Headlines:

• UK July CPI +2.2% vs +2.3% y/y expected
• Traders now see BOE decision in September to be a coin flip
• The kiwi is the main mover today amid dovish RBNZ
• What are the distribution of forecasts for the US CPI?
• US CPI data due Wednesday, the ranges of estimates (& why they’re crucial to know)
• What is the market pricing for the Fed ahead of the US CPI report later?
• France July final CPI +2.3% vs +2.3% y/y prelim
• Eurozone Q2 GDP second estimate +0.3% vs +0.3% q/q prelim
• Eurozone June industrial production -0.1% vs +0.5% m/m expected
• US MBA mortgage applications w.e. 9 August +16.8% vs +6.9% prior

Markets:

• EUR leads, NZD lags on the day
• European equities higher; S&P 500 futures flat
• US 10-year yields down 2.3 bps to 3.831%
• Gold up 0.3% to $2,471.93
• WTI crude down 0.3% to $78.10
• Bitcoin up 0.7% to $60,982

It was more of a placeholder session in European morning trade today, as all eyes are on the US CPI report coming up later.

We got inflation numbers from the UK and they were softer than estimated, bolstering expectations for a BOE rate cut next month. The market pricing briefly jumped to near 50-50 before settling down a little bit. Now, traders are seeing ~42% odds of a rate cut as compared to ~36% before the report.

GBP/USD dipped lower initially down to 1.2820 but is now trading back to 1.2840, lower by just 0.1% on the day.

There wasn’t much action in the major currencies space with most dollar pairs relatively muted as traders await the main event later in US trading.

EUR/USD did nudge up a little to 1.1020 from around 1.0990 earlier in the session, with buyers eyeing a firmer break above 1.1000. There are large option expiries at 1.1035 to be mindful of as well.

The kiwi is the weakest performer, owing to a more dovish RBNZ which cut interest rates earlier in the day. NZD/USD remains down 1% at 0.6015, not much changed since Asia.

In the equities space, European stocks are slightly higher while US futures are more muted as the risk mood keeps more tentative for the time being.

It’s over to the US CPI report to see how that will shape things for the remainder of the week now.

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

• Prior +6.9%
• Market index 251.3 vs 215.1 prior
• Purchase index 137.7 vs 133.9 prior
• Refinance index 889.3 vs 661.4 prior
• 30-year mortgage rate 6.54% vs 6.55% prior

The big jump in the past week comes as we see a spike in refinancing activity in particular. That comes as the average rate of the most popular US home loan came falling in the last two weeks, amid the plunge in yields. Here’s a look at how the jump in refinancing activity looks from the graph:

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

Whether just
starting a trading journey or being a veteran of twenty years, everybody has
something to learn as an investor. Knowledge is always at a premium, and this
is why its developed into such a strong area of focus at the upcoming Finance
Magnates Pacific Summit (FMPS), coming this August 27-29 in Sydney, Australia.

Retail
trading is a fickle mistress, with no shortage of horror stories as well as
ones of success. Succeeding long-term or meeting your goals takes a diligent
approach, filled with patience, understanding, and being able to adapt. Of
course, this is easier said than done, which is why FMPS has the cheat codes
for traders in the form of a curated session, ‘Essential Lessons from 50
Years of Teaching Traders’.

FMPS will
officially be underway in Sydney in just two short weeks! Have you reserved
your seat to APAC’s biggest event of the year? If not then head on over to the event
website and register
today!

Calling All
Traders to FMPS

FMPS will draw
thousands of attendees, including retail traders, brokers, service providers,
and much more. Four different industry verticals will
be represented, including online trading, fintech, payments, and crypto.

These
areas will all be represented across the event’s curated content track, part of
a full-length
agenda featuring plenty of
panels, workshops, keynotes, and more. Retail content will be taking place
exclusively at the Exchange Zone, the official content stage for all investors
and traders.

The
event will be providing an excellent opportunity for retail traders to learn,
explore, network, and meet with brokers, experts, and other traders. This
knowledge exchange is part of a two-day immersive experience in Australia that
only FMPS can provide.

Learn from the
Best in the Business

Imagine
you had two world class mentors with over 50 years of trading experience
shining a light into your investing blind spot. Would this help? Absolutely. FMevents
has done exactly this, combining two experts onto one stage for an unforgettable
learning experience.

The upcoming
session ‘Essential Lessons from 50 Years of Teaching Traders’, will bring
to light the do’s and don’ts of trading, complete with all the tips and tricks
that equate to meaningful success in any trading journey. The workshop will be taking
place at the Exchange Zone on August 28, 12:40-13:00, ran by the
following speakers:

• Louise Bedford,
  Founder at Trading Game
• Chris Tate, Director
  at Trading Game

There is a lot
to unpack in this session, with these industry veterans providing participants
with an impactful presentation with plenty to learn. Attendees can learn about the
best piece of money advice perhaps ever received, as well as how to ditch the
one strategy that almost everyone gets wrong.

Participants
will also be able to finally cut through the buzzwords, hype, and myths and
learn about any peculiar bias you’ve never heard of that could already be
crippling your results without even knowing.

This is one session
you cannot afford to miss. See you at FMPS in just two weeks!

This article was written by Jeff Patterson at www.forexlive.com.

Fundamental
Overview

Yesterday, the US PPI report missed expectations by a big margin
triggering a selloff in the US Dollar as the market started to position into a
potentially soft US CPI release today.

That led to a key breakout
in the NZDUSD pair which didn’t last as the RBNZ
tonight cut rates by 25 bps. While analysts and economist were expecting the
OCR to remain unchanged, the market was pricing more than a 70% probability of
a rate cut nonetheless.

What weighed on the Kiwi were
more dovish than expected central bank’s forecasts for future interest rates
settings.

For the Fed, the market is
split between a 25 and 50 bps cut in September and a total of 107 bps of easing
by year-end. On the RBNZ side, the market is expecting a 25 bps cut in October
and a total of 71 bps of easing by year-end.

NZDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that NZDUSD probed above the key resistance
zone around the 0.6050 level yesterday after the soft US PPI report but got
smacked back down tonight following the rate cut from the RBNZ.

The sellers piled in with a
defined risk above the resistance to position for a drop back into the lows
around the 0.5850 level. The buyers will want to see the price rising back
above the resistance to increase the bullish bets and position for a rally into
the 0.6217 level next.

NZDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor support zone around the 0.5980 level where the price
got rejected from several times in the past weeks. If we get a pullback all the
way down to the support, the buyers will likely step in with a defined risk
below the support to position for a break above the major resistance with a
better risk to reward setup. The sellers, on the other hand, will want to see
the price breaking lower to increase the bearish bets into the 0.5850 level.

NZDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price dropped all the way to the lower bound of the average daily range for today. The price generally
doesn’t extend much beyond the range unless there’s a strong catalyst.

That catalyst could be a
hot US CPI report today, which might push the price into the 0.5980 support
zone. For now, the buyers are leaning on the minor upward trendline to position
for a rally into new highs.

Upcoming
Catalysts

Today we have the US CPI report. Tomorrow, we get the US Retail Sales and
Jobless Claims figures. Finally, on Friday, we conclude the week with the New
Zealand Manufacturing PMI and the University of Michigan Consumer Sentiment
survey.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Fundamental
Overview

Yesterday, the US PPI report missed expectations by a big margin
triggering a selloff in the US Dollar as the market started to position into a
potentially soft US CPI release today.

The UK
CPI this morning missed estimates across the board as well and raised the
probabilities of a back-to-back cut in September. Most of the initial GBP
weakness though has been erased as the selloff in the greenback has been
stronger and in the bigger picture a positive risk sentiment should favour the
pound anyway.

For the Fed, the market is
split between a 25 and 50 bps cut in September and a total of 107 bps of easing
by year-end. On the BoE side, the market sees a 41% probability of a 25 bps cut
in September and a total of 47 bps of easing by year-end.

GBPUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that GBPUSD is approaching a key resistance
zone around the 1.29 handle. That’s where we can expect the sellers to step in
with a defined risk above the level to position for a drop into the 1.26
handle. The buyers, on the other hand, will want to see the price breaking
higher to increase the bullish bets into new highs.

GBPUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that once the price broke above the downward trendline,
the bullish momentum started to increase as more buyers piled in. We now have a
minor upward trendline defining the current bullish momentum. The buyers will
likely keep on leaning on the trendline to position for new highs, while the
sellers will want to see the price breaking lower to position for a drop into
the 1.26 handle.

GBPUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price bounced around the trendline and the 50% Fibonacci
retracement level this morning following the drop from the UK CPI release. The
red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the US CPI report. Tomorrow, we get the US Retail Sales and
Jobless Claims figures. Finally, on Friday, we conclude the week with the
University of Michigan Consumer Sentiment survey.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• US July NFIB small business optimism index 93.7 vs 91.5 prior
• The risk mood continues to hold up, eyes on US PPI data later
• Germany August ZEW survey current conditions -77.3 vs -75.0 expected
• IEA makes no change to 2024 world oil demand growth forecast in latest report
• European equities open on a more positive note as risk mood breathes easier for now
• Spain July final CPI +2.8% vs +2.8% y/y prelim
• What are the main events for today?
• Eurostoxx futures +0.2% in early European trading
• Japan’s Nikkei extends recovery bounce, closes above 36,000
• UK June ILO unemployment rate 4.2% vs 4.5% expected
• FX option expiries for 13 August 10am New York cut
• UK labour market report in focus in the session ahead
• USD/JPY stays in recovery mode for now, eyes on US data later

Markets:

• NZD leads, JPY lags on the day
• European equities lower;
  S&P 500 futures +0.16%
• US 10-year yields down 13 bps to 3.902%
• Gold
  down 0.35% to $2,463
• WTI
  crude up 0.24% to $79.84
• Bitcoin
  down 0.97% to $58786

The main
highlight in the European session was the release of the UK jobs report where
we saw a notable improvement in the unemployment rate although the data
continues to suffer from reliability issues.

We’ve also
got the German ZEW survey which surprised to the downside posting the biggest
decline in the past two years. In contrast, the situation indicator for the
eurozone improved marginally.

The focus
will now switch to the US PPI figures and Fed’s Bostic, but the main event
comes tomorrow when we will get the US CPI report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

From
major financial institutions to individual investors, participants in the $7.5
trillion per day forex market rely on
dedicated intermediaries to access this vast and complex ecosystem. Operating
behind the scenes but fulfilling a vital role, forex brokers have become the
crucial conduit between regular traders across the world and the fluid currency
markets they aim to speculate in.

More
than just transaction processors, the best forex brokers enhance overall market
functionality. By aggregating massive flows of buying and selling interest,
they provide the underlying liquidity for efficient pricing and swift trade
execution. At the same time, brokers make participating in the global currency
markets easy for traders – by offering online interfaces, analytics, margin
trading and tight dealing spreads.

By
centralizing access and order flows, forex brokers have connected millions of
traders to the thrilling world of currency speculation – enabling anyone to
capitalize on movements in EUR/USD, GBP/USD and other fluctuating exchange
rates. Let’s examine how these behind-the-scenes players make borderless
currency trading possible.

Defining Forex Brokers

Forex
brokers are financial institutions that provide retail and institutional
traders access to the global currency markets. Rather than trading directly
with a market maker, traders conduct currency transactions through a brokerage
platform and interface.

How to
find the best broker? To find out the answer, go here: https://www.earnforex.com/forex-brokers/.

The core
functions of retail forex brokers include:

1. Providing trading platforms and software.
2. Streamlining access to live market prices.
3. Managing customer accounts and processing trades.
4. Offering leverage and other trading services.

By
acting as market middlemen, brokers spare traders from directly accessing the
interbank market. This makes trading more convenient and organized for regular
currency speculators.

Enhancing Market Liquidity

The
gigantic daily turnover in the forex market is underpinned by the constant flow
of buy and sell orders between participants. This order flow is essential for
maintaining market liquidity.

Forex
brokers play a crucial role in aggregating the orders of retail speculators and
channeling this liquidity into the wider interbank market. Without brokers
serving as conduits for currency demand, liquidity in the market would be
severely impacted.

Brokers
enhance liquidity in several key ways:

Channeling
retail order flows. In effect, through consolidating buy and sell orders from
hundreds of thousands of ordinary traders, brokers offer a constant stream of
transactions for market makers and other liquidity suppliers to offer. This
increases the extensiveness of tradable prices.

Bridging
margin trading. Brokers allow clients to trade on margin hence increasing
the trading volumes. The majors brokers provide leverage of up to 500:1 which
amplifies the order flows.

Streamlining
access. In this
capacity, brokers increase their involvement in the forex market by making
currency trading possible at any time of the day through online platforms. More
parties mean more demand, or in other words, more liquidity.

Adding
proprietary liquidity. A large number of brokers are also market makers, which
means they execute customer orders from their own stock to supplement the
market.

Due to
efficiency of the broker in collecting and transmitting orders, the forex
market is highly liquid, which is essential for the fast trades with minimal
effect on the prices.

Driving Price Discovery

Price
discovery refers to the efficient determination of actual asset prices based on
the dynamics of supply and demand. Deep liquidity is vital for effective price
discovery.

By
funneling the aggregated positions of millions of traders into the wider
market, forex brokers drive price discovery across currency pairs. The huge
collective order flows they generate shape prevailing market rates across major
and exotic currency pairs.

When
brokers transmit a surge of buy orders for a specific currency, it exerts
upward pressure on the price, enabling efficient price discovery. The same
dynamic applies to sell orders.

Beyond
influencing near-term price swings, the longer-term positions and strategies of
broker clients ultimately impact currency valuations across the globe. For
instance, a major shift toward long Euro positions at leading US brokers
transfers into euro appreciation over time.

By
reflecting the real-time demand of global traders, brokers help incorporate new
information into currency prices, making them key players in price discovery.

Benefits Brokers Offer Traders

By
serving as indispensable market intermediaries, forex brokers unlock several
benefits for regular currency traders:

Convenience. Brokers offer 24/7 online
trading access without requiring traders to directly participate in interbank
markets. This makes forex trading easy and convenient even for retail
participants with limited capital.

Liquidity
Access. Through
brokers, traders gain access to the phenomenal liquidity of the wider forex
market – enabling swift order fills and limited price slippage. Brokers
aggregate positions to enable institutional-grade liquidity.

Leverage.
Brokers
provide traders the ability to trade on margin, amplifying their purchasing
power in currency markets. Leverage of 50:1, 100:1 or even 500:1 is available,
supercharging potential gains.

Competitive
spreads. By
harnessing aggregated liquidity, brokers can offer tighter dealing spreads to
customers – as low as 0.1 pips for major pairs. This unlocks cost savings for
active traders.

Analysis
tools. Brokers
offer an array of trading analysis tools, from charts to signals, which allow
traders to base decisions on rich market data.

By
delivering these advantages, forex brokers help level the playing field for
retail participants, enabling them to effectively speculate in the world’s
largest financial market.

Conclusion

Forex
brokers fill a vital role in currency markets by serving as conduits between
individual traders and the wider interbank ecosystem. By streamlining access
and aggregating substantial liquidity, they enable efficient price discovery
and provide traders with the infrastructure to implement strategies.

In a
market characterized by enormous daily turnover, brokers enhance liquidity
depth, tighten spreads, and improve participation, leading to
smooth-functioning currency trading. For regular traders seeking to speculate
on movements in EUR/USD, GBP/USD, and other major pairs, forex brokers are
indispensable partners.

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

Fundamental
Overview

The S&P 500 bounced
strongly from the lows last week following the good US Jobless Claims figures as the data quelled some of
the fears around the labour market after the weak US NFP report.

That’s been also evident
from the market pricing for rate cuts as expectations for a 50 bps cut in
September kept on being pared back with now a 25 bps move seen as more likely.
Moreover, the Japanese markets shouldn’t be a problem anymore given that the
Japanese officials made it pretty clear that they won’t proceed with more
tightening given the recent volatility in the markets.

All of the above
contributed to a more positive risk sentiment in the market with the focus now
on the US CPI report tomorrow where benign figures will likely give the bulls
some more support.

S&P 500
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the S&P 500 bounced around the swing low level at 5200 and extended
the gains following the good US jobless claims figures. The price is now
approaching a key resistance
around the 5430 level where we can also find the 61.8% Fibonacci
retracement level for confluence.

This is where we can expect
the sellers to step in with a defined risk above the level to position for a
drop back into the lows. The buyers, on the other hand, will want to see the
price breaking higher to increase the bullish bets into the major trendline
targeting a breakout.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price recently broke above the strong resistance around the 5366
level and extended the gains as more buyers piled in. The price action has been
tentative though as we head into the US CPI report tomorrow.

If we get a bigger
pullback, the buyers will likely lean on the upward trendline
around the 5270 level to position for a rally into the major downward
trendline. The sellers, on the other hand, will want to see the price breaking
lower to increase the bearish bets into the lows.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the recent price action. There’s not much we can glean from
this timeframe as market participants will wait for a catalysts or the price
reaching the key levels. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we get the US PPI data. Tomorrow, we have the US CPI report. On
Thursday, we get the US Retail Sales and Jobless Claims figures. Finally, on
Friday, we conclude the week with the University of Michigan Consumer Sentiment
survey.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

That’s the highest reading since February 2022 but it still sits below the 50-year average of 98. That’s the 31st straight month that it holds below said threshold now. Looking at the details, much of the improvement owes to a jump in the Expected Business Conditions component (+1.8) though while most other components were relatively unchanged.

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

It is pretty much the case of markets just letting out a sigh of relief. That after all the overblown panic in calling for emergency rate cuts on Monday last week. It’s a meme market these days. When things are going their way, it’s all bullish and life is good. But when a retracement or correction comes, suddenly the view changes dramatically to a crash landing from a soft landing. There’s no in between.

Mind you, both the S&P 500 and Nasdaq are both up roughly 12% this year. So, what exactly is that bad again?

In any case, market players are continuing to take in the calm for now. The rebound in Japanese yen pairs is also a helpful factor, with USD/JPY up another 0.4% to 147.85 currently. That’s helping to soothe carry trades in general, after being beaten up badly after the US jobs report.

Meanwhile, S&P 500 futures are up another 0.4% today with Nasdaq futures up 0.6% currently.

Broader market sentiment is holding up but will be due a litmus test later in US trading. We will be getting US PPI data and while this isn’t quite as crucial as the CPI report tomorrow, it offers a bit of a teaser. At least in terms of how markets might react.

For now, the wait continues. And that’s making for a bit of a snoozer so far in European morning trade.

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