- US August S&P Global services flash PMI 51.0 vs 52.2 expected
- June Canada retail sales +0.1% vs +0.0% expected
- US July new home sales 714K vs 705K expected
- US non-farm payrolls benchmark revisions take 306K from March 2023 level of employment
- Eurozone August flash consumer confidence -16.0 vs -14.3 expected
- Wagner leader Yevgeny Prigozhin killed in a plane crash
- US Treasury auctions of $16B of 20 year bonds at a high yield of 4.499%
- US EIA weekly oil inventories -6135K vs -2850 expected
Markets:
- Gold up $19 to $1916
- US 10-year yields down 14 bps to 4.19%
- WTI crude oil down $1.08 to $78.55
- S&P 500 up 51 points to 4449
- AUD leads, GBP lags
Do any of these moves matter ahead of NVDA earnings? I don't know but I haven't seen an earnings released this hyped up in a long time.
Under the surface, the market cheered a soft US PMI from S&P Global. That's a good forward-looking metric of the market and showed a surprise decline in an indication that Fed hikes are working. It also demonstrates that bad news is good news for risk assets on the assumption the Fed is done hiking and will cut by around 100 bps next year. The risk is that Powell pushes back against that on Friday (though the market simply may not believe him).
In any case, the dollar fell steadily after the data, which matched soft PMIs in the UK and Eurozone. Oil fell on the data but USD/CAD reversed from 1.3600 to 1.3535 anyway as the risk trade won out.
The plane crash of Prigozhin confirmed many suspicions about what would happen to the leader of the mutiny against Putin and now we await any potential fallout. For broader markets though, it was more of a curiosity than a reason to make trades.
