The point on June to August being no slowdown in price pressures is in other words a mask that they will stay on hold until September at the earliest. Once again, this effectively rules out a move in July.
This article was written by Justin Low at www.forexlive.com.
They have been out en masse today in justifying and reasoning their decision to cut rates yesterday. But overall, there isn’t anything new to add to the picture. A July rate cut can be safely ruled out but one in September is still potentially on the table.
This article was written by Justin Low at www.forexlive.com.
The Nasdaq this week rallied
strongly following the beat in the US ISM Services PMI where the data showed that the last
month drop was just a blip and overall we have a resilient economy with lower
inflationary pressures. The data continues to reinforce the narrative that the
next move is more likely to be a rate cut, and that inflation is likely to keep
coming back to target. This should keep the market supported amid a positive
risk sentiment.
The main risk today could
come from the US NFP report where bad data across the board could weigh on
sentiment and push the market lower. Overall, the buyers won’t want to see hot
wage growth and a big jump in the unemployment rate as both the outcomes should
be bearish for the market.
Nasdaq Technical Analysis – Daily Timeframe
On the daily chart, we can
see that the Nasdaq rallied to a new all-time high recently following the
strong US data. From a risk management perspective, the buyers will have a much
better risk to reward setup around the 18255 level where we can find the confluence
of the recent swing low and the trendline.
As things stand though, it’s unlikely to see such a big drop without ugly
labour market numbers or a surprising hot inflation report.
Nasdaq Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that the price recently surged to a new all-time high and consolidated
right around the previous all-time high level. This is where the buyers are
stepping in with a defined risk below the level to position for a continuation of
the trend. The sellers, on the other hand, will want to see the price breaking
lower to gain some control and target the 18255 level.
Nasdaq Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see that we have a resistance
now at 19108 and a trendline acting as support around the 19000 level. The red
lines define the average
daily range for today, although the price can extend beyond these levels
when there are strong catalysts like today’s NFP report.
The buyers will want to see
the price breaking higher to increase the bearish bets into new highs. Alternatively,
they can lean on the trendline with a defined risk below it. The sellers, on
the other hand, will want to see the price breaking lower to pile in and target
the 18700 level.
Upcoming
Catalysts
Today we conclude the week with the US NFP report where the consensus sees
185K jobs added in May and the unemployment rate remining unchanged at 3.9%.
Moreover, the average hourly earnings are seen at 3.9% for the Y/Y figure and
0.3% for the M/M measure.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
I would also point out that the selloff could have been exacerbated by algos and the price is now near the lower bound of the average daily range. Generally, the price doesn’t extend much beyond these levels unless there’s a very strong catalyst. Therefore, this might be a good opportunity for dip-buyers to fade the reaction.
In the bigger picture, gold is inversely correlated with real yields as it „competes“ with bonds. The opportunity cost of holding gold rises when real yields rise and falls when real yields fall. Therefore, the inverse relationship. You can see it in the chart below.
In the past two years people pointed out to the decoupling of the correlation, but they never really decoupled. It’s the magnitude that changed. In fact, when real yields have been rising, gold has been falling much less, and when real yields have been falling, gold has been rising much faster.
I’ve never really bought the narrative that gold has been rising due to China. If you look at the chart below which shows China’s gold reserves vs. gold, you will notice that gold has been rising in the past without China buying, and has been falling with China buying a lot. The main reason for the change in the magnitude might be related to the US fiscal profligacy.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
Eine zweite Verhandlungsrunde mit dem Zentralverband der deutschen Seehafenbetriebe über bessere Löhne blieb am Donnerstag ergebnislos. Deshalb will Verdi den Hamburger Hafen bestreiken.