Market sentiment improves during the busy early hours of Tuesday even as most of the economic data/updates released from Australia, China and the UK came in below expectations. However, Japanese Q2 GDP numbers were upbeat and allowed the JPY to ignore firmer yields to pare some of the latest losses.
It’s worth noting that the US Dollar also retreats from the monthly peak while the GBPUSD rises the most on strong UK average earnings. It’s worth noting that the AUDUSD ignores the softer Wage Price Index and unimpressive RBA Minutes, as well as softer China data, due to the PBoC’s surprise rate cut and Chinese officials’ readiness for more stimulus.
Elsewhere, Gold price licks its wounds at the lowest level in five weeks but Oil price struggles between hopes of China demand and looming fears of slower economic recovery.
It should be noted that the Chinese Yuan prints the fresh high of 2023 after multiple downbeat macro data and the central bank’s rate cut.
On a different page, BTCUSD and ETHUSD fail to cheer the US Dollar’s retreat, as well as news of major fund inflows, amid looming fears of harsh US SEC regulations and challenges for the crypto circulations due to the latest divergence with the equities.
Following are the latest moves of the key assets:
The first readings of Japan’s Q2 GDP, RBA Minutes and Australia’s Q2 Wage Price Index initially rocked the boat with a mild push towards the optimism. However, actual action stated after the downbeat China Industrial Production and Retail Sales contrasted with the PBoC rate cut and the readiness to defend the economy with more stimulus. Furthermore, the downbeat UK Employment Change and firmer Unemployment Rate contrasted with the higher Average Earnings to entertain the momentum traders. At last Russia’s central bank announced a surprise rate hike worth 350 basis points (bps) to keep the flow running.
The busy day ignores an off in multiple European bourses, as well as the strong US Treasury bond yields, while weighing on the US Dollar and underpinning the riskier assets.
Moving on, ZEW sentiment figures from Germany will precede the US Retail Sales and Canada Consumer Price Index (CPI) to keep the traders on their toes. In a case where the flow of data continues to prod the central bank hawks, the USD Index may extend the latest pullback from the key 103.30 resistance, which in turn may help riskier assets like equities, commodities and the Antipodeans. It’s worth noting, however, that the crypto traders’ indecision may prod the BTCUSD and ETHUSD buyers.
May the trading luck be with you!
