Spreadex Market Update
Eurozone and UK PMIs Disappoint, DJIA Continues Gains, Chevron Boosts Crude Prices
Eurozone and UK markets faced disappointment as flash PMIs missed expectations, while the DJIA extended its winning streak after upbeat US PMIs. Chevron's Q2 earnings helped boost WTI to a three-month high, but a stronger dollar continues to affect the commodity market.
Key Factors for Today
- Eurozone PMIs disappoint again, with the Euro sliding back to $1.10 against the Dollar.
- UK PMI slides below expectations, leading to a 7-day losing streak for Cable.
- DJIA reports an 11th consecutive gain following better-than-expected US PMIs.
- Chevron's Q2 earnings push WTI crude to a three-month high, nearing $80/bbl.
Market Movers
- Eurozone markets lose risk appetite after PMIs miss expectations.
- UK's Cable records 7-day losing streak due to downbeat PMI data.
- DJIA continues its winning streak after strong US PMI figures.
- Chevron's Q2 earnings bolster WTI crude, offsetting the impact of a stronger Dollar.
Economic Calendar
- German Ifo Business Climate
- CBI Industrial Trends Orders
- S&P/Case-Shiller Home Price
- CB Consumer Confidence
- API Crude Oil Stock Change
The Big News
European Markets Disappointed as Flash PMIs Signal Ongoing Contraction
European markets experienced a setback today as the flash PMIs for the Eurozone disappointed investors, with the Preliminary Manufacturing PMI coming in at 42.7, below the expected 43.5. This marked the thirteenth consecutive contraction and the worst reading since May 2020. Concerns have been raised about the impact of the European Central Bank's aggressive stance on the region's economic recovery, especially after managing to avoid a technical recession earlier in the year. As a result, the EUR/USD exchange rate fell for the fifth consecutive session, targeting $1.10, while resistance is expected at $1.11.
UK's Cable Extends Losing Streak Amidst Growing Economic Concerns
The UK's Cable faced its seventh straight day of losses as the Preliminary PMI printed at 45.0, falling below the expected 46.0. This marks the twelfth consecutive contraction for the UK, raising concerns about the country's economic growth. Cable found support at $1.28, but if it continues trading below $1.2885, it may expose further downside towards $1.2740.
DJIA Extends Winning Streak on Strong US PMIs and Upcoming FOMC Meeting
The US markets saw a positive trend, particularly for the DJIA, which reported its 11th consecutive gain after better-than-expected US PMIs. The Flash US Manufacturing PMI recorded 49.0, surpassing the forecasted 46.2, and while this marked the third month of contraction, it was the best reading since April. Although services underperformed with their lowest result since the start of the year, they still remained in expansion territory. However, all eyes are now on the upcoming FOMC meeting, where a 25bps rate hike is broadly anticipated. The DJIA is closely monitored, and if it remains above 35,200, bullish sentiment might drive the index towards 35,550.
Chevron's Q2 Earnings Propel WTI Crude to Three-Month High Amid Dollar Strength
Another significant market mover was Chevron, which pre-announced its Q2 earnings, reporting a net profit of $5.77 billion. The better-than-anticipated results provided a much-needed boost to WTI crude prices, which reached a three-month high, just shy of $80/bbl. However, the ongoing strength of the Dollar continues to impact crude prices, and traders are now keeping an eye on the next resistance level at $81/bbl, with support holding at $77.50/bbl.
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