• Sterling holds post-CPI gains for now
• UK July CPI +6.8% vs +6.8% y/y expected
• China says will strengthen policy coordination in order to meet growth target
• How does the Fed pricing look now?
• S&P 500 set to be put to the test later today
• Eurozone Q2 GDP second estimate +0.3% vs +0.3% q/q prelim
• Eurozone June industrial production +0.5% vs -0.1% m/m expected
• US MBA mortgage applications w.e. 11 August -0.8% vs -3.1% prior

Markets:

• GBP leads, CHF lags on the day
• European equities mixed; S&P 500 futures flat
• US 10-year yields down 3.4 bps to 4.187%
• Gold up 0.1% to $1,903.77
• WTI crude up 0.3% to $81.24
• Bitcoin down 0.2% to $29,118

It was a bit of a mixed session as markets continue to digest the concerns surrounding China but for the most part, broader sentiment is ignoring it somewhat.

Equities were a little higher earlier on but surrendered the light gains to be little changed and more tentative on the day now. The worry here is that the selling in August might look set to continue, with yesterday’s drop being another lesson.

We did have UK inflation data, which saw the headline number fall as expected but the core reading remains relatively stubborn. With markets already fully pricing in a 25 bps move by the BOE next month, the pound saw little gains on the day as the dollar is also keeping more mixed.

GBP/USD did move up from around 1.2700 to 1.2760 before keeping at around 1.2740 now. In general, the dollar isn’t doing a whole lot as it holds a minor advance against the yen and franc but is just marginally lower against the euro and aussie.

In the bond market, we are seeing yields come off the boil and undoing the move up from yesterday. But it is still early days and unless there are broader concerns regarding China, yields still have some scope to turn around as we have seen in Wall Street previously. That said, we’ll see what the session ahead brings.

This article was written by Justin Low at www.forexlive.com.

Like
Bitcoin, Ethereum continues to surprise in light of many headwinds that range
from economic issues in China and risks of higher rates if inflation remains
stubbornly high given the resilience in the labour markets and consumer
spending.

Ethereum Technical Analysis
– Daily Timeframe

On the daily chart, we can see that Ethereum seems
to be bottoming out near the trendline where we
can find the confluence with the
50% Fibonacci retracement level
and the 1816 support. This is
where the buyers are stepping in with a defined risk below the trendline to
target a breakout of the 2029 resistance. If the price falls below the
trendline, we should see the sellers piling in more aggressively to target the
1681 support.

Ethereum Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can see that the price
action has been rangebound around the support area as the market is awaiting a
catalyst to push more strongly on either side. This gives us a clear setup as a
break above the 1880 resistance should lead to a rally into the 2029 high,
while a break below the trendline should trigger a selloff into the 1681
support.

Ethereum Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have a minor downward trendline defining the current bearish trend. This is
another level for the buyers to watch out for as a break above it might take
the price into the 1880 level.

Upcoming Events

This week is a
bit empty on the data front and the most important release will be the US
Jobless Claims tomorrow. Readings in line with expectations should be the most
favourable scenario. In fact, in case we see a big beat, we may see more
hawkish expectations around interest rates that can weigh on Ethereum. On the
other hand, a big miss is likely to cause recessionary fears and lead to
risk-off sentiment which might cause a selloff in the cryptocurrency.

This article was written by FL Contributors at www.forexlive.com.

• To strengthen coordination of various policies to boost growth
• To continue to expand policy room to bolster consumption, promote investment
• Will make greater efforts to attract and utilise foreign investment
• To fend off major risks

The cabinet meeting is said to be held amid mounting economic woes in the country. But it just appears to be a bit of a timely message I would say to try and comfort markets and the public. I mean, if you look at the Google trends image below, you can see that there is skyrocketing interest in the Chinese economy all of a sudden. And that isn’t a good thing.

This article was written by Justin Low at www.forexlive.com.

• Prior -3.1%
• Market index 193.0 vs 194.5 prior
• Purchase index 149.5 vs 149.9 prior
• Refinance index 408.4 vs 416.1 prior
• 30-year mortgage rate 7.16% vs 7.09% prior

Mortgage applications continue to fall, this time largely due to a drop in refinancing activity. It’s not a good look for mortgage activity since the Fed began tightening monetary policy and even as we are near a pivot point, higher yields is not helping the overall outlook of the housing market for now.

This article was written by Justin Low at www.forexlive.com.

US futures are now trading flattish again after a light advance earlier. There are lingering jitters from China and despite a retreat in bond yields today, it isn’t enough to really spur a push higher in stocks. That might be the tell for equities sentiment in general. However, we could use a technical test later today to confirm that.

The close yesterday saw the S&P 500 finish at its lowest level in five weeks. And now, we’re approaching the first technical test on the way down in the form of the trendline support from the March and late May lows. It’s a somewhat subjective line but in accordance to measuring the uptrend momentum, it might be an important one.

A fall below that would open the doors to potentially retreating back towards the late June low at 4,328 next. Then, we might start to see the 100-day moving average (red line) get called into question as well.

It’s a tough one for stocks at the moment I would say. There tends to be a turn in sentiment and selling when Wall Street comes in and that is regardless of what the bond market might do it would seem. But if bonds are more bid amid safety flows, then there is even more reason for equities to run and hide.

For now though, let’s see what the bond market will have to offer later in the day and if we are set for another turnaround again in US trading.

This article was written by Justin Low at www.forexlive.com.