Market Update – August 2 – Pelosi Taiwan Visit Saps Sentiment

USDIndex sinks again to 105.00, dragged lower by falling Yields (10yr -2.88% to 2.54%). US Stocks lower following record July. HSBC +6.5% Boeing +5.96% Pearson +12.66% BBBY +14.77%. Asian markets pressured lower by Pelosi’s proposed visit to Taiwan and China promising “countermeasures” including “military actions.” (Hang Seng -2.68%, Nikkei -1.44%). European FUTS also lower. (-0.6%). Oil tanks under $93, Gold spiked to $1780 and BTC down under $23k.

RBA raised rates 50bpas expected, (3rd consecutive month & fastest rate hike cycle since 1994) – BUT cools forward guidance will raise rates in months ahead, but adds “not on a pre-set path” #AUDUSD falls from 0.7030to 0.6950, AUDJPY -1.66%.

Biden announces US have killed head of Al-Qaeda, Zawahiri in Kabul drone strike.

  • USDIndex weakens further to test under 105.00 now. YEN & CHF outperform again in Asian session.
  • EquitiesUSA500 closed lower -11.66pts (-0.28%) (4118), US500FUTS at 4100 now. 4175 remains next key resistance
  • Yields 10-year yield dived into close 2.60%down again to 2.54% now.
  • Oil – tanked to $93.00 from $101.80 highs on Friday.
  • Gold – spiked to $1780 before cooling to $1773 now. Support at $1770 & $1,766.
  • Bitcoin also weaker USD to trade at $22.8K now, from as high as $24.4K.
  • FX MarketsEURUSD rallied to test 1.0300 zone, USDJPY dived under 131.00 to 130.40 lows. Cable holds over 1.2200 and tests key 1.2260 resistance area.

OvernightAUD Building Approvals better than expected (-0.7% vs. -5.3%), Commodity prices lower (14.1% vs. 24.3%) UK House inflation a tick lower at 0.1% m/m.

Today – Canadian Manufacturing PMI, New Zealand Unemployment, US NY Fed Household Debt & Credit Report, Speeches from Fed’s Bullard, Evans & Mester. Earnings BP (out – EPS exceed by +26%), CATUBER, AirBnB, AMDPayPal, Starbucks, Gilead, Marriott.

Biggest FX Mover @ (06:30 GMT) AUDJPY (-1.66%). Dovish RBA and Taiwan tensions hit the key most risk sensitive pair. Collapses from 92.500 to 90.75 lows. MAs aligned lower, MACD histogram negative & falling, RSI 22.5, OS & falling, H1 ATR 0.294, Daily ATR 1.198.

Click here to access our Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Leave a Comment