• It is month end? How did the USD do vs the major currencies?
• US stocks close the month with strong gains
• EURUSD will go into next week within the same confined trading range
• WTI crude oil futures settle at $98.60
• Key events and releases next week highlighted by the US employment & rate decisions
• So what is the earnings calendar looking like for the new trading week?
• Baker Hughes oil rig count up 6 to 605
• European indices close with solid gains
• Canada budget balance for April comes in at C$2.66 billion surplus
• Atlanta Fed GDPNow tracker for 3Q growth comes in at 2.1%
• University of Michigan consumer sentiment (final) for July 51.5 vs. 51.1 expectations
• Fed’s Waller: a soft landing is a plausible outcome in the US labor market
• VIDEO: The USD moves higher after the higher core PCE inflation numbers today
• A year ago today, the Fed’s Bullard made a hawkish pivot: He was right
• Canada May GDP 0.0% vs -0.2% expected
• US June core PCE 4.8% vs. 4.7% expected
• US Q2 employment cost index +1.3% vs +1.2% expected
• The JPY is the strongest while the CAD is the weakest as the NA session begins
• The seasonals were right: July on track to be best month since 2020. What about August?

The strongest to weakest of the major currency pairs

The USD is closing the day lower despite some higher than expected inflation measures at the start of the day. The Core PCE came in at 4.8% trend higher than the 4.7% expected. The employment cost index rose by 1.3% for the quarter which was also higher than the 1.2% expectations. University of Michigan consumer sentiment did rise from the preliminary tumble but was still scraping along historic low levels.

For the US dollar, although the greenback is ending the day as the weakest of the major currencies, initially move higher in the New York session before reversing lower as London/European traders look to exit for the day. Blame it on the month end trading. Overall for the. Month, the dollar was higher vs. the EUR but lower vs. all the other major currencies (the greenback was unchanged vs. the GBP).

So while the dollar was mostly lower this month, the US stock market was mostly higher with the major indices having their best month in 2022 and the S&P and NASDAQ having their best month since 2020.

For the day, the Dow industrial average rose 0.97%, the S&P increased by 1.42% and the NASDAQ index rose by 1.88% for the trading month, those indices had oversized gains of 6.73% for the Dow, 9.12% for the S&P, and 12.35% for the NASDAQ. Admittedly all 3 indices are still lower on the year by quite a bit (Dow down -9.3%, S&P -13.55%, NASDAQ down -20.91%), but the gains are easier on the way higher (off a low base).

In the US debt market, the yields today are ending with mixed results.

• 2 year yield 2.888%, +2.2 basis points
• 5 year yield 2.681%, -2.0 basis points
• 10 year yield 2.656%, -2.4 basis points
• 30 year yield 3.013%, -1.3 basis points

However, for the month yields are lower despite the Fed hiking by 75 basis points.

• 2 year yield closed the end of June at 2.957%. The current yield is 2.888%, down -6.9 basis points
• 5 year yield closed June at 3.040% and is trading at 2.681%, down -36 basis points
• 10 year yield closed June at 3.017% and is trading at 2.654%, down -37 basis points
• 30 year yield closed June at 3.183% and is trading at 3.01% for a decline of -17 basis point

In other markets:

• Gold is ending the day at $1765.34. That’s up $9.14 or 0.52%. Gold fell near -$42 this month but that is up from a low that took the price down $-126 at the July 21 low for the month
• Silver rose $0.32 or 1.6% to $20.32. That’s near unchanged on the month after declining to a low of $18.14 mid month
• Crude oil is ending up $1.88 or 1.95% at $98.30. For the month, the price is down $7.70 or -7.27%.
• Bitcoin is ending it’s Friday near $24,000 at $23,935. Although bitcoin still has 2 days of trading over the weekend, it is currently up around $4000 or 20.10% from its end of June closing level of $19,924

Thank you for your support and have a great weekend.

This article was written by Greg Michalowski at www.forexlive.com.

It is month end. During the month, the

• Fed rose by 75 basis points,
• ECB launched with a higher than expected 50 basis point hike.
• RBA raised by 50 BPS
• RBNZ raised by 50 BPS
• BOC raised by a surprise 100 BPS

The BOE did not have a rate meeting in July (they will meet on August 4). The BOJ kept policy unchanged when they met and are expected to stay that way going forward.

So how did the USD end the month?

The US dollar index rose modestly from the start to finish. Overall, the USD closed higher by about 1.16%. Of course that index is weighted more toward the EURUSD which saw the USD move up by about 2.58%. Other currencies saw the USD move lower. In fact, the dollar fell vs the JPY, CHF, CAD, AUD, and NZD. It was near unchanged vs the GBP.

What were the changes for the month for the other majors vs the greenback?

• EURUSD. -2.58%. As mentioned the EURUSD fell by -2.58% despite the higher than expected hike by the ECB.Of course they continue to feel the pinch from the Ukraine war and the shenanigans from Russia regarding the Nord stream 1 pipeline which has investor wary of the growth prospects although the GDP for the 2nd Q came in better than expected today.
• GBPUSD. Unchanged. The GBPUSD closed last month at 1.2178. The current price is at 1.2171, nearly unchanged on the month. During the month, PM Johnson resigned as PM. A new leader is between Rishi Sukan and Liz Truss with Truss the favorite
• USDJPY. -1.71% Despite the BOJ staying unchanged, and the USDJPY moving to a new high going back to 1998, the USDJPY is ending lower by -1.71% (dollar lower). The USDJPY closed at 135.75 last month and is trading at 133.32 today. The last two trading days has seen the pair move from positive to negative. The low for the month was reached today. Helping was lower US rates.
• USDCHF. -0.35%. The USDCHF closed last month at 0.9549. The currency pair is closing below that level at 0.9512 or down -0.35% USD lower). However in between June 30 and July 29, the price moved to a high price of 0.9886 reached around mid month on July 14, and has spent the next 11 trading days retracing those gains. Today’s move to the downside took the price to a new low for the month at 0.9501 and pushed the pair into negative territory.
• USDCAD. -0.61%. The USD moved lower vs the CAD by -0.61%. The pair closed on June 30 at 1.2874. The pair is currently trading at 1.2796. Today, the pair traded to the low for the month at 1.2788. In between the pair moved to a high of 1.3223 which was the highest level since November 2020 (reached on July 15) before rotating back to the downside and erasing all those gains and more.
• AUDUSD. -1.25%. The USD is ending the month lower vs the AUD by -1.25%. The AUDUSD closed on June 30 at 0.69046 and is trading currently at 0.6994. Lower rates and risk-on sentiment helped to push the pair higher (lower US dollar) over the last half of the trading month.
• NZDUSD: -0.79%. The USD fell by -0.79% vs the NZD this month. The pair closed at 0.6245 on June 30 and is currently trading at 0.6294. Like many of the other pairs, the USD moved higher first bottoming the NZDUSD at 0.6060 on July 14 before rallying into the month and. Today’s high price at 0.6329 was the high price for the month before settling back down at 0.6294. Like the AUDUSD, risk on sentiment/lower US rates helped the pair rally into month end (lower USD).

This article was written by Greg Michalowski at www.forexlive.com.

The major stock indices are ending with solid gains for the day:

• Dow industrial average rose 315.50 points or 0.97% at 32845.14
• S&P index rose 57.86 points or 1.42% at 4130.28
• NASDAQ index rose 228.10 points or 1.8% at 12390.70. That’s a largest increase cents April 2020
• Russell 2000 rose 12.20 points or 0.65% at 1885.23

For the trading month the average had their best month of the year:

• Dow industrial average rose 6.73%
• S&P index rose 9.12% which was the best month since November 2020
• NASDAQ index rose 12.35%.

For the trading week.

• Dow industrial average rose by 2.97%
• S&P index rose 4.26%
• NASDAQ index rose 4.7%

Some pretty good numbers for the day, week and month for the major indices. Moreover, the gains were made despite a 75 basis point hike and the earnings calendar.

This article was written by Greg Michalowski at www.forexlive.com.

EURUSD trades back above the 100/200 hour MA.

The EURUSD is trading near the last Friday closing level of 1.1213. The current price is moving to an afternoon high at 1.0219

In the US session the price moved down to a low at 1.01448. That was within a lower swing area between 1.0140 to 1.1054 (see red numbered circles).

The rebound back above the 100 and 200 hour MAs, saw a retest of the 100 hour MA before moving back higher in the NY afternoon session.

On the topside, this week, the high was on Monday at 1.0257. That was short of the 50% midpoint of the move down from the June 27 high. Not being able to get above that key target, sent the pair lower and below the 50% of the move up from the July 14 low at 1.01129 on Tuesday and Wednesday. However, after moving back above the 50% also on Wednesday (FOMC 75 BP hike day), the low yesterday found support buyers at the 50% again.

The buyers and sellers continue to battle. The range over the last 9 trading days is from 1.0095 to 1.02074 with lots of ups and downs.

The battle will continue to rage next week. Traders will continue to lean against the highs and lows, perhaps the moving averages, and other swing levels where risk can be defined and limited.

This article was written by Greg Michalowski at www.forexlive.com.

• But inflation will stay high until the end of 2022
• Inflation should go down in 2023
• French economic fundamentals are solid

He’s speaking after the Q2 GDP and July CPI data earlier today. The former was a welcome comfort for the French economy, although the details are less rosy with domestic demand stagnating and household consumption actually shrinking during the quarter. Meanwhile, the latter reaffirmed another record inflation reading for France – so not exactly the peak just yet.

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

Bitcoin
closed Thursday near $24,000, retesting that area after a failed attempt to
climb higher in the middle of last week. The first cryptocurrency has added
3.8% over 24 hours, about as much as it has gained in the past seven days.
Ethereum has added 4.8% in 24 hours, to $1720. Altcoins from the top 10 gained
between 3.8% (BNB) and 10% (Solana).

The total
capitalisation of the crypto market, according to CoinMarketCap, rose by 3.8%
to $1.1 trillion overnight.

Bitcoin has
closed above its 50-day moving average for two days. Closing the week above
22,700 would be a telling return to territory above the 200-week moving
average.

Such a
technical disposition could inspire retail buyers. Other factors are at work
for institutionalists, notably a recovery in demand for risky assets and a
pullback of the dollar from multi-year highs.

However, the
longer-term and whole picture is working against the buyers. As long as we see
tightening monetary and economic conditions, the crypto market has to move
against the tide. In addition, Guggenheim Partners‘ widely held view remains
that the industry has not yet been „cleared“ of distressed
participants. Crypto will be in trouble long-term because of regulatory
pressure and a lack of strong institutional support.

According to
the IMF, the cryptocurrency market will fall if the economy goes into
recession. Preliminary US GDP data released on Thursday confirmed the start of
a technical recession in the country.

The UK has
suggested that cryptocurrencies be treated as a new type of property, making it
much easier to protect investors in this instrument.

This article was written by FxPro’s Senior Market Analyst Alex
Kuptsikevich.

This article was written by FxPro FXPro at www.forexlive.com.

• US is not in a recession
• Inflation needs to be addressed
• Fed is going to have to do more with interest rates
• Details depend on data flow in the coming months
• Rate hikes could hurt job growth but so far, there is still momentum in hiring

He also voiced out concerns that recession fears could be self-fulfilling. He’s not exactly wrong in that sense but I mean there is no doubt that the economic numbers from the US have been rather poor. It is a bit arrogant to outright dismiss a recession but I don’t think that is all too important for markets. It is all about what the Fed will do and while more rate hikes are to follow, Bostic is following in Powell’s lead to stress on data dependency.

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

The greenback has pared losses against the euro, pound, loonie, aussie and kiwi on the session now, trailing just behind the yen and franc. Even then, the dollar has moved off earlier lows and is actually posting slight gains against the pound and loonie notably. This comes as Treasury yields pull higher after a bit of a drop earlier, with 10-year yields now back up by over 4 bps to 2.72%:

Now, it is still early in the day and a technical breakdown in yields could still yet materialise. But for now, there is some apprehension and dollar bulls are making full use of that sentiment.

EUR/USD is back to near unchanged around 1.0200 with large expiries seen at 1.0200-05 as well as 1.0245-50 – which has pretty much been the range in European morning trade.

Meanwhile, GBP/USD has stumbled from a high of 1.2245 to 1.2150 now, falling back below the 50.0 Fib retracement level at 1.2213. That will be a key level to watch ahead of the daily close.

USD/CAD is also trading back up by 0.2% to 1.2830 now after having slipped to a low of 1.2790 earlier. And we have AUD/USD turning flat at 0.6985 after having hit a high of 0.7030 at the start of the session, now keeping back below the key 0.7000 handle.

I highlighted key levels on the charts earlier here and they are still very much in play.

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

• Closely watching FX moves with a sense of urgency

These are similar comments to when the Japanese yen tumbled and even with the pullback this week, it hasn’t really amounted to much in the bigger picture. USD/JPY is still down 0.7% to 133.30 with the low earlier touching 132.50 and from a technical perspective, sellers still look poised to try and push the agenda towards 132.00 for now.

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

• Prior +7.6%
• CPI +0.9% vs +0.6% m/m expected
• Prior +0.1%
• HICP +8.5% vs +8.1% y/y expected
• Prior +8.2%
• HICP +0.8% vs +0.4% m/m expected
• Prior -0.1%

The state readings earlier were mixed but evidently, the rise in consumer inflation in Germany’s industrial state outweighed the drop in annual inflation elsewhere. That’s not a comfortable set of figures with the EU-harmonised reading just short of the May high of 8.7% y/y. The increase in the monthly figures is also disconcerting as there will likely be a further spike come September once government subsidies expiries on 31 August.

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