August 20, 2024 at 12:25PM
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.
