Daily Comment – Markets cautious as Nvidia earnings and key US data loom
Dollar pauses slide as jobs and inflation data awaited
Yen pulls back but hawkish BoJ signals keep it elevated
Wall Street awaits Nvidia, oil retreats on demand worries
![](https://www.xm.com/wp-content/uploads/2024/08/Perf-Aug28.png)
Dollar awaits key data for direction
The US dollar extended its slump against all its major peers on Tuesday, as in the absence of any top-tier data and shocking headlines, investors continued to digest Powell’s dovish stance at Jackson Hole.
However, today, the dollar is in a recovery mode, perhaps as short sellers are liquidating their positions ahead of important releases tomorrow and Friday. Bearing in mind that Powell stressed the importance of the labor market, tomorrow’s initial jobless claims may attract more attention than usual, while on Friday, the core PCE price index, the Fed’s favorite inflation gauge, is due to be released.
Following Powell’s remarks, more market participants were convinced that the Fed may proceed with a 50bps cut in September, with the probability for such action currently resting at around 35%, and the total basis points worth of reductions by December at around 103.
Therefore, data pointing to further cooling of the labor market and more softness in inflation could encourage investors to further lower their implied rate path, something which is likely to exert more pressure on Treasury yields and the US dollar.
Data pointing to further cooling of the labor market and more softness in inflation could encourage investors to further lower their implied rate path
Yen carry trade not the favorite game in town
The currencies taking the most advantage of the dollar’s slide were the risk-linked aussie, kiwi, and loonie, as well as the British pound. BoE Governor Bailey’s message that they are not in a rush to cut interest rates again soon is also adding fuel to the pound’s engines.
Yet, the yen is not the victim it used to be during risk-on days. It managed to gain some ground yesterday, implying that investors remain hesitant to take one last ride with the previously overcrowded carry trade.
The yen is not the victim it used to be during risk-on days
Although it is on the back foot today, hawkish remarks by BoJ policymakers are unlikely to allow massive selling. Following Governor Ueda on Friday, Deputy Governor Himino said today that they would continue to raise interest rates if inflation stayed on course. This allowed traders to continue penciling in a strong 72% chance of another 10bps hike by the BoJ this year.
Equity traders lock gaze on Nvidia
All three of Wall Street’s main indices closed yesterday’s session in the green. With recession fears abating, expectations of lower interest rates in the months to come are cheered again by equity traders.
The gains were cautious though, as today, Nvidia is reporting its earnings after the closing bell. Nvidia’s results follow recent concerns about spending increases by other major players in the race to conquer the AI world, and thus, attention may be bigger than usual.
Gains were cautious though, as today, Nvidia is reporting earnings after the closing bell
Indeed, options pricing suggests that traders anticipate larger-than-usual post-earnings moves, which means that the broader market may also experience increased volatility as Nvidia accounts for more than a third of the S&P 500’s gains this year.
Oil slips on consumption worries
Oil prices have rebounded strongly lately on fears about potential supply losses from Libya, as well as increasing tensions in the Middle East. That said, a three-day streak of gains ended yesterday due to concerns about lower refinery profit margins after data showed that global consumption growth has been lower than previously estimated this year.
Yet, the ongoing conflict between Israel and Hamas and the risk of more than 1 million barrels per day of production being shut in Libya amid a political dispute, suggest that any setbacks in oil prices are likely to stay limited and short-lived.
Any setbacks in oil prices are likely to stay limited and short-lived
![](https://www.xm.com/wp-content/uploads/2024/08/Calendar-Aug28.png)
Gerelateerde activa
Laatste nieuws
Disclaimer: De entiteiten van de XM Group bieden diensten en toegang tot ons online handelsplatform op basis van uitsluitend-uitvoering, waardoor een persoon de beschikbare content op of via de website kan bekijken en/of gebruiken, zonder dat dit is bedoeld voor wijziging of uitbreiding. Dergelijk(e) toegang en gebruik vallen onder: (i) de algemene voorwaarden; (ii) risicowaarschuwingen; en de (iii) volledige disclaimer. Dergelijke content wordt daarom alleen aangeboden als algemene informatie. Wees u er daarnaast vooral van bewust dat de inhoud op ons online handelsplatform geen verzoek of aanbieding omvat om transacties op de financiële markten uit te voeren. Het beleggen op welke financiële markt dan ook vormt een aanzienlijk risico voor uw vermogen.
Alle materialen die op ons online handelsplatform worden gepubliceerd zijn bedoeld voor educatieve/informatieve doeleinden en omvatten geen – en moeten niet worden beschouwd als het bevatten van – financieel, vermogensbelastings- of handelsadvies en aanbevelingen, of een overzicht van onze handelsprijzen, of een aanbod of aanvraag van een transactie in financiële instrumenten of ongevraagde financiële promoties voor u.
Alle content van derden, alsmede content die is voorbereid door XM, zoals opinies, nieuws, onderzoeken, analyses, prijzen en andere informatie of koppelingen naar externe websites op deze website worden aangeboden op een 'zoals-ze-zijn'-basis, als algemene marktcommentaren, en vormen geen beleggingsadvies. Voor zover dat content wordt beschouwd als beleggingsonderzoek, moet u zich ervan bewust zijn en accepteren dat de content niet bedoeld was en niet is voorbereid in overeenstemming met de wettelijke vereisten die zijn opgesteld om de onafhankelijkheid van beleggingsonderzoek te bevorderen en als zodanig onder de geldende wetgeving en richtlijnen moet worden beschouwd als marketingcommunicatie. Zorg ervoor dat u onze Mededeling over niet-onafhankelijk beleggingsonderzoek en risicowaarschuwing in verband met de voorgaande informatie doorneemt en begrijpt; die kunt u hier lezen.