Spreadex Market Update
Caution and Cautious Optimism: A Recap of a Tumultuous Market Week
Investors approached the markets cautiously ahead of a busy week, resulting in listless trading. The US dollar saw gains against the Japanese yen, while cable's losing streak persisted despite a surge in retail sales. Meanwhile, the IEA's potential demand revision boosted WTI prices, and the Australian dollar continued to slide amidst Chinese government budget concerns.
Key Factors for Today
- BOJ's YCC Message Lifts USD/JPY by 1.25%
- Cable's Losing Streak Continues Despite Retail Sales Surge
- IEA's Possible Demand Revision Bolsters WTI Prices
- Aussie Slides Further Amid Chinese Gov Budget Concerns
Market Movers
- FTSE Supported by Resilient UK Retail Sales
- BOE's Meeting Weighs on Pound Amidst Uncertainty
- Saudi Aramco's Investment Fuels WTI Rally
- Australian Dollar Hit by China's "Wellbeing Budget" and Fed's Rate Decision
Economic Calendar
- EA HCOB Manufacturing PMI Flash
- S&P Global/CIPS Manufacturing PMI
- Chicago Fed National Activity Index
- S&P Global Manufacturing, Services PMI Flash
The Big News
USD/JPY Surges 1.25% as BOJ YCC Message Spurs Bullish Momentum
USD/JPY Soars 1.25% After BOJ YCC Message The Bank of Japan's decision to wait for more data before acting on yield curve control (YCC) and its plans to revise inflation expectations higher propelled the USD/JPY pair by 1.25% to 141.83. However, Japan's Preliminary Manufacturing PMI fell short of expectations, adding pressure on the yen after its initial drop. The next targets for bulls lie at 142.67, while a dip could open the door to 140.50.
Cable's 6-Day Losing Streak Persists Despite Retail Sales Upsurge
Cable on 6-Day Losing Streak Despite Retail Sales Upside UK retail sales surprised with a strong 0.7% jump in June, but despite this resilience in the UK consumer market, the pound continued its 6-day losing streak, barely hovering above $1.28. As investors speculate on the Bank of England's potential interest rate hike at the upcoming meeting, resistance levels stand at $1.2940 and $1.29, while major support rests at $1.2765.
WTI Prices Strengthened by IEA's Demand Revision Expectations
IEA Possible Demand Revision Bolsters WTI The International Energy Agency's anticipation of revising its demand outlook due to changes in China's economic growth prospects, combined with Saudi Aramco's significant investment, boosted WTI prices by 1.50% to $76.75/bbl. The rally faced resistance at the $77.25/bbl high, while support is expected at $75.65/bbl.
Australian Dollar Loses Steam Amidst Chinese Government Budget Concerns
Aussie Continues Losing Steam Amid Chinese Gov Budget The Australian dollar slid 0.80% on Friday, fuelled by concerns over upcoming policy meetings and apprehension following the release of China's "wellbeing budget." The looming Fed rate decision also contributed to the currency's weakness, setting the stage for potential declines towards $0.6685 and further until Wednesday, with $0.6750 as a short-term ceiling.
Financial Markets Tread Cautiously Amidst Upcoming Events
The financial markets witnessed cautious moves as investors prepared for significant upcoming events. With the Bank of Japan's message on yield curve control lifting the USD/JPY pair, traders remained watchful of any further developments. In the UK, robust retail sales failed to support the pound, which continued its losing streak amid uncertainties surrounding the Bank of England's monetary policy. Meanwhile, the IEA's possible demand revision led to a bullish trend in WTI prices, supported by Saudi Aramco's major investment in a Chinese petrochemical firm. The Australian dollar faced headwinds, with the Chinese government's budget announcement and the upcoming Fed rate decision driving investor sentiment.
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