General Daily Market Recap – September 4, 2024

Market correlations fell out of sync on Wednesday as the major asset classes appeared to respond to their individual catalysts.

Currency price action was also largely a mess, although the US dollar was generally weaker throughout the day.

Here are the latest economic updates and headlines that pushed the markets:

Titles:

• New Zealand ANZ commodity prices rebounded 2.1% year-on-year in August, down from a previous 1.7% decline
• The Australian economy grew by 0.2% q/q as expected in Q2 2024, the previous reading of GDP rose from 0.1% to 0.2%
• Chinese Caixin services PMI fell from 52.1 to 51.6 in August versus the expected 51.9
• Eurozone final services PMI fell from 53.3 to 52.9 in August, against expectations of no change
• UK final services PMI rose in August from 53.3 to 53.7 to reflect a faster pace of growth
• Eurozone PPI rose from 0.6% m/m in June to 0.8% in July, against the forecast of 0.3%
• OPEC+ is reportedly considering a delay in production increases as Libya will resume production
• Bank of Canada (BOC) cut interest rates by 0.25% from 4.50% to 4.25% and suggested more easing is coming
• jobs available in US JOLTS fell from 7.91 million (8.18 million originally) in June to 7.67 million in July (8.09 million) forecast
• Fed Beige book highlighted “flat or declining” economic activity, disappointing on the labor market

Broad Market Price Action:

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

While most asset classes moved cautiously during Asian market hours, bitcoin and crude oil started the day in the red, possibly still after the previous session’s sell-off.

Energy commodities headed further south after seeing weaker-than-expected Chinese Caixin services PMI data as it reinforced demand concerns. Prices rose around the London trading session as investors began talking about a potential delay in OPEC+ production increases now that Libya is set to resume oil production, but gains were erased towards the start of the session in New York.

Treasury yields continued to slide after seeing weaker-than-expected US JOLTS jobs data, while bitcoin took advantage of USD weakness then. US stock indexes took a lull from earlier declines as lackluster employment numbers reignited talk of a bigger Fed rate cut later this month.

Currency Market Behavior: US Dollar vs. Majors:

USD chart overlay against major currencies by TradingView

Major pairs traded in wider than usual ranges, with a slight bearish tilt for the US currency during the Asian trading session. The Aussie and Kiwi started the day off on the back foot, with Australian GDP and the Caixin services PMI doing little to point these core currencies in a clearer direction.

A little sideways price action was seen around the start of the session in London, before the greenback moved lower again. The US JOLTS job opening figure for July was below expectations and saw a negative revision to the previous month’s reading, fueling expectations of a potential NFP miss later this week.

The Bank of Canada (BOC) also announced its monetary policy decision to cut rates by 0.25% as expected and signaled further easing, but this did not really spark further volatility for USD/CAD.

While most of the dollar’s peers resumed range action after the JOLTS report, USD/JPY continued its decline and closed over 1% lower for the day.

Future potential catalysts for the economic calendar:

• RBA Governor Bullock’s speech at 2:00 GMT
• Swiss unemployment rate at 5:45 GMT
• Job cuts at Challenger in the US at 11:30 GMT
• US ADP Non-Farm Labor Change at 12:15 GMT
• US Initial Jobless Claims at 12:30 GMT
• US ISM services PMI at 14:00 GMT
• EIA Crude Oil Stocks at 15:00 GMT

We have a new set of leading US jobs indicators today, namely the Challenger Job Cuts, ADP Non-Farm Employment Change and the ISM Services PMI. Watch for further volatility in the USD as it could hold clues to the highly anticipated Non-Farm Payrolls report due on Friday.

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