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HSBC’s Global Private Banking chief investment officer has expressed a positive view on most Asian equities for the balance of the year.

Says that Asia remains the most important growth engine of the global economy, citing both GDP and earnings growth for Asia ex-Japan (for 2024):

• 4.6% and 23% respectiveely

Overweight:

• equities in Japan, India, South Korea

Neutral:

• Hong Kong & mainland China

China’s debt-ridden property sector remains a heavy weight

This article was written by Eamonn Sheridan at www.forexlive.com.

• McDonald’s says business slowed ‘meaningfully’ in the majority of markets
• Dallas Fed July manufacturing survey -17.5 vs -15.1 prior
• Treasury says it will borrow $740 billion in Q3
• UK Chancellor: We have inherited overspending of £22 bilion, not to act isn’t an option
• Hurricane season might pick up later this week
• FBI: Motive still not clear in Trump shooting, no evidence of co-conspirators
• UK July CBI retailing reported sales -43 vs -24 prior

Markets:

• Gold down $2 to $2383
• US 10-year yields down 2.6 bps to 4.17%
• S&P 500 up 0.1%
• WTI crude oil down $1.27 to $75.89
• USD leads, NZD lags

Monday’s was something of a slower start to what will be an action-packed week in
financial markets. Newsflow was light but it will rapidly pick up from now through Friday’s non-farm payrolls report.

The FX market started US trade with some life as the dollar strengthened into a backdrop of declining risk assets, even as Treasury yields declined. The S&P 500 had traded 1% higher shortly after the open but gave it all back and bitcoin slumped to $67K after tagging $70K. Oil fell once again and gold prices briefly sank to $2370 before bouncing.

The dollar made strong moves against the euro (down to 1.0804) and the commodity currencies but that price action reversed after the London fix in a sign that month-end flows were the driver. The euro climbed up to 1.0823.

The UK fiscal situation was in focus and that led to some GBP selling early on rumours of a capital gains tax hike. However the new chancellor didn’t offer much in the way of specifics except to say that the coffers were empty and that everything is on the table in an Oct 30 budget. The main thrust appears to be some austerity and that was enough to reverse some GBP losses.

The yen mostly traded sideways while the commodity currencies tracked the risk trade lower.

This article was written by Adam Button at www.forexlive.com.

The major stock indices are ending the day mixed.

Dow is down marginally. The S&P and Nasdaq closed marginally higher. Russell 2000 is not so lucky as it falls 1% on the day.

The final numbers are showing:

• Dow Industrial Average fell -40.21 points or -0.12% at 40540.12
• S&P index rose 4.46 points or 0.08% at 5463.55
• NASDAQ index rose 12.32 points or 0.07% at 17370.20

The small-cap Russell 2000 fell -24.73 points or -1.09% at 2235.33

This week, four of the seven Mag 7 will be announcing earnings starting with Microsoft after the close tomorrow. On Wednesday after the close (and the FOMC rate decision), Meta Platforms will report. On Thursday Amazon and Apple will report after the close.

Today:

• Microsoft rose $1.46 or 0.34%
• Meta Platforms closed unchanged
• Amazon rose $0.70 or 0.38%
• Apple rose $0.28 or 0.13%

The summary of earnings for the week shows:

Tuesday

• Before the open: SoFi, Pfizer, PayPal, BP, P&G, Corning, Merck
• After close: AMD, Microsoft, Starbucks, Pinterest

Wednesday

• Before the open: Boeing, Kraft Heinz, Altria
• After close: Meta (Facebook), Qualcomm, Carvana, Lam Research, Western Digital

Thursday

• Before the open: Moderna, ConocoPhillips, Wayfair, SiriusXM
• After close: Amazon, Apple, Intel, Coinbase, DraftKings

Friday

• Before the open: ExxonMobil, Chevron, Frontier Communications

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

The data due from Japan and Australia today are not the focus. For Japan its on the Bank of Japan meeting today and tomorrow:

• Japanese yen stays in the spotlight with the BOJ coming up later this week

For Australia it’s the CPI data due on Wednesday, July 31, 2024:

• Australian CPI data due this week, a key critical input to next RBA interest rate deciison

This snapshot from the ForexLive economic data calendar, access it here.

The times in the left-most column are GMT.

The numbers in the right-most column are the ‘prior’ (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.

This article was written by Eamonn Sheridan at www.forexlive.com.

Good morning, afternoon and evening all. Any charts, technical analysis, trade ideas, thoughts, views, ForexLive traders would like to share and discuss with fellow ForexLive traders, please do so:

This article was written by Eamonn Sheridan at www.forexlive.com.

The US Treasury said it expects to borrow $740 billion in Q3, which is much lower than the $847 billion estimate from April.

That’s due to a higher cash balance at the beginning of the quarter and lower redemptions in the Fed’s SOMA market. It assumes a cash balance at the end of this quarter of $565 billion.

The Treasury also announced it expected to borrow $565 billion.

US 10-year yields have fallen 1.2 bps since the announcement to 4.168%.

This article was written by Adam Button at www.forexlive.com.

• Prior was -15.1

Details:

• General business activity -17.5 vs -15.1 prior
• Company outlook -18.4 vs -6.9 prior
• Prices paid +23.1 vs +21.5 prior
• New orders -12.8 vs -1.3 prior
• Shipments -16.3 vs +2.8 prior
• Employment +7.1 vs -2.9 prior

Overall, the details and the commentary are notably worse than the headline.

I wonder if Hurricane Beryl affected some of these numbers because they’re not great. At the same time, for this week’s non-farm payrolls report, we could also see hurricane effects.

Comments in the report:

Food manufacturing

• We have seen a more stable market over the last six months for
  our products (which is primarily dinner sausage). Nielsen data for our
  category show small-to-moderate growth over the last 52 weeks, and our
  market share is growing in our core markets. This is leading to a more
  predictable environment for our company. Wages increased this month due
  to merit increases that we gave our team at the beginning of our fiscal
  year, which is July.
• The business environment feels stable, but beef prices continue
  to increase beyond typical seasonality due to supply constraints.
• The destabilization of our country and the politicization of things continue to impact our business.

Paper manufacturing

• Activity has slowed down, but we anticipate an uptick soon.

Printing and related support activities

• We have slowed down some from our very hectic pace of activity
  in late spring and through June. We hear about lots of slowness in our
  industry, but we continue to be pretty busy, mainly with larger jobs but
  then also with other smaller ones. We have a very large capital
  purchase machine arriving in early October. We are hopeful that the
  Federal Reserve will have a rate cut and that general business activity
  will pick up. We are actually seeing some reduction in prices and are
  hopeful we will not need to raise prices next year.

Fabricated metal product manufacturing

• Hurricane damage and power outages have decreased production.
• Customer demand is the overriding concern. Decreased credit
  availability and affordability for the markets we sell into have all
  but stopped demand. I estimate we are operating at 30–40 percent
  capacity.
• Order volume continues to see small declines. Inefficiencies in
  the short term will require staffing adjustments over the next few
  months to align with the new lower baseline. There is no major change
  to our long-term outlook; we are still viewing the current pullback as
  temporary, and we maintain a positive outlook beyond the next 12–24
  months.

Machinery manufacturing

• Elections [are an issue affecting our business].
• Business activity is horrible, and we are seeing no signs of improvement.
• Inquiries and orders activity has seemingly halted. The brakes
  are on. This is pretty common in presidential election years, but this
  comes at a time when things were already volatile due to price
  pressures and massive inflationary pressures.
• At this point, we’re just hoping for a favorable election
  outcome and looking forward to 2025. The summer doldrums have hit hard
  and would appear to be unrelenting with respect to what we see in our
  crystal ball. We have some small jobs to complete, and we’re searching
  wider and further for new work, but we have yet to strike gold.

Computer and electronic product manufacturing

• Many customers are holding off on expenditures as well as
  allowing for cost-of-living adjustments to prices. The market continues
  to be soft, and with uncertainty in the election year, even our federal
  business is a bit stagnant.
• We need lower interest rates, so end customers resume buying capital equipment again.
• We typically see weakness in presidential election years as
  companies sort through uncertainty or slow down during those periods.
  With the recent events involving both presumed candidates, that
  uncertainty has increased, which makes it very difficult to guess what
  might happen. Our business is likely to be impacted by tariff policies
  in a negative way because some projects potentially will go away
  entirely. For businesses we serve that ship to other countries, we have
  already lost sales because it is more affordable to build those
  products outside the U.S. for consumption outside the U.S. That was not
  the case before tariffs entered the equation. We were able to build
  products for shipment to other parts of the globe. Both [political]
  parties have shown a willingness to maintain and increase tariffs, which
  could negatively impact our sales.
• We are expecting to see stronger signs of a cyclical recovery
  in industrial and automotive markets, which have not materialized, yet.
  This is leading to higher uncertainty that the recovery may be delayed
  or muted.

Transportation equipment manufacturing

• While we still have a large order backlog, new orders are
  significantly below where we forecasted them to be this year. This will
  shorten lead times and should allow us to pick up additional orders
  next year.

Miscellaneous manufacturing

• Customer demand is softening. We are also experiencing increasing unfair competition directly from China.
• Due to the hurricane and not having power for over a week, we had significant lost production hours.

This article was written by Adam Button at www.forexlive.com.

It’s a big week for central banks as decisions from the BOJ, Fed and BOE come back-to-back-to-back in a 32-hour span starting early Wednesday in Japan (late Tuesday in the US).

Mechanically, the most-uncertain is the Bank of Japan, which hasn’t clearly signaled what it will do. The market is pricing in a 61% chance of a 10 basis point hike and a 39% chance of no move. If the BOJ disappoints, the recent strength in the yen could quickly unwind.

Next will be the Fed at 2 pm ET on Wednesday. The market is down to pricing in just a 5% chance of a cut after briefly flirting with a surprise move earlier this month. The big question is whether the Fed will signal a September move, or how aggressively it will be signalled. I tend to think they will be non-committal given all the data between now and September 18.

Finally, the Bank of England has left the market guessing with pricing now at 59% for a cut and 41% for a hold. It would be the first move of the cycle and run against some recent commentary from Bailey suggesting the UK inflation and wage dynamics are different from other advanced economies.

This article was written by Adam Button at www.forexlive.com.

Closing changes:

• Stoxx 600 -0.2%
• German DAX -0.5%
• UK FTSE 100 +0.1%
• French CAC -0.9%
• Italy MIB -0.5%
• Spain IBEX -0.4%

European stocks opened at the best levels of the day but steadily deteriorated, particularly in the final 90 minutes of trading.

This article was written by Adam Button at www.forexlive.com.

Gold is at the lows of the day in a worsening selloff that has it down $14 to $2372. It was trading higher on the day until about an hour ago when the broader risk trade began to deteriorate.

Zooming out, gold’s run above $2450 increasingly looks like a failure as a series of lower highs has followed. It’s also increasingly clear that gold is a risk-sensitive trade at these levels. Today’s backdrop certainly hasn’t helped as a 1% rally in the S&P 500 has been erased.

However the mood could turn after the wave of tech earnings this week removes a source of angst.

This article was written by Adam Button at www.forexlive.com.

The post Ex-Dividend 30/07/2024 first appeared on IC Markets | Official Blog.

The risk mood is deteriorating across the board, leading to some US dollar bids, though some of that has reversed into the London fix.

In the bigger picture, the mood is darkening with the S&P 500 now slightly negative after rising by 1% earlier. European stocks are also on the low, bitcoin is under pressure and WTI crude is down $1.19 to $75.97.

Treasury yields are mostly steady but have climbed from the lows of the day. Ten-year yields fell as low as 4.15% but have risen to 4.18%, though still down a couple basis points on the day.

EUR/USD tried 1.0800 but couldn’t get through and has risen 20 pips through the fix.

This article was written by Adam Button at www.forexlive.com.