- Global markets heaved a collective sigh of relief yesterday when US weekly jobless claims came in a little better than expected. The print of 233k was ahead of estimates and an improvement on last week’s release which was revised up slightly to 250k from 249k. The data eased some fears of a US recession after poor employment market data last week, triggering an equity sell off. Risk appetite improved and the greenback lost some ground, and a large amount of JPY funded carry trades have been washed out. US treasury yields were a little lower again as the market continues to look for clues on the size of any rate cut from the Fed at their September meeting.
- The Japanese yen continues to dominate market action, with USDJPY gyrating between gains and losses ahead of a holiday in Japan on Monday. Markets remain under the impression that the BoJ will likely avoid raising interest rates any time soon, with any future tightening expected to be dependant on the outlook for the US economy and path of their interest rates with officials nervous of the spread in yields widening too much.
- We continue to monitor Fedspeak and yesterday Federal Bank of Kansas President Jeffrey Schmid suggested that he is not ready to support a rate cut with inflation above target and the labor market still looking healthy despite signs of cooling. He did not drop any clues on when the Fed might cut, saying, “we are close, but we are still not quite there.”
- EURUSD is consolidating in the low 1.09’s after a brief trip lower to test support at 1.0880 as the pair seeks direction. GBPUSD is consolidating in the high 1.27’s ahead of a busy week of data next week which includes the jobs report and July inflation print.
We are using cookies to give you the best experience on our website. Download the GPS Cookies Policy for more information. The main types of cookies we use are as follows: strictly necessary cookies, performance cookies, advertisement cookies, and analytics cookies. You can find out more about which cookies we are using or switch them off in settings. Except for strictly essential cookies, you have also the option to decline the usage of cookies at any time. You can do this through this cookie management panel, which appears when you first visit, and you can access it independently through the link provided at the foot of the page.