• Will the Jackson Hole event be bearish for stocks?
• Bundesbank says wage growth has slowed down in Q2
• Eurozone July final CPI +2.6% vs +2.6% y/y prelim
• Dollar on troubled shores so far this week
• Eurozone June current account balance €51.0 billion vs €36.7 billion prior
• European equities open marginally higher to kick start the day
• What are the main events for today?
• Eurostoxx futures +0.1% in early European trading
• Germany July PPI +0.2% vs +0.2% m/m expected
• Switzerland July trade balance CHF 4.89 billion vs CHF 6.18 billion prior
• Gold breakout holds more tentative for now
• The Trump-Harris debate for 4 September will no longer take place
• Not too much on the agenda in European trading later today

Markets:

• NZD leads, EUR lags on the day
• European equities mostly flat;
  S&P 500 futures slightly higher
• US 10-year yields up 10 bps to
  3.875%
• Gold
  up 0.8% to $2,523.80
• WTI
  crude up 0.38% to $73.87
• Bitcoin
  up 1.8% to $60,562

It was
another slow session due to the lack of key economic releases. The sentiment in
the markets remains mostly positive as everyone’s looking forward to Fed Chair
Powell’s speech on Friday expecting a pre-commitment to a rate cut in
September.

In the FX
market, the major pairs are basically flat on the day with the USD remaining on
the backfoot amid the risk-on sentiment. Equities continue to benefit from the
prospects of rate cuts into resilient growth as that should boost economic
activity.

Gold has
been another notable mover in the past few days as it reached a new all-time
high. The Fed’s monetary policy trajectory is one of the main drivers of the
precious metal as it influences real yields.

The recent crude oil
weakness, on the other hand, has been a head-scratcher but I can see the
pricing out of the geopolitical risk premium as the main reason as lots of time has passed
and we haven’t got any Iran retaliation.

Bitcoin should
be another major beneficiary of the easing cycle into resilient growth as it’s
basically digital gold on steroids.

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

While it’s true that the market didn’t perform well in the following couple of months, the context today is much different.

In 2022, it goes without saying why it was different. The Fed was still in the middle of its hiking cycle and Powell delivered a very hawkish message.

In 2023, it wasn’t actually the Jackson Hole event that triggered the weakness. It was first the hot CPI on Thursday 14th and then the much more hawkish than expected FOMC on Wednesday 20th.

Even without those two catalysts in 2023, the market diverged pretty strongly from real yields and eventually it just caught up to the reality before bottoming out and resuming the rally into the December’s Fed pivot.

Right now, we are actually entering the easing cycle with resilient growth which is a strong tailwind for stocks as that should depress real yields and boost economic activity.

So, while we can’t know for sure how the market’s going to perform in the next couple of months, I’d say that this time a rally is more likely.

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

The Russell 2000 last Thursday managed to break above a key resistance zone
following strong US Jobless Claims and Retail Sales data. The market
continues to fade the “growth scare” we got at the beginning of August and it’s
now looking forward to the Fed’s rate cuts. In fact, the rate cuts into resilient growth should
boost economic activity and risk sentiment which should be a strong tailwind
for the small cap stocks.

Russell 2000
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Russell 2000 got a boost last Thursday following the strong US
Jobless Claims and Retail Sales data triggering some key breakout on the lower
timeframes. The buyers piled in more aggressively and will now target a new
cycle high. The sellers will need the price to deliver some downside breakout
on the lower timeframes to start looking for new lows.

Russell 2000 Technical Analysis – 4 hour
Timeframe

On the 4 hour chart, we can
see that we got the breakout of the strong resistance around the 2110 level last Thursday
which increased the bullish momentum. We now have an upward trendline defining the current bullish
momentum.

If we were to get a
pullback, we can expect the buyers to lean on the trendline to position for new
highs with a better risk to reward setup. The sellers, on the other hand, will
want to see the price breaking lower to start piling in for new lows.

Russell 2000 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have another minor support zone where the buyers will likely lean
onto in case we get a pullback. The sellers, on the other hand, will want to
see the price breaking below the support to position for a drop into the major
trendline. The red lines define the average daily range for today.

Upcoming
Catalysts

On Thursday we get the US Jobless Claims figures and the US PMIs.
On Friday we conclude with Fed Chair Powell speaking at the Jackson Hole
Symposium.

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

The German central bank noted that negotiated wage growth in Q2 was seen at 3.1%, as opposed to the 6.2% reading in Q1. However, they note that they expect a „temporary rise“ in German inflation towards the end of the year due to base effects. That just means that the economic recovery will be delayed further.

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

Copper has been on
a sustained downtrend since reaching its peak in May. More recently we’ve been
seeing some life coming back into the market with an increase in the bullish
momentum last week as the mining giant BHP said
on last Tuesday that it had started removing workers on strike at its
Escondida copper mine in Chile.

In the big picture, stable global growth and major central banks cutting
rates into resilient economies should be bullish drivers for the copper market and
more expansionary policies from Chinese officials might give an even stronger boost.
The timing though is the trickiest part.

Copper
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that copper pulled back into a key level at 4.24 where we can find the confluence
of the previous swing high, the trendline
and the 38.2% Fibonacci
retracement level. This is where we can expect the sellers to step in with
a defined risk above the level to position for a drop into the 3.80 level. The
buyers, on the other hand, will want to see the price breaking higher to pile
in and position for a rally into the 4.68 level next.

Copper Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that in case we get a pullback from the 4.24 resistance,
the buyers will likely lean on the upward trendline around the 4.14 level to
position for a break above the 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 3.80 level.

Copper Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a minor support zone around the 4.19 level. We can expect the
buyers to lean on it to position for a break above the key resistance, while
the sellers will look for a break lower to pile in for a drop into the
trendline around the 4.14 level. The red lines define the average daily range for today.

Upcoming
Catalysts

On Thursday we get the US Jobless Claims figures and the US PMIs.
On Friday we conclude with Fed Chair Powell speaking at the Jackson Hole
Symposium.

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

• It’s a slower start to the new week so far
• What are the main events for today?
• Weekly update on interest rates expectations
• Fed’s Kashkari: It is appropriate to have debate on whether to cut rates in September
• SNB total sight deposits w.e. 16 August CHF 464.9 bn vs CHF 463.1 bn prior

Markets:

• JPY leads, USD and CAD lag on the day
• European equities a little higher; S&P 500 futures flat
• US 10-year yields down 1.7 bps to 3.875%
• Gold down 0.6% to $2,492.62
• WTI crude down 0.7% to $76.08
• Bitcoin down 1.7% to $58,250

It was a much slower session as markets calmed down following the more hectic events last week.

There isn’t much on the economic calendar today and there won’t be much until we really get to Thursday. So, that might invite a bit of a lull in broader market sentiment this week.

But the Japanese yen isn’t one to be wanting to sit down though. USD/JPY fell early on in Asia before continuing its drop to 146.10 in early European trading. That was followed by a further drop to 145.18 before the pair moved back up to hover around 146.00 now, still down 1% on the day.

The dollar in general remains more sluggish, with lower bond yields also weighing. EUR/USD is hovering at 1.1040, up 0.1%, while USD/CHF is down 0.2% to 0.8640 currently.

The antipodean currencies are also higher against the dollar, helped by a stronger yuan as well. AUD/USD up 0.4% to near 0.6700 while NZD/USD is up 0.4% as well to 0.6075 at the moment.

In the equities space, investors are keeping a more tentative approach after the gains last week. European indices are marginally higher while US futures are flat, with eyes on Fed chair Powell’s appearance at Jackson Hole later in the week.

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

• Balance of risks have shifted more towards labour market and away from inflation
• Inflation is making progress
• But labour market is showing some concerning signs

He’s reiterating what we already have come to know in recent weeks. They’ve been teeing up a rate cut in September and this just contributes to that narrative. We’ll see if Powell will be more explicit during his appearance at Jackson Hole later this week.

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

The S&P 500 finally erased the entire drop from the last ISM Manufacturing PMI as the market faded the
“growth scare”. The first catalyst was the good US Jobless Claims on the 8th of
August as that quelled the fears on a deteriorating labour market triggered by
the weak NFP report.

Last week, we got even better Jobless Claims figures and a great Retail Sales report which increased
the bullish momentum. The market’s focus is now clearly on growth. This week,
we will have two key events.

The first will be on Thursday as we will get the release of the US Flash
PMIs for August and that will be kind of a test for the thesis that the July
data was negatively affected by Hurricane Beryl. The second one will be Fed
Chair Powell’s speech at the Jackson Hole Symposium where he will likely
pre-commit to a rate cut in September.

S&P 500
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the S&P 500 reached the key 5600 level where the growth scare
began. 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 5200 level. The buyers, on
the other hand, will want to see the price breaking higher to increase the
bullish bets into a new all-time high.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a key support zone around the 5440 level where we can find
the confluence
of the 38.2% Fibonacci
retracement level and the upward trendline.
If we were to get a bigger pullback, the buyers will likely step in around that
zone to position for a rally into new highs 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 5200 level.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a minor upward trendline defining the current bullish momentum.
The buyers leant on this trendline on several occasions as they kept on
targeting new highs. We can expect them to keep doing so, but if the price were
to break lower and fall below the last higher low at 5535, the bearish momentum
might increase as the sellers will pile in more aggressively for a drop into
the 5440 support. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have Fed’s Waller speaking. On Thursday we get the US Jobless Claims
figures and the US PMIs. On Friday we conclude with Fed Chair Powell speaking
at the Jackson Hole Symposium.

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

The thing about this week is that there won’t be as much key risk events on the calendar as last week. And that means market players will not have too much to work with for the time being. Fedspeak is the main thing to be mindful about, as traders digest the key US data from last week. And also considering that we have the Jackson Hole symposium coming up.

There is the FOMC meeting minutes on Wednesday. But in terms of the economic calendar, we’ll have to wait until Thursday for PMI data and also the US weekly jobless claims. So, traders might be left in a bit of a state of flux in the sessions ahead.

For today, the Japanese yen is a standout mover though as the Nikkei fell by 1.8%. USD/JPY dropped to a low of 145.18 earlier but is now trading roughly 100 pips above that again.

The pair is moving back to its recent consolidation range after the break back above 145.00 earlier this month. And the fall in bond yields is also weighing, as noted here.

As for the risk mood today, traders and investors are not finding much conviction. European indices are lightly changed with marginal gains at best. Meanwhile, US futures are still flat and not observing much movement since Asia trading earlier.

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

The Nasdaq finally erased the entire drop from the last ISM
Manufacturing PMI as the market faded the “growth scare”. The first catalyst
was the good US
Jobless Claims on the 8th of August as that quelled the fears on
a deteriorating labour market triggered by the weak NFP
report.

Last week, we got even better Jobless
Claims figures and a great Retail
Sales report which increased the bullish momentum. The market’s focus is
now clearly on growth. This week, we will have two key events.

The first will be on Thursday as we will get the release of the US Flash
PMIs for August and that will be kind of a test for the thesis that the July
data was negatively affected by Hurricane Beryl. The second one will be Fed
Chair Powell’s speech at the Jackson Hole Symposium where he will likely
pre-commit to a rate cut in September.

Nasdaq
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Nasdaq broke above the key trendline and extended the gains into the key
19712 level. This is where we can expect the sellers to step in with a defined
risk above the level to position for a drop into the major trendline around the
18000 level. The buyers, on the other hand, will want to see the price breaking
higher to increase the bullish bets into new highs.

Nasdaq Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we an upward trendline defining the current bullish momentum. If we
were to get a bigger pullback, the buyers will likely lean on the trendline
where they will also find the 38.2% Fibonacci
retracement level for confluence.
The sellers, on the other hand, will want to see the price breaking lower to
increase the bearish bets into the 18000 level.

Nasdaq Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a steeper minor upward trendline that’s been acting as support
for the buyers as they kept on leaning on it to push into higher highs. This is
where we will likely see them stepping in again with a defined risk below the
last higher low at 19445 to position for a break above the key resistance.

The sellers, on the other
hand, will want to see the price breaking below the trendline and the 19445
level to increase the bearish bets into the other trendline around the 19000
level. The red lines define the average daily range for today.

Upcoming Catalysts

Today we have Fed’s Waller speaking. On Thursday we get the US Jobless Claims
figures and the US PMIs. On Friday we conclude with Fed Chair Powell speaking
at the Jackson Hole Symposium.

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