General Daily Market Summary – September 10, 2024

With not many new catalysts to consider, markets are starting to position themselves ahead of the anticipated data releases on Wednesday and Thursday.

Which stocks moved the major assets anyway?

We discuss Tuesday’s key market drivers:

Titles:

• Westpac: Australian consumer sentiment fell 0.5% from 85.0 to 84.6 in September; The focus may shift from cost of living to employment prospects
• NAB: Australia’s business confidence fell from 1 to -4 in August, the first negative reading in three months
• Trade surplus with China rose from $67.81 billion to $91.02 billion in August as exports (+8.7% y/y) outpaced imports (0.5% y/y)
• Japan preliminary orders of machine tools fell 3.5% y/y in August after rising 8.4% y/y in July
• Germany’s Final Inflation confirmed at -0.1% in August
• UK jobs data was mixedwith signs of a cooling labor market but persistent wage pressures
• NFIB US Small Business Index fell from 93.7 to 91.2 in August; “Historically high inflation remains the main problem for landlords”
• BOE Deputy Governor Sarah Breeden favors the relaxation of financial regulations to stimulate economic growth
• BOC Governor Macklem said disruptions to global trade could make it harder for the central bank to meet its 2 percent inflation target.
• FOMC member Michael Barr announced a revised plan to impose a 9% increase in bank capital requirements, down from the 19% increase proposed last summer
• New Zealand visitor arrivals increased by 2.2% m/m in July; The June figure was revised higher from -0.2% to 0.5%

Broad Market Price Action:

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

With not much big data to consider, traders kept major assets in wide ranges earlier in the day.

Things got a little livelier during the European session as risk aversion and profit taking came in ahead of the US CPI report and the ECB meeting. European shares traded lower, while safe havens such as gold rose. Crude oil, in particular, was hit hard by weaker Chinese import data for August and OPEC cutting its outlook for global oil demand for 2024 and 2025.

In the US session, it was all about Fed rate cut expectations. Speculation about interest rate cuts kept bond prices higher, driving 10-year U.S. bond yields to their lowest level in more than a year.

Bitcoin (BTC/USD) also recovered from its lows, ending the day just below $58,000. Meanwhile, WTI crude recovered some losses, moving from $65.30 to $66.25. As for US stocks, they had a mixed day. The S&P 500 and Nasdaq rose, while the Dow slipped, weighed down by concerns about the banking sector.

Currency Market Behavior: US Dollar vs. Major:

USD chart overlay against major currencies by TradingView

The US dollar started the day strongly, continuing its gains from the previous session in the US. But Asian traders weren’t too enamored of the rally and the greenback fell as the market began betting on a more accommodative Fed decision later this month.

Price action became more choppy in subsequent sessions, with events such as the UK jobs report and Bank of Canada Governor Macklem’s press conference driving moves in their respective currencies.

Overall, we saw a risk-off mood, with “risky” currencies such as the EUR, GBP, AUD, CAD and NZD trading lower, while safe havens such as the CHF and JPY gained ground. This is likely due to uncertainty ahead of the US CPI report and Thursday’s European Central Bank decision.

USD/JPY extended its losses in the European session to become the weakest of the major dollar pairs. While the greenback found some support against its peers early in the US session, it eventually eased off its intraday highs.

Future potential catalysts for the economic calendar:

• UK monthly GDP at 6:00 GMT
• UK Merchandise Trade Balance at 6:00 GMT
• UK 3-Month Services Index at 6:00 GMT
• UK Industrial Production at 6:00 GMT
• UK production output at 6:00 GMT
• US CPI reports at 12:30 pm GMT
• UK’s leading CB index at 13:30 GMT
• EIA crude oil stocks at 14:30 GMT
• RICS UK House Price Index at 23:01 GMT
• Japan’s BSI Manufacturing Index at 23:50 GMT
• Japan PPI reports at 23:50 GMT

News traders flock! Britain will have a parade of mid-level economic reports that could move Sterling during the London session.

In the US, August’s advance inflation reports are expected to largely hold their previous readings and keep speculation of a Fed rate cut to 25bps.

Think you can catch pips from these builds? Keep your eyes glued to the tube!

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