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Market Update – July 7 – Fed focused on Inflation, USD bid, Stocks flat, Gold tumbles


USD moved down from new to 20-year highs at 107.00 but remains in demand (USDIndex 106.64), US Stocks flat on close (NASDAQ +0.35%). FED Minutes leaned to the hawkish side. – ‘more restrictive’ policy as likely if inflation fails to come down. Asian markets are mostly positive (Hang Seng -0.13%, Nikkei +1.4%).  Yields closed up +3.3%. Oil fell another -1.0%, Gold plummeted again to $1735 & BTC rotates at $20k. UK PM Johnson has now lost over 50 members of his government but refuses to resign. AUD outperforms overnight.

Yesterday US ISM Service PMIs were better than expected but still at 25-mth low & JOLTS showed 11.25m job vacancies (1.9 jobs for every unemployed person).

  • USDIndex tested 107.00 and remains on Bid at 106.65 now. 
  • EquitiesUSA500 closed +0.36% 13.69pts (3845), US500FUTS at 3854 now.
  • Yields 10-year yield higher,  closed at 2.92%, trades at 2.90% now. Yield curve inverted again yesterday.  
  • Oil & Gold had weak sessions – USOil traded down to $95.10 lows and remains under  $100.00 at $98.48. Gold fell to 1732, next support at 1725, trades at 1745 now. 
  • Bitcoin continues to trade around $20K, testing $20.3K today.
  • FX MarketsEURUSD remains pressured at 1.0200, USDJPY rallied from under 135.00 to test 136.00 now. Cable trades at 1.1950 now.

OvernightGerman Industrial Output missed at 0.2% from 1.3%. Australian Trade Balance much better at 15.97b vs 10.7b & 13.25b prior.

Today – US ADP Employment & International Trade, ECB Minutes, EIA Oil Inventories, Speeches from Fed’s Waller & Bullard, ECB’s Lane & Enria, BoE’s Pill. 

Biggest FX Mover @ (06:30 GMT) AUDJPY (+0.42%). AUD lifted by trade data. Rallied form allied from 91.50 Wednesday to 92.70 today before cooling.  MAs aligning higher, MACD histogram positive & rising, RSI 55.24 & rising, H1 ATR 0.227, Daily ATR 1.398.

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Stuart Cowell

Head Market Analyst

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