The Dollar remains the largest currency in the market today. The Yen and Swiss Franc are not very good, as supported by lower sentiment. But the Canadian Dollar has remained stable, awaiting the BoC’s decision on whether to grant a jumbo rate hike. The Aussie and the Euro are the worst at the moment, while Sterling is a week away. All three previously broke lows against the greenback.
Technically, the CAD / JPY needs to be watched for the coming days. The price action from m107.19 is fairly straightforward as the cross is supported comfortably above the 55 day EMA. He finds it much better to follow the USD/JPY for an upside breakout. A break of 107.19 will extend the trend further to 110 positions.
In Asia, the Nikkei fell -1.77%. Hong Kong’s HSI was down -1.12%. China Shanghai SSE was down -0.95%. The Singapore Strait Times rose 0.11%. Japan’s 10 -year JGB yield was down -0.0007 by 0.249. Overnight, the DOW was down -0.52%. The S&P 500 fell -1.15%. The NASDAQ fell -2.26%. The 10 -year yield fell -0.011 to 2.991.
Fed Bostic supports a further 75bps hike in July
Atlanta Fed President Raphael Bostic said yesterday, “The data that has come out in recent months really points to the need for us to move quickly closer to that independence.”
“I am confident that the industry will be able to withstand this next move. I will support the increase in the number 75 basis,” he added.
Outside of July, decisions will rely on economic data. “If the demand is faster than we expected and the supply comes back, I’ll be happy to pull it off” the cost will go up, Bostic said.
St. Paul said separately. Louis Federal Reserve, James Bullard, “right now inflation is high, but the question is, can we go back to 2% without hurting the economy? I think we can.”
Australian retailer Westpac fell to 83.8, compared with previous major shocks.
The Australian Westpac Consumer Sentiment Index fell from 86.4 to 83.8 in July. Confidence has fallen monthly this year, and is currently -19.7% below the December level.
Westpac said the level and speed of deterioration was “comparable to previous major tremors”. It added that fear is growing, with 73% polled expecting prices to rise by more than 1%.
In terms of RBA policy, Westpac expects a further increase of 50bps on August 2, bringing total earnings to 1.85%. Close to Westpac’s rated “independent segment” of 1.5-2.0%. He expects the RBA to use a “more vigilant” approach when the policy moves to “neutral”, and to relax the holding after the August hike.
Australia’s NAB business confidence fell to 1, but positions remained stable
Australia NAB business confidence fell from 6 to 1 June. Economic conditions fell from 15 to 13. Looking at some details, economic conditions fell from 21 to 18. Economic conditions fell from 16 to 12. Conditions fell. work from 12 to 10.
“Confidence fell below the average in June when inflation and rising interest rates were on the lookout,” said NAB Group Chief Economist Alan Oster. “Confidence in the real estate industry has been huge, falling more than 20pts in poor territory, reflecting concerns about the prospect of renting a home.”
“While confidence has fallen, business conditions have remained stable in June,” Oster said. “Conditions remain stable in the states and most industries. It continues to build only the best with the construction costs weighing in, even though it has a good pipeline of work in the area.
Looking forward
Germany ZEW expects the economy to be a major one for the rest of the day.
GBP/USD Daily Review
Daily Pivots: (S1) 1.1827; (P) 1.1932; (R1) 1.1998; More…
The GBP/USD trend is starting again after the short -term rally. The Intraday bias returned to the bottom for a 100% projection of 1.2666 to 1.1932 from 1.2405 at 1.1671. The decision there points to a test at 1.1409 long support. On the upside, above 1.2055 small resistance currently indicates a short -term downtrend, and turn the bias to the side for a strong rebound.
In the bigger picture, a fall from 1.4248 (2018 high) could be a step into the base from 1.1409 (2020 low), or continue in the long run. The depth is expected to decrease as the 1.2666 is held. 1.1409 is the low point. However, a firm break of 1.2666 will return a strong rise to the weekly 55 EMA (currently at 1.3065).
Economic Update
| GMT | Ccy | Events | it’s true | I guess | Used to | Edited |
|---|---|---|---|---|---|---|
| 23:01 | GBP | BRC Like-For-Like Sales Y/Y Jun | -1.30% | -1.50% | ||
| 23:50 | JPY | PPI Y/Y Jun | 9.20% | 9.00% | 9.10% | 9.30% |
| 01:30 | AUD | NAB Business Trust Jun | 1 | 6 | ||
| 01:30 | AUD | NAB Business Status Jun | 13 | 16 | ||
| 09:00 | EUR | Germany ZEW Economic Review Jul | -38 | -28 | ||
| 09:00 | EUR | Germany ZEW Current Status Jul | -33.5 | -27.6 | ||
| 09:00 | EUR | Eurozone ZEW Economic Outlook Jul | -40 | -28 | ||
| 10:00 | USD | NFIB Business Optimism Index Jun | 93 | 93.1 |