Market Roundup
• US Jul Core Retail Sales (MoM) 0.3%, -0.2% forecast,-1.3% previous
• Canada Corporate Profits (QoQ) 1.5% ,0.6% previous
•Canada Jul Manufacturing Sales (MoM) 1.1% ,-2.1% previous
• Canada Jun Retail Sales (MoM) -0.3% ,-0.3% forecast, -0.8% previous
• US Jul New Home Sales 739K,624K forecast, 617K previous
•U.S. Baker Hughes Oil Rig Count 483,483 previous
Looking Ahead Economic Data (GMT)
•No Data Ahead
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
EUR/USD: The euro gained against the dollar after Fed Chair Jerome Powell's comments boosted market confidence that the Fed might begin a rate-cutting cycle next month. Powell indicated it was time for policy adjustments and emphasized the Fed's commitment to supporting a strong labor market while progressing towards price stability. He also expressed growing confidence that inflation is moving sustainably back to 2%. The dollar index, which had been trading flat just before Powell's speech, subsequently fell to its lowest in more than a year, suffering its biggest one-day loss since Aug. 2,the euro hit its highest since July last year. Immediate resistance can be seen at 1.1186(23.6%fib), an upside break can trigger rise towards 1.1218(Higher BB).On the downside, immediate support is seen at 1.1098(38.2%fib), a break below could take the pair towards 1.10733 (Aug 20th low).
GBP/USD: Sterling surged to a 2024 high on Friday following Fed Chair Jerome Powell's announcement that it was time to adjust U.S. rates. This boosted market confidence in a September rate cut, likely driving GBP/USD higher. Recent data indicate a divergence in growth and employment, with the UK economy showing more strength compared to the U.S., leading to differing monetary policy expectations between the Fed and the Bank of England. The market now sees a 32% chance of a 50 basis point cut in September, up slightly from the previous day but still well below the near 100% likelihood following the August 2 payrolls miss. In contrast, UK rate futures suggest just 43 basis points of additional easing for the rest of the year, totaling 68 basis points in rate cuts for 2024. Immediate resistance can be seen at 1.3203(23.6%fib), an upside break can trigger rise towards 1.3231(Higher BB).On the downside, immediate support is seen at 1.3120(38.2%fib), a break below could take the pair towards 1.3086(Daily low).
USD/CAD : The Canadian dollar strengthened to a four-month high against its U.S. counterpart on Friday as Federal Reserve Chair Jerome Powell signaled the start of interest rate cuts and preliminary domestic data showed retail sales rising in July . The U.S. dollar continued its recent slide against major currencies, and Wall Street rose after Powell announced that "the time has come" for interest rate cuts. Canadian retail sales dropped 0.3% in June due to the effects of high interest rates, but flash estimates showed a 0.6% rebound in July, along with a 1.1% increase in manufacturing sales. Additionally, the price of oil, a key Canadian export, rose by 1.8% to $74.32 per barrel. Immediate resistance can be seen at 1.3559(38.2%fib), an upside break can trigger rise towards 1.3606(50%fib).On the downside, immediate support is seen at 1.3505 (23.6%fib), a break below could take the pair towards 1.3490(Lower BB).
USD/JPY: The dollar fell against the yen after Federal Reserve Chair Jerome Powell indicated that it’s time for policy adjustments, which boosted sentiment for those betting against the dollar despite recent hawkish comments from the BoJ. Powell’s dovish remarks increased the likelihood of a 50 basis point cut in September to 34% from 28%. His assurance that the Fed will support a strong labor market might signal a "Powell put" for investors. While current data suggests a 25 basis point cut is more likely, a significant cooling in next month’s labor market report could lead to a 50 basis point reduction. Meanwhile, BoJ Governor Kazuo Ueda maintained a hawkish stance consistent with his previous comments. Strong resistance can be seen at 145.95(38.2%fib), an upside break can trigger rise towards 146.65(Daily high). On the downside, immediate support is seen at 144.11(23.6 %fib), a break below could take the pair towards 144.00(Psychological level).
Equities Recap
Europe's STOXX 600 closed near session highs on Friday, driven by widespread gains as global markets rallied following Federal Reserve Chair Jerome Powell's statement that "the time has come" to lower interest rates.
UK's benchmark FTSE 100 closed up by 0.48 percent, Germany's Dax ended up by 0.76` percent, France’s CAC finished the day up by 0.70 percent.
U.S. stocks surged on Friday as dovish comments from Federal Reserve Chair Jerome Powell reinforced expectations that the central bank will cut its key policy rate in September.
Dow Jones closed up by 1.14% percent, S&P 500 closed down by 1.15 % percent, Nasdaq settled up by 1.45% percent.
Commodities Recap
Gold prices climbed over 1% on Friday as the dollar and Treasury yields fell after Federal Reserve Chair Jerome Powell's comments indicated a potential interest rate cut in September.
Spot gold increased by 1.2% to $2,512.63 per ounce by 1:44 p.m. ET (1744 GMT), though it was below Tuesday's record high of $2,531.60. U.S. gold futures closed 1.2% higher at $2,546.30.
U.S. light crude oil rose over 2% on Friday following Federal Reserve Chair Jerome Powell's comments suggesting the central bank is poised to cut interest rates.
Brent crude futures increased by $1.80, or 2.33%, closing at $79.02 a barrel. U.S. West Texas Intermediate (WTI) crude futures gained $1.82, or 2.49%, ending at $74.83 a barrel.
