Sour Apples

Markets cautiously recover from prior week's losses following the US’ credit rating downgrade that sent Treasury Yields spiking followed by disappointing headline jobs figures on Friday that came in at 187K versus expected 200K new jobs added that sent the more rate sensitive Nasdaq Composite Index down -2.9%. A culmination of events that could not come at a better time if once was looking to own a piece of Apple Inc. that shaved off -4.8% as it hurtled to levels not seen since breaking above 2022 highs earlier this year as sentiment soured on the tech giant's sales growth projections as it prepares to launch the latest iPhone 15 on the 23rd this month.

Volatility from earnings releases, however, are about to simmer down & fresh eyes will be on economic data releases with the US releasing its CPI report this Thursday where inflation is expected to accelerate to 3.3% from prior 3% due to higher energy costs. Core rates are to remain at 4.8% - still elevated against the Fed’s 2% target.

Other data points tracked this week include preliminary readings for Q2 GDP in the UK, final CPI figures from Germany and a slew of July readings from China as PMI figures came in soft, signaling a struggle in its recovery from the era of Zero-Covid policy. Not to forget, the Bank of Japan’s Summary of Opinions to shed further light into its decision to tweak its policy on yield curve control.?

For FX traders, IMO, the spotlight should be on the Euro as inflation figures are expected to moderate, US CPI print set to be released & clean levels provide healthy entry & exit areas. Some measure of finicky volatility will come into play as we move along the week, of course, but closest support level at $1.09365 does provide a measure of context. Lower we can see $1.08310s providing a glimpse of buying from mid-June to July before a longer-term inflection level at $1.07806 comes into play. I suspect a miss on US inflation expectations (rise to 3.3% from 3.0%) to the softer side would have this market break above July resistance to possibly test APR-MAY resistance at $1.10931.?

Crude prices seen holding near the cap much of this year and are expected to remain elevated with supply picture remaining given OPEC’s commitment to support prices following an incredible drawdown in inventory released from last week from the US Department of Energy.

That is it from me today. I hope this newsletter finds you well and if you have any questions at all, please do not hesitate to reach out. If you are interested in starting your trading journey or any of our partnership programmes - you can find out more at vantagemarkets.com or register as a client by opening a live account within minutes via the link below.?This was, Your Morning Reed.

Disclaimer: This newsletter is for information purposes only and does not constitute solicitation or advise on specific products or positions. Peruse this newsletter at your own discretion.?