General Daily Market Recap – August 28, 2024

The lack of major data kept traders focused on overall risk sentiment and positioning ahead of this week’s anticipated data releases.

Commodities such as gold and oil weakened further, while the US dollar gained ground against most of its peers.

See which titles made waves among the major assets!

Titles:

• Inflation in Australia cooled to multi-month lows but remained steady in July
• Construction Jobs Quarterly in Australia for Q2 2024: 0.1% (estimated 0.8%, -2.0% previously)
• BOJ Vice Governor Ryozo Himino signaled readiness for further rate hikes but suggested they may not be imminent
• Swiss UBS economic expectations fell from 9.4 to -3.4 in August; Analysts see a 68% probability of a rate cut by the NBS by September
• EIA: US crude oil stocks fell 0.8 million barrels in the week ended Aug. 23, less than the anticipated draw of 3 million barrels
• Bitcoin failed to hold above $60,000
• ANZ: New Zealand Business Confidence rose from 27.1 to 50.6 in August, the highest in a decade, just before the RBNZ rate cut

Broad Market Price Action:

Dollar Index, Gold, S&P 500, Oil, US 10 Year Yield, Bitcoin Overlay Chart by TradingView

As in previous days, the lack of market-moving news kept most major assets locked in their ranges on Wednesday morning, with the exception of crude oil and gold. Oil continued its decline from the previous session in the US, while spot gold reversed after testing its weekly highs near $2,525.

As the European session began, selling pressure on commodities increased. This could be due to a slight recovery in the US dollar ahead of the release of key data or profit taking at the end of the month. Improved risk sentiment also played a role as easing tensions in the Middle East and concerns over Libya’s oil exports weighed on WTI crude.

That cautious tone extended to U.S. stock indexes, which outperformed Nvidia’s earnings report and key economic data. The S&P 500, Nasdaq and Dow ended the day lower, while US 10-year Treasury yields, bitcoin, spot gold and oil prices remained range-bound as the session ended.

Currency Market Behavior: US Dollar vs. Majors:

USD chart overlay against major currencies by TradingView

Dollar traders started the day on a strong footing, pushing the USD higher after seeing a downtrend on Tuesday. The Aussie dollar went in a bit of a tailspin thanks to monthly inflation in Australia coming in at a cooler but still sticky high in July (hey, it rhymes!).

BOJ Vice Governor Himino boosted demand for the yen and dollar in late Asian trade, reiterating the central bank’s willingness to raise interest rates further if growth and inflation align with their forecasts. The dollar fell and the yen jumped on the news, but those moves partially reversed in early European trading.

In the US, the lack of data left the dollar vulnerable to month-end flows and positioning ahead of Nvidia’s post-market earnings and upcoming US data. The USD softened in early US trading and ended the day below its intraday highs.

Future potential catalysts for the economic calendar:

• Japan Consumer Confidence at 5:00 GMT
• Germany’s preliminary CPI was released during the European session
• Spain flash CPI at 7:00 GMT
• Canada’s current account balance at 12:30 GMT
• US preliminary GDP at 12:30 GMT
• US Initial Jobless Claims at 12:30 GMT
• US Merchandise Trade Balance at 12:30 GMT
• US pending home sales at 14:00 GMT
• SNB President Jordan will deliver a speech at 16:00 GMT
• FOMC member Raphael Bostic will deliver a speech at 19:30 GMT
• New Zealand accepts construction at 22:45 GMT
• Core CPI in Tokyo at 23:30 GMT
• Japan unemployment rate at 23:30 GMT
• Japan preliminary industrial production and retail sales at 23:50 GMT
• Australian Retail Sales at 1:30am GMT (August 30)

The euro could see increased volatility during the European session as Germany and Spain print inflation reports.

In the US, traders will get another chance to talk about the outlook for the US economy at the parade of lower-level data releases scheduled for today.

Keep an eye out for headlines and market themes that can affect overall USD demand and risk sentiment in the markets!