Articles

The Japan’s Nikkei 225 is opening down -0.10%.

Looking at the daily chart, the price remains between its 100 day moving average above at 38619.42, and its 200 day moving average below at 37265.24.

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

• Prior month 3.0% revised to 3.1%
• Japan services PMI July 2.8% versus 2.9% expected

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

Israel and Hezbollah went at it over the weekend with bombing which did not do a lot of damage. It can be compared to a playground fight, where some haymakers missed, and ended with a wrestling match broken up by the playground monitor.

US General CQ Brown is out saying that the immediate risk of a broader war in the Middle East has eased somewhat after the Israeli – Hezbollah clashes over the weekend.

However, he also does war that Iran still poses significant danger as it weighs strike on Israel.

So although there is some good from the weekend skirmishes, the risk with another adversary remains real and elevated.

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

The CEO of Microsoft Satya Nadella, sold 14,398 shares of Microsoft at an average price of $417.41.

That netted the CEO a cool $6M ($6,009,869.18 to be exact).

Whoop-di-do.

Nadella owns 801,331 shares as of May 2024 (and probably options for many more). His holdings of shares totals $331,342,355.

Maybe he needed a new boat or wanted to buy a house for a family member. Maybe he owed property taxes or wanted to redo his kitchen or outdoor pool.

In other words, this is much ado about nothing.

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

Libyan eastern-based government says all oil fields closing down, halting production and exports – statement.

• Force majeure announced in response to the attempts to takeover the central bank by the Tripoli-based governments.

This article was written by Arno V Venter at www.forexlive.com.

As the North American session comes to an end, the CAD is ending as the strongest of the majors, while the NZD is the weakest.

The USD is ending the day mostly higher with gains vs all the major currencies with the exception of the CAD (-0.16%) and the CHF (-0.04%). To start the trading day, the USDJPY moved lower in the Asian/Pacific session continuing the trend from last week, but as yields rebounded, so did the USDJPY.

Looking at the US at that market:

• 2-year yield 3.935%, +2.3 basis points
• 5-year yield 3.665%, +1.6 basis points
• 10-year yield 3.817%, +1.1 basis points
• 30-year yield 4.107%, +0.6 basis points

Crude oil is ending sharply higher by $2.19 at $77.02. Gold rose at $6.40 or 0.26% and Bitcoin was lower by around $900 at $63,349.

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

• Fed’s Daly: Labour market is in complete balance
• Fed’s Barkin: I’m hearing that consumers are still spending but they’re choosing
• US July durable goods orders +9.9% vs +5.7% expected
• US Dallas Fed manufacturing index -9.7 vs -17.5 prior
• Canada to impose 100% tariff on China EVs; will also tax Chinese steel and aluminum
• Canada to slash the number of temp foreign workers. Trudeau hints at immigration revamp
• Apple announces iPhone event for September 9. Here’s the bull case from Dan Loeb
• Goldman Sachs: Scope for further GBP gains, maintain long GBP/CHF position targeting 1.16
• Deutsche Bank: Fed’s Powell opens door to aggressive easing, closing EUR/USD short
• Atlanta Fed GDPNow unchanged at 2.0%

Markets:

• WTI crude up $2.22 to $77.05
• US 10-year yields up 1.1 bps to 3.81%
• Gold up $8 to $2518
• S&P 500 down 0.3%
• CAD leads, NZD lags

The market took back some Friday’s post-Powell moves in an orderly retracement that was more back-and-fill than a response to fundamentals. Daly backed up Powell’s comments and highlighted how the FOMC doesn’t want to see any further weakening in the jobs market, which certainly looks like a Fed put. She also neglected to mention any kind of gradual easing, leaving 50 bps on the table.

The durable goods report headline was strong but the details were weak, so it balanced out. Otherwise, only oil was the real mover on a Libyan shutdown and that helped to push CAD to the top of the pile.

Equity markets were higher in the pre-market but there is angst building ahead of Nvidia’s earnings report and the nearly 10% move implied in the options market. That might keep things locked in for now.

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

The S&P 500 opened higher but quickly reversed and has been languishing for most of the day. Small caps were strong early but gave most of it away in a grind and tech lagged as fears build around Wednesday’s earnings report from Nvidia.

Closing changes:

• S&P 500 -0.4%
• Nasdaq Comp -1.0%
• DJIA +0.1% (record high)
• Russell 2000 +0.2%
• Toronto TSX Comp +0.3%

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

The economic calendar in the Asia-Pacific session is once again light.

• Japan service PPI for July will be released at 7:50 PM ET. Last month he PPI came in at 3.0%.
• China’s industrial profit year to date for July will be released at 9:30 PM ET with expectations of 3.5%

Other data is to be released on the new trading day.

• BOJ Core CPI y/y (JPY) 1 AM ET: Estimate: 2.1%, Previous: 2.1%
• German Final GDP q/q (EUR): 2 AM ET .Estimate: -0.1%, Previous: -0.1%
• German GfK Consumer Climate (EUR): 2 AM ET. Estimate -18.4, Previous: -18.4
• CBI Realized Sales (GBP): 6 AM ET. Estimate: -11, Previous: -43
• S&P/CS Composite-20 HPI y/y (USD): 9 AM ET. Estimate 6.2%, Previous: 6.8%
• Home Price Index m/m (USD): 9 AM ET. Estimate : 0.1%, Previous: 0.0%
• German Buba President Nagel Speaks (EUR) at 10 AM ET
• CB Consumer Confidence (USD):Estimate: 10 AM ET. 100.9, Previous: 100.3
• Richmond Manufacturing Index (USD): 10 AM ET. Estimate: -14, Previous: -17

Fedspeak in the new trading day includes San Francisco Pres. Mary Daly at 2 PM ET

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

What’s the world’s largest asset class?

It’s real estate. But what are homes worth when there is an empty house on your block with no one to fill it? What if there are 10 empty houses?

John Authers recently wrote about declining fertility trends and pricing them into markets. By now, most people have seen the charts showing the sharp drop in fertility rates since 1960:

There are no shortage of explanations from:

1. The cost of living
2. Breakdown in community
3. Breakdown in religion
4. Cost of housing
5. Cost of daycare
6. Feminism
7. Delayed careers
8. Climate change fears
9. People are selfish

It’s obviously some mix of culture and economics but no seems to have landed on a real solution, so it’s safe to say this won’t be reversed any time soon.

What Authers points out is that the trend is worsening and current projections don’t really extrapolate so there’s a decent chance that we undershoot the baseline scenarios, which are bearish of just about every asset class on earth.

I tend to think that a huge blindspot in markets is this kind of thing, which is forseeable but will catalyze slowly and at an unforseeable time. The instinct is to maintain market multiples but this should contract them.

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

It was looking awfully grim in the oil market last week as WTI crude fell through the summer lows to the worst levels since early February. What was particularly damaging is that it was coming at a time of positive risk appetite.

But oil has bounced back in three strong days of gains, including a 3.5% rally today and at $77.48, it’s now just below the 200-day moving average and in the middle of the summer range.

The caveat today is that the rally was entirely driven by Libya shutting down production and exports. That could (and eventually will) reverse put the crude market back to where it was.

From here, oil will need to get above the August high of $80.15 to put a squeeze on the crowded short positions. That could be tough with seasonals a drag from now through November.

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