Market Update – July 28 – Stocks & Treasuries Rally, USD dives post FOMC

USDIndex tanked over a whole big number to 106.00, from 107.25 as the FED raised interest rates 75bp (its 4th rise in 2022). Ongoing rises will be “appropriate” and they are “highly attentive” to Inflation. However, Powell gave no notice as weather 50bp or 75bp in September was appropriate*. US Stocks rallied hard** (NASDAQ +4.06%), betting on 50bp. NVDA+7.60, AMZN+5.37%, TSLA+6.17%. However, after hours Meta +6.55% posted a 1% DECLINE in Revenue (the first in its history), shares dropped -4.65%. Asian markets mixed (1 million in Wuhan in lockdown again) (Hang Seng -0.35%, Nikkei +0.23%). European FUTS higher. Yields up again +1.78%, Oil rallied to $98, Gold higher at $1740 and BTC moved up to $23k.

Biden & Xi due to speak today, Manchin (the Dem. Senator holding up Biden’s climate Bill) backs down. PBOC to pump $148bn to stabilize real estate sector.

  • USDIndex weakens further to 105.92 now. YEN outperforms in Asian session.
  • EquitiesUSA500 closed higher +102.56 pts (+2.62%) (4023), US500FUTS at 34019 now. 4th 8%+ rally of the year, previous 3 have resulted in lower lows..is the bottom in or is it a dead cat bounce?
  • Yields 10-year yield dived into close 2.734%recovered to 2.78% now.
  • Oil – infocus again as inventors had a 4.5m drawdown vs 1.5m, rallied to $98.90.
  • Gold weaker USD also helped lift the precious metal to $1740 highs currently from $1711 lows yesterday.
  • Bitcoin also rallied to trade at $23.1K now.
  • FX MarketsEURUSD rallied from within 7 pips of 1.0100 yesterday to trade at 1.0227, USDJPY dived under 135.30 now, from 137.50 yesterday. Cable broke resistance at 1.2080 to trade to 1.2180 now.

Overnight – NZD Business Confidence improves (-56.7 vs -62.6) AUD Import Prices slip and Retail Sales miss significantly (0.2% vs 0.9%))

Today – German CPIs, US Q2 GDP Advance, Q2 PCE. Earnings from BarclaysAnglo American, NestleEDF, L’Oréal, Amazon, Apple, Inteland many more.

Biggest FX Mover @ (06:30 GMT) USDJPY (-0.87%). Rejected 137.50 yesterday and tested to 135.15 lows earlier. MAs aligned lower, MACD histogram negative & falling, RSI 31.55 & falling, H1 ATR 0.361, Daily ATR 1.225.

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Stuart Cowell

Head Market Analyst

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