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USD/JPY higher on strong demand for 10-year notes; Commodities diverge

Thursday's inflation report to seal the deal for a Fed hold in September Treasury sells 10-year notes with strong demand as yields drop China deflation raises prospects of more stimulus USD/JPY rose after a strong auction signaled that Wall Street is very confident that inflation will continue to fall. It looks like investors will gladly be eating all the extra issuance that comes from the Treasury.

09-08-2023 15:44 GMT by Edward Moya

Gold - Drifts lower pressured by higher yields

Higher yields push gold lower Could the US CPI be a game-changer? A break of June lows could be very bearish The second half of the summer hasn't been kind to gold so far, with the yellow metal coming close to $2,000 once more before plunging back toward $1,900 where it spent most of late June and early July. Higher yields, particularly in the US, and a stronger dollar have been primarily responsible for this but there's probably also an element of uncertainty in the economic data that's making

09-08-2023 12:08 GMT by Craig Erlam

Brent Crude - Another recovery but it's far from convincing

Chinese trade data only a temporary distraction Recovery not as bullish as it first appears Divergence a red flag Oil prices are advancing again today after briefly dipping on Tuesday following some weaker Chinese trade figures. While that data did appear to trigger some profit-taking in crude, it was never going to be a game-changer as oil market dynamics have turned much more bullish recently. Furthermore, weak global trade and an uninspiring Chinese rebound this year are not new stories.

09-08-2023 10:37 GMT by Craig Erlam

EUR/USD: Euro steadies after Italy curtails windfall tax and ahead of US CPI

Italy cushions windfall tax blow China deflation to spark stimulus efforts US five-year inflation breakeven nears peak set in April 2022 Yesterday, the euro took a big hit after Italian Premier Meloni’s cabinet approved a 40% levy on lenders’ extra profits. Today was all about damage control as the Italian government had to tweak and ease up this crushing windfall tax on banks. The initial tax plan crushed the European banking sector, but that might see some relief now that the finance ministr

09-08-2023 10:18 GMT by Edward Moya

British pound flat on light data calendar

US inflation expected to rise to 3.3% UK GDP projected to fall to 0% Fed member Harker says rates may have peaked The British pound has had a relatively quiet week. In the North American session, GBP/USD is trading at 1.2731, down 0.13%. Markets eye US inflation, British GDP It has been a quiet week on the data calendar, with no tier-1 events out of the UK or the US.

09-08-2023 10:07 GMT by Kenneth Fisher

New Zealand dollar shrugs as inflation expectations rise

New Zealand inflation expectations rise to 2.83% China's inflation decreases for the first time since February 2021 The New Zealand dollar is showing limited movement on Wednesday, trading at 0.6060 in the European session. New Zealand inflation expectations nudge higher to 2.83% Like most major central banks, the Reserve Bank of New Zealand has been waging a long and tough battle against inflation by raising interest rates. CPI fell to 6.0% in the second quarter, down from 6.7%.

09-08-2023 08:16 GMT by Kenneth Fisher

Australian dollar edges higher after mixed confidence data

Australian consumer confidence declines, business confidence steady Fed member Harker says Fed may be done raising rates The Australian dollar has bounced back on Wednesday and is trading at 0.6552, up 0.13%. AUD/USD slipped 0.45% on Tuesday and dropped to its lowest level since June 1st. Australian consumer confidence slips, business mood stays steady Australia's consumers remain deeply pessimistic about economic conditions.

09-08-2023 05:35 GMT by Kenneth Fisher

Brent Crude - China data weighs on oil prices

Chinese trade data disappoints again Saudi and Russian cuts continue to support prices Divergence a potential red flag The data from China appears to be weighing on oil prices today, which is understandable with it being the world's second-largest economy. Still, oil remains not far from yesterday's highs, having recovered more than 20% since late June.

08-08-2023 16:44 GMT by Craig Erlam

FTSE 100 - Investors troubled by Chinese trade data as oil prices pull back

Chinese imports fall by 12.4%, exports decline 14.5% Pullback coincides with quiet summer trading Key support in UK100 may be seen around rising trendline from pandemic lows

08-08-2023 15:55 GMT by Craig Erlam

NZD/USD slides on China's soft trade numbers

China's exports and imports fall sharply New Zealand dollar slides by 1% China's CPI expected to indicate deflation The New Zealand dollar has declined by 1% on Tuesday. In the North American session, NZD/USD is trading at 0.6044, down 1.01%. Earlier, NZD/USD touched a low of 0.6034, its lowest level since June 8th. China's trade plunges as the economy struggles China's post-Covid recovery has not gone according to plan, as weak global demand and soft domestic demand have weighed on economic

08-08-2023 11:58 GMT by Kenneth Fisher

Euro slides as German inflation eases

German inflation declines German Sentix economic index slows Fed members Bowman and Williams send hawkish message to markets The euro has fallen below the symbolic 1.10 level on Tuesday. In the European session, EUR/USD is trading at 1.0944, down 0.53%. German inflation decelerates in July Germany's inflation rate for July was 6.2% y/y, confirming the preliminary reading in June.

08-08-2023 10:42 GMT by Kenneth Fisher

EUR/USD finds support after Fed's Harker suggests rate hikes might be over

Fed rate hike odds stumble (Sept at 13.0% of a hike, November at 20.2%) Fed's Harker will may be at a point where it can hold rates steady Fed's Barkin notes inflation remains too high Risk aversion was providing the dollar with some momentum but that move might have been exhausted after Fed's Harker signaled they could be done raising rates. Harker noted, "Absent any alarming new data between now and mid-September, I believe we may be at the point where we can be patient and hold rates steady

08-08-2023 09:55 GMT by Edward Moya

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Podcast - Chinese trade figures, UK retail sales, Zoom

OANDA Senior Market Analyst Craig Erlam joined Jonny Hart to discuss how financial markets are trading following the release of Chinese trade data and UK retail sales. They also covered Zoom's decision to revise its flexible working policy.

08-08-2023 09:47 GMT by Craig Erlam

AUD/USD maintains bearish trend on disappointing China data

China's exports post worst plunge since February 2020 China's imports from Australia fell 10.9% y/y, which was a major reversal from the 6.2% gain seen last month Also adding pressure on AUD was PBOC fixing, which sent the yuan to weakest level in almost a month Global economic recovery suffers major blow on China woes Commodity currencies across the board tumbled after China’s trade data signaled global economic is in trouble over the short-term. A steadily improving Chinese economic recover

08-08-2023 06:10 GMT by Edward Moya

Yen extends slide as consumers reduce spending

USD/JPY is down 1% this week Japanese wage growth and personal spending decline The Japanese yen is trading quietly on Tuesday. In the European session, USD/JPY is trading at 143.10, up 0.42%.

08-08-2023 06:01 GMT by Kenneth Fisher

USD/JPY rises as BoJ confirms easy policy

BoJ Summary of Opinions takes note of higher inflation US job report a mixed bag The Japanese yen has started the week in negative territory. In the European session, USD/JPY is trading at 142.36, up 0.42%. BoJ says monetary easing to continue Inflation continues to be a key issue for the Bank of Japan, although it is much lower than in other major economies, at around 3%.

07-08-2023 11:44 GMT by Kenneth Fisher

Strong dollar sends oil and gold lower; AUD declines on expected Chinese weakness

China increased gold holdings for a ninth straight month in July Oil unfazed as Ukraine sea attack Russian oil tanker didn't lead to a major disruption Dollar supported amidst bond supply concerns; 10-year Treasury yield rises 3.8bps to 4.074% Oil Crude prices are lower following a surge in the US dollar and as Saudi Arabia anticipates a bumpy road for the crude demand. The Saudis are raising prices across most of Asia and Europe, with the Arab light crude only being boosted by 30 cents, which

07-08-2023 11:13 GMT by Edward Moya

Hawkish Fed speak boosts dollar across all the board

Fed's Bowman reiterates that more hikes might be need to bring down inflation German Industrial Production fell to a 6-month low US inflation data expected to support a September pause, but possible coin flip for the November meeting The US dollar is stronger across the board as the bond market selloff returns, sending the 10-year Treasury yield 6.9 basis points higher to 4.103%. After a mixed jobs report (slower job growth pace but higher wages) this week is all about an inflation report that

07-08-2023 09:10 GMT by Edward Moya

Australian dollar calm after rough week

RBA says decision to pause was close call Australia to release confidence data on Tuesday US employment report a mixed bag The Australian dollar is coming off another rough week, with losses of 1.17%. The currency has looked dreadful, losing close to 300 points since July 17th.

07-08-2023 06:35 GMT by Kenneth Fisher

Week Ahead - Will US core CPI stay at the lowest levels since 2021?

Everyone will be watching the US inflation report as a cool report could help support soft landing hopes and seal the deal for some that the Fed is done raising rates. Expectations for the July inflation report is for headline inflation to rise towards the mid-3% range, while core inflation remains steady and holding onto the lowest levels since 2021 on both a monthly basis at 0.2% and at 4.8% from a year ago.

04-08-2023 13:24 GMT by Edward Moya

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