Market Watch for Today

Market Overview

U.S. data releases pushed metals down and the dollar up ahead of major releases coming later today on New Home sales and tomorrow with Final GDP y/y, Unemployment Claims, and Pending Home Sales, alongside other medium-impact data.         

CB Consumer Confidence released with 100.4 confidence, higher than expected 100 but lower than previous at 101.3. 

The US Apr S&P CoreLogic composite-20 home price index eased to +7.20% y/y from +7.46% y/y in March, stronger than expectations of +7.00% y/y.

The US June Richmond Fed manufacturing survey fell -10 to -10, weaker than expectations of -3.

Hawkish comments today from Fed Governor Bowman boosted the dollar when she said she sees a number of upside risks to the inflation outlook, and “we are still not yet at the point where it is appropriate to lower the policy rate.” Also, stronger-than-expected US home prices and consumer confidence reports were hawkish for Fed policy and bullish for the dollar. The dollar fell back from its best levels Tuesday after Fed Governor Cook said it would be appropriate for the Fed to reduce interest rates “at some point.”

Fed Governor Bowman said she sees a number of upside risks to the inflation outlook, and “we are still not yet at the point where it is appropriate to lower the policy rate.” She added that she “doesn't see any rate cuts by the Fed this year and shifted her outlook for rate cuts to 2025.”

This report on Gov Bowmans comments regarding rate cuts pulled Metals prices down. 

Fed Governor Cook said it will be appropriate for the Fed to reduce interest rates “at some point,” but “the timing of any such adjustment will depend on how economic data evolve and what they imply for the economic outlook and balance of risks.”

The markets are discounting the chances for a -25 bp rate cut at 10% for the July 30-31 FOMC meeting and 65% for the following meeting on Sep 17-18.

On Tuesday, traders of futures contracts tied to the Fed's policy rate were betting on two 25 basis point rate cuts this year, with a first cut in September seen as having a 61% probability.

GOLD- Gold prices remain above 2314.890, maintaining bullish potential despite uncertainty due to upcoming U.S. data releases. The FED's comments about delaying rate cuts to 2025 have added complexity, with metals prices reacting accordingly. A decisive break above 2365.443 or below 2295.536 will indicate the next move, with potential targets at 2431.705. Investors are cautious, awaiting further developments.

SILVER- Silver has fallen below 29.018, trading comfortably under this level ahead of significant U.S. data releases today and tomorrow. Estate data, Final GDP, and Unemployment claims will be key in determining the direction for Silver and Gold prices.

DXY- The Dollar index found strength following comments from FED officials, hovering near 105.840. The market awaits further price movement to determine the overall trend. A break above this level may indicate a continuation on the upside and a shift in the overall trend, but current price action shows resistance at this level.

GBPUSD- The Pound remains below 1.27006 with minimal movement after yesterday‘s trading session. BOE Governor Bailey’s speech tomorrow could impact GBPUSD, potentially breaking it out of its current range. Despite strong dollar pricing, the Pound has maintained its level against the dollar.

AUDUSD- The Australian Dollar remains bullish, creating new higher lows but is constrained around the 0.66541 level. The market is waiting to see how prices will move out of consolidation.

NZDUSD- The New Zealand Dollar shows no significant movement, trading within the range of 0.61408 and 0.60954. Further confirmation is needed to determine the next direction.

EURUSD- The Euro has fallen slightly below 1.07240, finding resistance at the downtrend line. Stronger dollar prospects, influenced by FED official Bowmans comments on delaying rate cuts, may push prices down further. We await further confirmation.

USDJPY- The Yen remains steady against the dollar, with prices nearing the 160 level, raising fears of BoJ intervention. We remain cautious with the Yen, awaiting a decisive move.

USDCHF- The Swiss Franc is showing higher highs and lows above 0.88886 against the dollar. We are close to shifting our bias but currently await further price confirmations as it remains within its range.

USDCAD - The Canadian Dollar has strengthened against the dollar, with prices nearing a fall below 1.36563. Recent inflation data exceeding expectations has reduced market expectations for a Bank of Canada rate cut, enhancing confidence in the CAD. Our bias is bullish for the Canadian Dollar.