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The changes among dollar pairs are relatively light, with USD/JPY continuing to stay in focus amid the volatility and swings. The pair dipped towards 152.00 in trading yesterday before recovering back to 153.70-80 levels currently. There were some light swings in Asia and one can expect more before the close today.

In terms of data, there won’t be much in Europe to shake up market sentiment. All eyes instead will turn towards the US PCE price index later in the day.

Besides that, investors will stay fixated on how equities are going to fare once more. There was much volatility in Wall Street yesterday but tech shares ended up worse off once again. On the week itself, the S&P 500 is down nearly 2% and the Nasdaq down a little over 3%. Both are eyeing a potential push towards their respective 100-day moving averages.

In the meantime, we are likely be in store for a more pensive session in Europe today. There’s only one minor release on the agenda as seen below.

0645 GMT – France July consumer confidence

That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.

This article was written by Justin Low at www.forexlive.com.

• US inflation (PCE) data due Friday – here are the critical ranges to watch
• US military is building infrastructure in northern Australia – wary of a China crisis
• Bank of Japan meet next week, a 0.1% rate hike is around 65% priced
• The RBNZ’s guide for members of its Monetary Policy Committee (MPC) – link to full text
• Goldman Sachs forecast Friday’s data, June Core PCE Price Index at 0.2% m/m and 2.6% y/y
• PBOC sets USD/ CNY reference rate for today at 7.1270 (vs. estimate at 7.2229)
• Singapore central bank says no change to S$NEER policy band, as expected
• Goldman Sachs say still forecast a Brent range of USD75 – 90
• Japan’s Kanda says told G20 that excessive FX volatility has negative impact on economy
• Tokyo area July inflation data: Headline 2.2% y/y (prior 2.3%)
• Citi outline bearish and bullish risks for oil under Trump
• Bank of America says strong economic growth in the US means the FOMC ‘can afford to wait’
• Morgan Stanley says stock rotation turned in deleveraging, eye US$45bn to sell
• New Zealand July consumer confidence 87.9 (prior 83.2)
• US inflation data due on Friday – upside risks
• UK fin min Reeves promises to fix the ‘fiscal mess’
• Forexlive Americas FX news wrap 25 Jul:The USDJPY falls to lowest level since May,&bounces
• Decline in US Stocks Continues, Tech Giants Witness Major Losses
• Yellen says market should determine exchange rates
• EURUSD keeping the short term bearish bias heading toward the new day.
• Trade ideas thread – Friday, 26 July, insightful charts, technical analysis, ideas

Yen
crosses still had some gyration but nothing like what we saw earlier
this week. USD/JPY traded early to lows under 153.50, recovered to
above 154.00 before dipping back to lows and, as I update, is sitting
under 154.00. Kanda made some comments, nothing dramatic – in the
bullets above.

EUR,
AUD, GBP, and gold all rallied against the US dollar (ranges were not
large). GBP, NZD and CAD were mainly sideways. The People’s Bank of
China set the CNY a little stronger at its reference rate today.

News
flow was very light. In US politics Trump, through his campaign team,
has refused to debate Harris until she becomes the official nominee.
This didn’t stop the Biden / Trump debate, so it’s a bit of a
mystery.

In
data we had an improved consumer confidence survey from New Zealand,
but still in pessimistic territory. Tokyo inflation data was
mixed, not sending conclusive signals on any wage-push inflation the
BoJ is keen to see.

AUD not too convincing, but some stability.

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

Info via Reuters:

• As northern Australia re-emerges as a strategically vital Indo-Pacific location amid rising tensions with China, the United States has quietly begun constructing hundreds of millions of dollars’ worth of facilities there to support B-52 bombers, F-22 stealth fighters, and refuelling and transport aircraft
• part of a larger effort to distribute U.S. forces around the region and make them less vulnerable.

More at that link above.

Darwin is north of Tindall base. Both mentioned in the article.

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

Via the Wall Street Journal, a summary of forecasts from investment banks and others:

I’ll have the ranges to be aware of posted soon.

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

Volatility Rises Again in Markets – Nasdaq Down 0.9%

It was another volatile day in financial markets yesterday as risk sentiment continued to take a hit before a higher US GDP print came through with a bit of stability. US tech stocks were again hit with both the Nasdaq and S&P losing ground on the day, down 0.93% and 0.51% respectively, whilst the Dow pushed 0.22% higher. US treasury yields again saw a disparity between the long and short dated bonds, but widening the gap again this time, the 2-year gaining 2.5 basis points up to 4.441% and the 10-year dropping 2.8 basis points to 4.258%. Oil prices pushed higher again, Brent adding 0.81% to trade up to $82.37 a barrel and WTI gaining 0.89% to move back to $78.28 a barrel. Gold again saw big profit taking flows and lost 1.8% on the day to close at $2,355.

Aussie in Free Fall as Risk Sentiment is Hit

All the talk this week in the FX world has been about the Yen, but those trading the Aussie dollar have had a rough time of it as well. The Aussie has dropped over 4% against the big dollar since it hit multi-month highs on July 11, and it has taken an even bigger hit against the Yen losing over 9% from the same data. There has been little in the way of respite on the way down and any brief rallies have been hit hard with the usual exporter flow doing little to stem the tide. The move has coincided with a drop across commodities and until we see a change in commodity’s outlook or indeed the global risk story, the traders are anticipating more downside the currency. Support now comes in on the overnight low around 0.6510 with longer term support all the way down at 0.6420 and resistance now sits with the 200-day moving average at 0.6660.

Another Busy Day is Set to Close the Trading Week

It was another rollercoaster trading day yesterday with volatility hitting all markets and it doesn’t look like stopping in the last three sessions of the week. Inflation data is set to dominate market focus today with key updates due out of Tokyo and the US. We are due to have the latest Tokyo CPI numbers out early in the Asian session but the real focus for the day will come once New York opens and we have the latest update on the Fed’s favoured inflation metric, the Core PCE Price Index. Expectation is for a 0.2% increase and anything significantly off this print will see more moves in the market. The revised University of Michigan Consumer Sentiment and Inflation Expectations are also due out and traders will keep a wary eye on any updates from the latest G20 meeting that kicks off in Rio de Janeiro.

The post General Market Analysis 26/07/2024 first appeared on IC Markets | Official Blog.

No fresh news nor other catalysts/ The yen is trading in an an illiquid fashion following its wild swings.

Earlier:

• Japan’s Kanda says told G20 that excessive FX volatility has negative impact on economy
• Tokyo area July inflation data: Headline 2.2% y/y (prior 2.3%)
• USD/JPY on the move in early Asia

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

Reuters reporting remarks from Goldman Sachs:

• Estimates a peak hit to 2025 oil prices of $11/bbl as a result of
  weaker GDP and oil demand in scenario where US imposes
  across-the-board tariff of 10% on goods imports
• We still forecast a
  $75-90 range for Brent given our base cases of trend-like growth in
  GDP and oil demand (under steady US policies), and OPEC+ market
  balancing”
• “The next US
  president will have limited tools to significantly boost 2025 oil
  supply”

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

Kanda is in Brazil for the meeting of central bankers and finance ministers from Group of 20 nations.

• says told G20 that excessive FX volatility has negative impact on economy
• chance of a soft landing for the global economy increasing

• told G20 need to respond appropriately in markets based on group’s fx
  agreement
• told G20 must be
  increasingly vigilant to excessive, speculative fx fluctuation

–

Japan’s Finance Ministry’s Vice Finance Minister for International Affairs Kanda. He is the official who will instruct the BOJ to intervene, when he judges it necessary. Often referred to as Japan’s ‘top currency diplomat’.

Atsushi Mimura takes over from Kanda on July 31, following the meeting of the Group of 20 finance ministers and central bank governors in Rio de Janeiro from July 25.

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

Tokyo CPI for July 2024

Excluding Fresh Food & Energy 1.5% y/y

• expected 1.6%, prior 1.8%

Excluding Fresh Food 2.2% y/y

• expected 2.2%, prior 2.1%

Headline CPI 2.2%

• expected 2.3%, prior 2.3%

****

Tokyo area inflation data:

• National-level CPI data for this month will follow in about three weeks, it takes longer to gather and collate the national data.
• Tokyo CPI is a sub-index of the national CPI
• It measures the change in prices of goods and services in the Tokyo metropolitan area
• Its considered a leading indicator of national CPI trends because Tokyo is the largest city in Japan and is a major economic hub
• Historically, Tokyo CPI data has been just slightly higher than national Japan CPI data. The cost of living in Tokyo is a touch higher than in most other parts of Japan. Higher rents, for example

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

USD/JPY and yen crosses have dropped. Its only just after 8am in Tokyo and already we are down nearly 50 or so points in USD/JPY.

There is no fresh news nor data. USD/JPY don;t need nothing to get moving!

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

Reuters have the piece from a Citi report on politics / oil.

In brief:

Trump presidency could be net bearish for oil prices

• combination of factors including tariffs and oil-friendly policies, and pushing the Organization of the Petroleum Exporting Countries and allies (OPEC+) to release more oil into the market

The main bullish risk for oil markets under a Trump presidency would be would be pressure on Iran, though this could have a limited impact.

• a “maximum pressure” campaign on Iran, the market could see a 500-900 thousand barrel per day impact on Iranian oil exports

—

More immediately, Citi enumerate known risks:

• hurricane season is far from over
• Mideast tensions remain high … pressure has also been mounting for a push for a ceasefire, which could conceivably be forthcoming this summer

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