General Daily Market Recap – August 19, 2024

Market players appear to have woken up on the right side of the bed this week as risk-on vibes led to strong gains for higher-yielding stocks and currencies on Monday.

How did the rest of the asset classes do?

Let’s take a look at the latest headlines and market performance:

Titles:

• The BusinessNZ services index rose from an upwardly revised 40.7 to 44.6 in July; The employment component increased from 45.7 to 46.6
• Rightmove: UK property sellers’ asking prices fell 1.5% m/m in August, after a 0.4% drop in July
• Japan’s core car orders rose 2.1% m/m in June after a 3.2% drop in May
• Rehn, ECB official pointed to downside risks to growth as a potential reason for the September cut
• The leading US CB index in July: -0.6% (-0.4% forecast, -0.2% previously)
• New Zealand’s July trade balance swung from a surplus of NZD585m to a deficit of NZD963m, with exports up 14% and imports up 8.5%
• Minutes of the RBA’s monetary policy meeting suggested that interest rates could remain constant for a long time
• Israeli Prime Minister Benjamin Netanyahu has accepted a ‘bridging proposal’ on the Gaza ceasefire, according to US Secretary of State Antony Blinken

Broad Market Price Action:

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

Most asset classes took a hit during the Asian trading session, with the exception of bitcoin and crude oil, which posted early losses.

BTC/USD dipped into the $58,500 area before stomping sideways until London market hours, during which time a further decline was needed, then rebounded for the rest of the day.

Crude oil, on the other hand, fell much steeper on reports of mediation between Israel and Hamas, as well as concerns about global demand. As it turned out, Middle East ceasefire talks could make some headway, allaying production concerns in the region.

US stocks had a much better day as indices recovered most of their losses from last week’s slump as both the S&P and Nasdaq closed more than 1% in the green.

Currency Market Behavior: US Dollar vs. Majors:

USD chart overlay against major currencies by TradingView

The U.S. dollar was lower across the board, especially against the Japanese yen, which started to open during Asian market hours.

Over the weekend, Japan reported a sharp rebound in core car orders for June, while New Zealand saw its BusinessNZ services index rise, sparking a positive start for Kiwis as well.

There wasn’t much on the docket in terms of top data points for other major economies, keeping volatility low in the first half of the session in London. The dollar edged lower for the rest of the day, with the exception of the yen, following cautious remarks by FOMC member Kashkari and an increase in risk-taking.

Future potential catalysts for the economic calendar:

• Swiss trade balance at 6:00 GMT
• German PPI at 6:00 GMT
• The speech of the head of SNB Jordan at 9:30 GMT
• Canadian CPI figures at 12:30 GMT
• Speech by FOMC member Bostic at 5:35 pm GMT
• Speech by FOMC member Barr at 6:45 pm GMT
• New Zealand’s global dairy trade auction is approaching
• Japanese trade balance at 23:50 GMT

So the spotlight could be on the Canadian dollar as the economy prepares to print its July CPI readings which could impact the chances of further BOC easing.

Keep your eyes and ears clean speeches by several FOMC members (Bostic and Barr) also because their observations could further influence market expectations for the Jackson Hole Symposium and the September Fed decision.