• 396 days Will The ECB Continue To Hike Rates?
  • 396 days Forbes: Aramco Remains Largest Company In The Middle East
  • 398 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 798 days Could Crypto Overtake Traditional Investment?
  • 803 days Americans Still Quitting Jobs At Record Pace
  • 805 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 808 days Is The Dollar Too Strong?
  • 808 days Big Tech Disappoints Investors on Earnings Calls
  • 809 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 811 days China Is Quietly Trying To Distance Itself From Russia
  • 811 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 815 days Crypto Investors Won Big In 2021
  • 815 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 816 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 818 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 819 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 822 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 823 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 823 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 825 days Are NFTs About To Take Over Gaming?
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Data Vacuum = Risk Appetite

We often mentioned how the lack of US economic had has repeatedly given rise to increased risk appetite, triggering weakness in the US dollar and the Japanese yen. Today is such a day with the US trade report having had little impact on the market as it not only came in line within expectations, but also due to its relative untimeliness, especially considering the Fed's focus on more currenct data reports. Further dollar weakness across the board with the exception of the yen should be the order of trading flows in the next 3 days until the release of the US retail sales report, which in fact may trigger further yen weakness/risk appetite/gains in high yielding FX vs the USD. Wednesday will be another day with a relative lack of market-moving data and so will Thursday-barring any considerable surprise in US weekly jobless claims. Risk appetite is expected to gradually take out as we approach next week's FOMC decision, with the upside for market disappointment from the Fed decision greater than that of a positive reaction.

Gold eyeing $730 before brief pullback towards $700

The rise in gold prices to fresh 16-month highs at $714 per ounce is consistent with risk-seeking trades and dollar weakness. Our target is for the metal to extend gains towards the $730 level before Wednesday's FOMC announcement, thereby matching the May 06 high (highest since 1980).These projected short-term gains are in line with expectations for a fresh all time high in EURUSD at 1.3880 and $2.0380 for GBPUSD.

More gains for Kiwi

Despite the 3% rally in NZDUSD to 0.7065 over the last two sessions, we expect the pair to exploit the current temporary surge in risk appetite to target 0.7130 and 0.7155. Wednesday's July retail sales from New Zealand could stand in the way of the rally in the event of prolonged declines following the 0.4% drop in June.

USDJPY has more legs towards 114.80

We stick with yesterday's note calling for further gains in the pair targeting the 114.30 level, facing interim resistance at 114.50. This week's reported contraction in Japan's Q2 GDP as well the temporary return of market confidence with respect of heightened certainty of a Fed rate cut next week should help weigh on the Japanese currency barring any new revelations on the US layoffs front. Barring any disappointing reports from individual US retail sales (International Council of Shopping Centers) and negative surprises from Friday's national retail sales, we expect the pair to target 115. Support stands at 114.30, followed by 113.80.

 

Back to homepage

Leave a comment

Leave a comment