Marketwatch EU & UK

Daily Insights
August 6, 2024

  • Yesterday was a brutal day for markets with global equity indexes turning red and fuelling risk reduction across currency markets. Once again, the Japanese yen was the star performer as traders bid farewell to the carry trade with some analysts suggesting that the Federal Reserve may produce an intra policy meeting rate cut amid fears that the central bank is behind the curve as Friday’s labor market data raised concerns of a recession. A glimmer of hope appeared in the form of the US Services PMI, which came in better than expected however the data didn’t quash the markets negative sentiment of a slowing US economy.
  • Federal Reserve Bank of San Francisco President Mary Daly said that the labor market is softening and indicated that the FOMC should begin cutting interest rates soon. She said, “Policy adjustments will be necessary in the coming quarters” adding, “We have now confirmed that the labor market is slowing, and it is extremely important that we not let it slow so much that it tips itself into a downturn.” The swaps market is currently pricing in a near 50bp cut at the September meeting with a total of 100bp priced in for the remainder of the year.
  • EURUSD remains well support, trading comfortable above 1.09 after briefly trading through 1.10 yesterday before running into offers. Ahead this morning we await eurozone retail sales data and German factory orders, although the outlook for the US economy will likely influence EURUSD in the coming days.
  • Elsewhere, The Aussie dollar edged higher after the RBA kept interest rates unchanged at its policy meeting. The benchmark rate was kept at a 12 year high, with officials waiting for inflation to abate, before joining many other global central banks and cutting rates.

Economic Calendar

:
AUD - ANZ Job Advertisements m/m
:
JPY - 10-y Bond Auction
:
AUD - Cash Rate
:
AUD - RBA Monetary Policy Statement
:
AUD - RBA Rate Statement
:
AUD - RBA Press Conference
:
CHF - Unemployment Rate
:
EUR - German Factory Orders m/m
:
CHF - Retail Sales y/y
:
EUR - French Prelim Private Payrolls q/q
:
GBP - Construction PMI
:
EUR - Retail Sales m/m
:
EUR - Italian Trade Balance
:
CAD - Trade Balance
:
USD - Trade Balance
:
USD - RCM/TIPP Economic Optimism
:
NZD - GDT Price Index
:
NZD - Employment Change q/q
:
NZD - Unemployment Rate
:
NZD - Labor Cost Index q/q
:
AUD - RBA Assist Gov Hunter Speaks

Market Indicators

Currency Pairs
Pair High Low
eur/gbp 0.85769 0.85617
gbp/usd 1.28031 1.27673
gbp/aud 1.96768 1.95628
gbp/nzd 2.15706 2.13834
usd/jpy 146.373 144.298
eur/usd 1.09629 1.09436
gbp/jpy 187.094 184.434
eur/cnh 7.83318 7.8121
usd/cnh 7.15275 7.13491
Equities and Commodities
Nasdaq 100 18200.1
DOW 39052.8
S&P 500 5260.04
BRENT CRUDE 77.21
WTI 74.05
GOLD 2410.47

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.

About Simon Walker

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Simon Walker is head of the GPS Capital Markets trade desk in our London office where he is responsible for covering market risk in European hours. He has over 25 years’ experience in foreign exchange, working in both sales and trading.