, suggesting overall risk appetite is not yet fully aligned with the optimism seen in stock markets. The divergence between equities and crypto will remain an important theme this week.

Market talk

Attention now turns to a busy week of US and Canadian economic data. Today's ISM report may set the tone for FX markets, while Friday's US Non-Farm Payrolls and Canadian employment data are expected to be the week's key events. USDCAD remains particularly interesting, as stronger Canadian employment data combined with continued Dollar weakness could extend the pair's recent downtrend. If US data disappoints again, the Dollar may remain under pressure, while stronger equity markets could continue to benefit from expectations of a more accommodative Federal Reserve.

Tendencies in the markets

Equities positive, USD weak, crypto weak, oil weak, Silver weak, Gold weak.

Author

Frank Walbaum

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.