Thursday August 15th, 2024

The USD is steady, oil prices gain, equity markets are up, and US yields rise as risk-on sentiment improves. Currency markets held onto gains against the USD, while equity markets and US?futures made gains as the US?CPI helped reinforce the case for a Fed rate cut in September. "The latest US?inflation data supports our view of a gradual cooling of the US economy," said Haefele, CIO at UBS?Global Wealth Management. "This underlines our view that the Fed will start easing policy at its September meeting." Elsewhere, China's economy fails to pick up following its worst stretch in five quarters as the prolonged housing slump remains a drag on consumer spending. Oil prices find support from rate cut optimism and ongoing Mideast concerns. Bitcoin weakened nearly 1%, below $58,500, while gold prices held steady, and silver prices rallied by almost 3% to +$28. In focus today, the US?Initial Jobless Claims, Retail Sales, Philadelphia Fed Manufacturing Survey, Industrial Production, NY?Empire State Manufacturing Index, and Fed's Harker &?Musalem will provide intraday direction to currency markets.

In other news.?The WHO declares MPOX a public health emergency as cases surge in Africa. German police seal off air base over sabotage fears. Russians fleeing Ukraine's incursion say Putin has abandoned them. Ukraine launches the war's 'largest' drone attack on Russian airfields. US drug price negotiations cut costs by $7.5 billion in the first year. The UK economy expands by 0.6% in the second quarter. The EU coordinates record response to wildfires. Rogers says Corus' business model is 'broken' after being accused of 'predatory' action. Brewers tap growth for zero-alcohol beers in the Middle East. Harris will focus on grocery costs and child tax credit in her economic agenda.

In currency markets. The USD?holds steady, the GBP gains after positive UK?GDP data, and the Euro holds on to gains above 1.10 against the USD. The CNY weakened following disappointing economic data, and the Philippine peso weakened after its central bank cut interest rates for the first time in nearly four years. CNY weakens by 0.2%, while Asian currencies slip by 0.1% on average against the USD. Trading currency mainly improved, with CHF sown 0.2%, JPY, SEK &?MXN flat, NZD up 0.2%, ZAR firming by 0.3%, and AUD &?NOK?strengthening 0.4% against the USD.

In commodity markets. Oil, gold, and natural gas prices are up by 0.6%, silver prices rallied 2.9%, copper and wheat prices strengthened by 1.55%, and Soybean prices gained 0.7%.

Current level USD Index?????????????????????????? 102.5??????????????????? Flat

CAD?holds steady, straddling 1.3700 as investors look towards the Retail Sales & US?initial jobless claims for further guidance for a Fed rate cut in September. US?yields slipped on Wednesday following the US?CPI report, which eased expectations that the Fed could cut 50ps and increased expectations that the Fed will cut 25 bps in September. The lack of domestic economic data has left the loonie responding to strengthening commodity prices to provide support. Still, with the prospect of both the BoC?&?Fed cutting rates by 25bps in September, the loonie's longer-term strength will likely be capped.

Current level USDCAD????????????????????????????? 1.3710???????????????? Flat

EURCAD?holds steady near 1.5100, strengthening 1% in August as markets await a flurry of US data releases today.

Current level EURCAD?????????????????????????????? 1.5095???????????????? Flat

EUR?holds on to weekly gains above 1.1000 heading into the US?Retail Sales and Jobless claims data. The improving risk sentiment and the USD continuing under pressure saw traders stepping to the sidelines again ahead of the US?Retail Sales and Initial Jobless Claims data. They will then monitor Fed policymakers' speeches to gauge how aggressively the Fed could cut rates in September.

Current level EURUSD?????????????????????????????? 1.1010???????????????? Flat

GBPEUR?extends gains towards 1.1700 following the positive UK?GDP?data that grew to 0.9% y/y in Q2, up from 0.3%.

Current level GBPEUR?????????????? 1.1677 (0.8563)?????????????? Up 0.3%

GBP?retests August highs against the USD after positive UK growth data. The pound holds on to weekly gains based on a weaker USD and improving UK?economic data. Domestically, UK?GDP?q/q Q2 met expectations of 0.6%, while Industrial and Manufacturing production both beat expectations, which helped boost investor confidence and support the pound. Later today, the USD data will be a primary focus for markets and will drive the intraday direction for the pound.

Current level GBPUSD?????????????????????????????? 1.2857???????????????? Up 0.3%