Articles

• European Central Bank speakers on Wednesday include de Guindos, Lane and Buch
• Australia Q2 CPI preview – “June CPI should not close the door on a rate cut”
• Earnings results update 23 July 2024 (AMC)
• NZD/USD, AUD/USD extend their dribbling losses
• PBOC sets USD/ CNY mid-point today at 7.1358 (vs. estimate at 7.2795)
• USD/JPY drops to a fresh low for the session, under 155.40
• All analysts surveyed expect the Bank of Canada to cut by 25bp today, Wednesday, July 24
• Japan flash PMIs (July): Manufacturing 49.2 (prior 50.0) Services 53.9 (prior 49.4)
• Musk: “I am not donating $45 million a month to Trump.”
• UK data shows continued strong wage growth
• Australian flash PMI (July): Manufacturing 47.4 (prior 47.2) Services 50.8 (prior 51.2)
• MUFG warn that the yen could turn back around again and fall – eyes on BOJ
• Five factors that will drive global equites higher still in H2 of 2024
• Deputy PM Novak: Russia cut oil production in July, nearly to OPEC agreed target level
• Forexlive Americas FX news wrap 23 Jul: USD continues fall vs JPY, but rises vs other CCYs
• ICYMI – European Central Bank Chief Economist Lane spoke Tuesday – nothing for traders
• Oil: Private survey of inventory shows headline crude oil draw larger than expected
• US stocks close lower ahead of Tesla and Alphabet earnings
• GBPJPY reverses June/early July surge and follows similar technical tools. Watch and learn
• Trade ideas thread – Wednesday, 24 July, insightful charts, technical analysis, ideas

USD/JPY
swung around during the session without fresh catalysts. The slide
during Tuesday retraced a little, with a rally to just shy of 156.00
before a quick sell off towards 155.20. There was some data from
Japan today, but it was the lower-tier flash PMIs. Volatility for yen
crosses will persist and will likely intensify into next week and the
Bank of Japan meeting.

Elsewhere
the USD remained bid. EUR, GBP, AUD, NZD, CAD all fell away against
the big dollar. Again, there were no fresh catalysts.

News
and data flow were light.

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

Based on the earnings results of companies reporting on 23 July 2024 (AMC), here’s a summary focusing on the moves made by these companies and their possible impact on the overall market indices such as SPX and NDX. Emphasis is placed on the most popular companies and brands that are likely to influence market sentiment.

Highlights of most popular companies that have reported their quarterly earnings:

• Tesla (TSLA)

  • Move: -7.8%
  • Market Cap: $785.8B
  • Impact: Tesla is a highly popular and influential company, especially among retail investors. The significant negative move is likely to contribute to a bearish sentiment in the market. 😟

• Alphabet (GOOG/GOOGL)

  • Move: -2.2% each
  • Market Cap: $2.3T and $2.2T respectively
  • Impact: Alphabet’s slight negative move, despite its massive market cap, suggests a moderate bearish influence. As a household name, its performance can heavily sway investor sentiment. 😕

• Visa (V)

  • Move: -3.3%
  • Market Cap: $533.2B
  • Impact: Visa is another popular company, and its negative movement adds to the bearish outlook. Its substantial market cap means this move will have a noticeable impact on market indices. 😟

Other notable movers:

• Texas Instruments (TXN)

  • Move: +3.0%
  • Market Cap: $180.5B
  • Impact: A positive move from a well-known tech company like Texas Instruments is a bullish indicator, though it may be overshadowed by the larger market caps of Tesla and Alphabet. 😊

• Seagate Tech Holdings (STX)

  • Move: +5.9%
  • Market Cap: $11.9B
  • Impact: While a strong positive move, Seagate’s smaller market cap means its overall influence on the indices is less significant. 😊

• Manhattan Associates (MANH)

  • Move: +8.4%
  • Market Cap: $13.9B
  • Impact: A significant positive move but with a smaller market cap, its influence is limited compared to larger companies. 😃

Overall market cap weighted trend:

1. Negative Influence:

   • Tesla (TSLA): The substantial drop of -7.8% from a large market cap company ($785.8B) indicates bearish pressure.
   • Alphabet (GOOG/GOOGL): Despite having a very large market cap, the minor drop of -2.2% from both classes indicates a moderate bearish sentiment.
   • Visa (V): The drop of -3.3% further reinforces the bearish sentiment.

2. Positive Influence:

   • Texas Instruments (TXN): A significant positive move of +3.0% from a company with a substantial market cap ($180.5B) suggests a bullish sentiment.
   • Seagate Tech Holdings (STX): A strong positive move of +5.9% adds to the bullish outlook but is limited by its smaller market cap.

3. Overall Sentiment:

   • The combined effect of these movements, weighted by their market caps, suggests a predominantly bearish outlook. The significant negative impact from Tesla, Alphabet, and Visa is likely to outweigh the positive impacts from companies like Texas Instruments and Seagate.

Expected directional bias for the stock market for tommorrow, 24 July 2024:

• Bearish: Given the significant negative impact from high market cap and popular companies like Tesla, Alphabet, and Visa, the overall market indices (SPX and NDX) are expected to trend bearish in the next trading session. The influence of these household names is likely to sway retail investor sentiment towards a more cautious or pessimistic outlook. 📉 Do note that this is a simplistic view of a complex stock market and its drivers as we look only at earnings. However, as you probably know, quartely earnings are typically a primary and successful driver of stock market forecasts.

So, for tommorrow, investors and traders should prepare for a potentially volatile market with a bearish bias, adjusting their strategies accordingly based on the performance of these influential companies and the overall market sentiment derived from these earnings reports. Always do more of your own research, always trade at your own risk, and visit ForexLive.com for additional views.

This article was written by Itai Levitan at www.forexlive.com.

JPY lower, AUD & NZD too.

Not helped by a weak fix for CNY (lowest from the onshore yuan since November 21 last year).

The outlook for the NZD includes the potential for a Reserve Bank of New Zealand rate cut by perhaps the end of this year. New Zealand’s economy has slumped badly and the RBNZ is looking for excuses to cut (IMO).

On AUD, I noted yesterday the news that one of Australia’s ‘big four’ lenders, the National Australia Bank, had cut its fixed rate (3 years) mortgage by 60bps. This has raised the chatter of an RBA rate cut sooner rather than later (most estimates are near towards the end of this year). I should add the caveat that the RBA meet on August 5 and 6, after Q2 CPI data is released on July 31. If the CPI is high it’ll cloud rate cut projections.

—

NZD/USD hourly chart:

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

155.25 and thereabouts the low, a very sharp drop from its high a few minutes ago just under 156.00.

Fears of intervention reignited.

The drop took it to its lowest since June 7.

NZD/USD has fallen also, to its lowest since May 2, circa 0.5943

Not so dramatic for AUD/USD, but its to a one-month low

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

USD/JPY is up from its late US/early Asia lows under 155.60.

We haven’t seen news headlines out of Japan apart from the data:

• Japan flash PMIs (July): Manufacturing 49.2 (prior 50.0) Services 53.9 (prior 49.4)

This data is not usually much of a yen mover, and today is no different. The bounce back happened well before, on no fresh catalysts.

JPY swings look set to continue. USD/JPY rallies are attracting offers from those keen to take some USD/JPY longs off the table ahead of the Bank of Japan meeting next week. On the flip side those seeing continued carry opportunity are in with interest on USD/JPY dips. Keeping opportunities alive for everyone.

USD/JPY hourly chart

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

Jibun Bank S&P Global PMI Flash / Preliminary for July 2024 for Japan

Manufacturing PMI 49.2, first time under 50 (and into contraction) in 3 month

• expected 50.5, prior 50.0
• sub indexes show that output and new orders fell slightly, higher prices weigh on margins (input cost inflation to the highest since April 2023)
• new orders weakest since February

Services 53.9, to a 3 month high

• prior 49.4

Composite 52.6

• prior 49.7

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

Last week the Wall Street Journal reported on the claim that Musk was to donate USD45mn a month to Trump. The Journal cited, sources “familiar with the matter.”

Musk says its b/s:

• “What’s been reported in the media is simply not true,”
• “I am not donating $45 million a month to Trump.”
• Musk has created a super PAC, called the America PAC, to help support Trump.

Fortune has the clarification info, may be gated, but here is the link:

• “I don’t prescribe to [a] cult of personality”

Pic from the first Trump presidency

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

Reuters with the info, on a survey covering wage negotiations:

• data based on 145 pay settlements covering 370,000 employees
• employers offered
  average annual pay settlements of 4.9% in the three months to
  June, unchanged from the previous month

The implication:

• strong wage growth that may sustain the
  Bank of England’s inflation worries

More here:

• Official data showed average weekly earnings in the three months to June were 5.7% higher than a year earlier, almost double the increase most BoE policymakers view as compatible with consumer price inflation staying at its 2% target.

—

The Bank of England meet on August 1.

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

Judo Bank S&P Global PMI Flash / Preliminary for July 2024

While manufacturing is up a touch, services is down. Composite (reflecting both) is down. Not a great report.

Comments from the report, Warren Hogan, Chief Economic Advisor at Judo Bank, in brief:

• Flash PMI report is an early read on Australia’s
  economy in July and probably doesn’t capture
  the impact of tax cuts and cost-of-living support
  measures on household budgets and consumer
  spending. This will take some time to flow through
  to business conditions but should be expected to
  provide a boost over the months ahead.
• Employment continued to soften in July, with the
  composite employment index just above the 50 index
  level.
• Official data show that most of the job creation
  in Australia over the past year has come from the
  public sector and related industries, with the so called market sector employment trends slowing
  rapidly in 2024
• while the
  demand for labour in many businesses is holding up,
  it’s weakest since the start of the pandemic in 2020.
• Weaker activity results are not translating into a
  notable fall in inflation pressures across the business
  community.

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

Snippet via HSBC on likely potential tailwinds for stockmarkets globally in this second half the year.

Analysts at the bank say their discussion with clients indicate to much attention being paid to downside risks, and overlooking 5 key potential triggers for higher prices yet to come:

• Earnings reports remain positive
• The ‘Goldilocks macroeconomic landscape to underpin valuations
• Ongoing momentum in artificial intelligence developments
• Market breadth improvement
• Little sign of clear sell signals

While HSBC are bullish, they expect returns to be lower than in H1.

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

Russian news outlet Interfax had the comments from Novak on Tuesday:

• “We have nearly reached it [the required level of oil output within OPEC+]. We are close to it. We have somewhat ‘underperformed’ the target at full volume, so to speak,”
• said that the Energy Ministry would send the OPEC Secretariat a schedule for offsetting the barrels produced above the quota going forward.

  Countries that have not reduced production enough as per the OPEC+ agreements will offset those volumes until the end of September 2025.

More here on the numbers.

Oil has traded lower in H1 of the week

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

• Oil: Private survey of inventory shows headline crude oil draw larger than expected
• Earnings after the close led by Alphabet and Tesla. Tesla misses. Alphabet beats
• US stocks close lower ahead of Tesla and Alphabet earnings
• GOP Nominee Trump: I will go ahead and debate Harris. Happy to do more.
• Crude oil futures settle at $76.96
• Macron:Outgoing majority has lost elections,but French want non-far right to work together
• Reuter/Ipso Poll: Harris 44% Trump 42% among registered voters
• BOC rate decision and lower oil price help to push USDCAD higher. Technicals more bullish.
• Jeffries and Schumer officially endorse VP Harris as the Democratic nominee
• U.S. Treasury auctions off $69 billion of 2-year notes at a high yield of 4.434%
• Crude oil prices drop to $76.51, down 2.4%
• Major European indices close mixed. German DAX higher. France CAC and UK FTSE lower
• Secret Service Director Cheatle resigns according to sources.
• EU consumer confidence flash for July -13 vs -13.4 estimate
• US existing home sales for June 3.89M vs 4.00M estimate
• Richmond Fed July manufacturing index -17 vs. -7 expected
• Kickstart the FX trading day for July 23 w/a technical look @ EURUSD, USDJPY and GBPUSD
• Reuters Poll: 70 of 100 economists see a rate cut in September
• Philadelphia Fed nonmanufacturing business outlook for July -10.0 versus +15.1 in June
• The JPY is the strongest and the AUD is the weakest as the NA session begins
• Forexlive European FX news wrap 23 July – The US Dollar remains in the driver’s seat

The USD fell vs the JPY as the USDJPY continued its move to the downside today and looks to test its key 100 day MA and low from last Friday at 155.36.

Against all other major currencies, the USD was stronger.

The weakest of the major currencies were the AUDUSD and the NZDUSD as they continue to be sold on the back of slower growth in China.

• For the AUDUSD it reached an intraday low price of 0.6611. That is just short of its 100 day MA tarke at 0.6607. In the new trading day, the 100 day MA will be a key barometer for both the buyers and the sellers. Stay above and a bounce toward 0.66316 will be eyed. Moving below will be the first break since May 8th and should lead to even more downside probing
• For the NZDUSD, it is also trading to its lowest level since early May. It fell below its 100-day MA last week up at 0.60573 (currently at 0.5955). The close risk level for shorts in that currency pair would be a move back above the broken 61.8% retracement of the move up from the April low at 0.59927. Watch that level for sellers if the sellers are to remain in control.

The USDCAD traded higher today on the back of oil continuing its move lower. The price of oil fell for the 4th consecutive day, as traders react to slower growth in China. The BOC will also announce its latest interest rate decision tomorrow at 9:45 AM ET. The market is expecting a 25 basis point cut in the target rate to 4.50% from 4.75% and that too may be contributing to recent softness in the USDCAD. Technically, the pair is looking to test topside swing area resistance between 1.3784 and 1.3803. Getting above would be more bullish. A move below 1.3734 would disappoint recent buyers.

Today the Richmond Fed Manufacturing index came in weaker than expected at -17 vs -7 expected. Existing home sales was also weaker than expected has inventories increased but so did prices (new record).

US yields were little changed today. The US treasury sold $69B of 2-year notes without a problem thanks to strong/record demand from foreign buyers.

Stocks closed modestly lower after trading higher for most of the day. The Dow fell -0.14%, the S&P fell -0.16% and the Nasdaq fell -0.06%.

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