Spreadex Market Update
Fed Expectations Mount Amidst Market Uncertainty
Markets are exhibiting caution as Federal Reserve expectations continue to rise. A surge in the dollar's strength and an uptick in the VIX volatility index follow closely on the heels of the latest US labour market data, signalling a bout of risk aversion.
Key Factors for Today
- Markets Retreat as Fed Expectations Rise on Labour Data
- Gold Climbs Despite Fed Prospects Boosting Greenback
- EIA Confirms Large Inventory Draw, But WTI Slips
- EURUSD Hits June Low after Downward GDP Revision
- Disappointing UK Data Adds to Cable's Losing Streak
- Loonie Drops to March Low Against USD on Growth Concerns
Market Movers
- Global equities dipped as risk-off sentiment prevailed, bolstering the US dollar and pushing the VIX higher.
- Gold defied Fed prospects, climbing despite the strengthening greenback.
- EIA reported a substantial inventory draw, yet WTI crude oil prices slipped due to a stronger dollar.
- EURUSD hit a fresh June low after a downward GDP revision in the Euro Area.
- Disappointing UK data continued Cable's losing streak as economic indicators deteriorated.
- The Canadian dollar dropped to a March low against the USD amidst concerns over growth and a risk-off market sentiment.
Economic Calendar
- Fed Barr Speech
- DE Inflation
- CA Jobs Data
The Big News
The Gold Higher Despite Fed Prospects Fuelling Dollar
The labour market in the United States continues to tighten, with weekly initial jobless claims unexpectedly dropping to 216K, their lowest level since March, and continuing claims falling below expectations to 1.68M. These signs, coupled with rising prices in the ISM services component, have fuelled speculation of a final Federal Reserve interest rate hike.
EIA Confirms Large Draw, But WTI Turned Anyway
The Energy Information Administration (EIA) reported a significant 6.3 million barrel decline in US crude inventories, surpassing the 2 million barrel forecast. Concurrently, US crude exports increased from 10.4 million barrels to 11.4 million barrels.
EURUSD to Fresh June Low After GDP Revision
The final reading for Euro Area GDP growth revealed a disappointing revision from 0.3% to 0.1%, falling short of the initial 0.2% forecast. Government spending in the period grew at a sluggish 0.2%, contributing to the downward revision. Annual GDP growth also saw a reduction, from 0.6% to 0.5%.
Disappointing UK Data Marks 3-Day Losing Streak for Cable
August brought gloomy news for the UK as the Halifax House Price index fell by -1.9%, well below the expected -0.1%, signalling an accelerating decline from July's -0.4%. Additionally, the REC reported a significant decline in hiring, with UK employers reducing hiring at the fastest rate since June 2020, while temporary work hiring fell for the first time since mid-2020.
Loonie Swoons to a March Low on Growth Concerns
The Canadian dollar faced headwinds as risk-off sentiment prevailed in commodity markets. The Bank of Canada's decision not to implement a rate hike earlier in the week exacerbated concerns about economic growth, causing the Loonie to drop to a five-month low against its US counterpart.
It's easy to open an account
- Fill in our simple online application form
- Fund your account
- Start trading the global markets instantly!
SEARCH FOR AN ARTICLE:
Enter a keyword and search for all relevant articlesMARKET ANALYSIS
RECENT POSTS
DISCLAIMER
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investors lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. For professional clients, spread betting and CFD trading can also result in losses larger than your initial stake or deposit.
Spreadex Ltd is authorised and regulated by the Financial Conduct Authority, provides an execution only service and does not provide advice in any way. Nothing within this update should be deemed to constitute the provision of investment advice, recommendations, any other professional advice in any way, or a record of our trading prices. This update does not constitute or form part of an offer of, or solicitation for a transaction in any financial instrument, nor shall it or the fact of its distribution form the basis of, or be relied on in connection with, any contract therefore. Any persons placing trades based on their interpretation of the comments or information within this update does so entirely at their own risk.
No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained within this update by Spreadex Ltd or any of its employees and no liability is accepted by such persons for the accuracy or completeness of any such information or opinions. As such, no reliance may be placed for any purpose on the information and opinions contained within this update.
The information contained within this update is the intellectual property of Spreadex Ltd and is protected by UK and International copyright laws. All rights reserved. Users may however freely download, distribute and reproduce extracts of the contents, subject always to accrediting Spreadex Ltd as the source and providing a hyperlink to www.spreadex.com.
