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Market Recap
Overnight, Wall Street closed higher, with the Nasdaq posting gains of +0.6%, the S&P 500 up by +0.4%, and the Dow Jones increasing by +0.1%. U.S. 10-year yields experienced a slight decline, while crude oil prices fell by -1.7% to $71.90 a barrel. In the Forex market, the AUD/USD traded within a 0.6732 to 0.6761 range before settling around 0.6740 ahead of the Asian open.
As the London session progressed, markets remained fairly muted in anticipation of the U.S. payroll revisions and the minutes from the recent FOMC meeting. The antipodes were subdued, with AUD/USD at 0.6743 and NZD/USD at 0.6143. EUR/USD was trading near its lows at 1.1110, while USD/JPY fluctuated outside ranges, reaching a high of 146.23 from lows of 144.945. GBP/USD remained flat at 1.3030.
In the NY morning, confusion regarding the release timing of BLS employment revisions caused a brief spike in the USD, with USD/JPY bouncing from approximately 145.70 to 146.90 as older data was published. AUD/USD dipped to lows of 0.6732, and EUR/USD fell below 1.1100, although these moves were short-lived. The actual payroll data revealed a downward revision of 818,000 jobs over the past year, reducing the monthly average increase to 175,000 from 242,000. Overall, the market’s reaction was limited, with major pairs remaining relatively stable ahead of the London rate set.
The FOMC Minutes indicated that several Fed officials saw the possibility of rate cuts in July, while the majority considered a September cut appropriate. The outlook for inflation showed diminished upside risks, while downside risks to employment had increased, with almost all officials expecting disinflation to persist.
Day Ahead
Today in Europe, we anticipate the release of PMI data. Analysts were surprised by the pullback in the manufacturing index in July, but expectations are for a potential rebound due to increasing real wages. A steady services index would suggest some recovery in the composite index.
In the U.S., Jobless Claims data will offer further insights into the labor market following the subdued employment figures reported in July. Macquarie Strategy indicates that a neutral number could signal another month of decent growth in payrolls for August. Notably, AUD/USD maintained a range between 0.6732 and 0.6761 overnight, with key levels holding firm. Market interest is anticipated around the 0.6780 to 0.6800 region, while demand is expected to support levels ahead of 0.6600.
Economic Data to Watch
- EU – August P. HCOB Eurozone Manufacturing PMI
- EU – August P. HCOB Eurozone Services PMI
- UK – August P. S&P Global UK Manufacturing PMI
- UK – August P. S&P Global UK Services PMI
- EU – ECB Publishes Account of July Rate Decision
- US – July Chicago Fed National Activity Index
- US – August 10 Continuing Claims
- US – August 17 Initial Jobless Claims
- US – August P. S&P Global US Composite PMI
- US – August P. S&P Global US Manufacturing PMI
- US – S&P Global US Services PMI
- EU – August P. Consumer Confidence
- US – July Existing Home Sales m/m
- US – August Kansas City Fed Manufacturing Activity
Disclaimer: The information provided in this daily market update is for informational purposes only and should not be considered as financial advice. Trading Forex and CFDs involves significant risk of loss and may not be suitable for all investors. Past performance is not indicative of future results. CA Markets does not guarantee the accuracy or completeness of the information provided, and we recommend consulting with a qualified financial advisor before making any trading decisions. Users are solely responsible for their own trading activities and decisions.
