- US major indices close lower for the 3rd consecutive day
- What are the technicals that are driving the FX markets heading into the new trading day?
- WTI crude oil futures settle at $91.64
- White House press secretary: White House expects jobs numbers to cool a bit
- ECB's Wunsche: Have to move quickly on rate hikes to a level that may be restrictive
- ECB's Nagel: ECB must act decisively to preserve credibility
- ECB's Stournaras: Will see peak of inflation this year
- Major European indices are closing mixed for the day
- Fed's Williams: Inflation is still way too high
- Fed's Bostic: Slowing inflation may give us a reason to slow interest rate hikes
- ECB Muller (more of a hawk): ECB should discuss 75 basis point hike in September
- JOLTs job openings for July 11.239M vs 10.45M estimate
- US consumer confidence for August 103.2 vs. 97.7 estimate
- Geopolitical: Taiwan military fired warning shots for 1st time at Chinese drone
- France's Finance Minister: We need to prepare for a hard winter with less gas available
- Case Shiller home price index rises 0.4% MoM and 18.6% vs 19.5% estimate
- More from Fed's Barkin: Interest rates will need to be restrictive
- ECB's Knot leaning toward 75 basis points but open for discussion
- Canada current account for Q2 2.69B vs 6.6 billion estimate
- Fed's Barkin: I don't expect inflation to come down predictably
- The AUD is the strongest and the CHF is the weakest as the NA session begins
- Germany August preliminary CPI 7.9% vs 7.8% y/y expected
- ECB's Knot: Frontloading of rate hikes should not be excluded
- ForexLive European FX news wrap: Dollar retreats, equities bounce
With the markets anxious about potential higher inflation, the JOLTs job openings gave a jolt to the markets when they rose back up to 11.239M which was way higher than the 10.45M estimate. Consumer confidence also moved up smartly (albeit from low levels). The data sent stocks moving lower, yields higher and the USD back up after opening the day as one of the weakest of the major currencies.
Looking at the strongest to the weakest, the EUR was the only currency that outgained the greenback on the day. The dollar rose the most vs the AUD, CAD and CHF with gains of 0.59% to 0.67% against those currencies. The dollar fell -0.26% vs the EUR, while it was near unchanged vs the JPY.
The EUR was influenced by central bank commentary today that did not rule out a 75 basis point hike at the next ECB rate meeting next Friday. ECB's Knot, Muller, Stournaras, Nagel and Wunsch all spoke.
In the US, Fed regional governor got behind the Fed Chair with similar comments today. Fed's Bostic, Williams and Barkin spoke supporting the idea that the Fed needs to push rates to restrictive and fight inflation to the end.
Toward the end of the day, I did a video outlining the key technical levels in play going into the new trading day along with the technical bias for each currency vs. the US dollar:
In the US equity markets, the major indices fell for the 3rd consecutive day declines were +/- 1%:
- Dow industrial average fell -0.96%
- S&P index fell -1.1%
- NASDAQ index fell -1.2%
- the Russell 2000 of small-cap stocks was the worst performer at -1.45%
In the US debt market today, yields are ending the day mixed with the 2 year leading the way once again. The 2 year yield is at the highest level since the 2007:
- 2 year 3.454%, +2.5 basis points
- 5 year 3.27%, +1.4 basis points
- 10 year 3.108%, unchanged
- 30 year yield 3.226%, -1.7 basis points
At the start of the New York session, the 10 and 5 year yields were down -3.9 basis points.
A look around the other markets shows:
- spot gold fell $12.70 or -0.73% to $1724.18
- spot silver fell $-0.32 are -1.7% to $18.42
- WTI crude oil futures are trading down $-4.74 and $92.27
- The price bitcoin is trading just above the $20,000 level at $20,018
