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.