Market Comment – Stocks suffer a fall but not sounding the alarm yet
Stocks under pressure but dollar fails to make gains
ECB meets today, unlikely to produce a dovish shift
Pound ignores data; yen continues to rally against the dollar
Following last weekend’s events, the market is probably paying more attention to Donald Trump’s economic plan. Speculation about increased tariffs on Chinese goods, including high technology products, was probably one of the causes of the Nasdaq experiencing yesterday its weakest trading session since mid-December 2022. Interestingly, the US dollar continues its muted weakening, which could quickly reverse if US stock indices continue to trade in the red.
The Nasdaq experienced yesterday its weakest trading session since mid-December 2022
Interestingly, the current situation resembles the period prior to the September 2007 Fed rate cut. If history repeats itself then the S&P 500 index could experience a correction towards the 5,100 level while dollar/yen could drop to the 148-yen area, possibly assisted by repeated BoJ interventions. Unsurprisingly, the 10-year US Treasury yield tends to decrease ahead of the first rate cut gathering. The downward yield move that started in early July could push it down to the 3.70% area.
With the Fed's Beige Book yesterday revealing an increased possibility of a soft landing, today’s US calendar remains relatively light. Both the weekly unemployment claims and the Philadelphia Fed manufacturing survey will most likely be ignored unless they produce a surprise. More interestingly, Fed members Logan, Daly and Bowman will be on the wires later but only Bowman is a 2025 voter. She is also a known hawk and hence a dovish shift could cement the mood change inside the Federal Reserve Board.
ECB meets today, no surprises expectedThe ECB meets today and the chances of a surprise rate cut are close to nil as the rift between the hawks and the doves continues. The market is currently pricing in an 80% probability of a September rate cut but it looks unlikely that President Lagarde will pre-commit today to such a move. Apart from drawing the ire of the ECB hawks, it is probably too risky to pre-commit to an event that is almost two months away. In addition, by early September the Fed’s rate cut intention will be clear, making it easier for the ECB to formulate its strategy.
The ECB meets today and the chances of a surprise rate cut are close to nilPound ignores the weaker UK data
Expectations of an August 1 rate cut by the BoE have been significantly dented this week as following yesterday’s decent CPI report, the labour market data today failed to produce a significant downside surprise. With the average earnings indicators remaining elevated and the economy potentially performing better in the past two months, the focus understandably turns to the September BoE gathering.
Yen rally continues; Post-plenary press conference scheduled in ChinaThe yen remains on the front foot against the dollar as the BoJ is assumed to intervene almost daily. Japanese Vice Finance Minister Masato Kanda's comment that "if speculators cause excessive moves, we have no choice but to respond appropriately" possibly points to a strategy change from Japanese authorities compared to the end-April interventions. Only time will tell if this change proves more effective, but it is evident that a sustainable yen appreciation is dependent on the BoJ becoming more hawkish and the Fed starting its rate cutting cycle.
The yen remains on the front foot against the dollar as the BoJ is assumed to intervene almost daily
In the meantime, the Chinese Communist Party has called for a press conference on July 19 following the completion of the Third Plenum. There has been some speculation about further support measures for the housing sector being announced but the market is not really holding its breath.
![](https://www.xm.com/wp-content/uploads/2024/07/Calendar-July18-1024x583.png)
免責聲明: XM Group提供線上交易平台的登入和執行服務,允許個人查看和/或使用網站所提供的內容,但不進行任何更改或擴展其服務和訪問權限,並受以下條款與條例約束:(i)條款與條例;(ii)風險提示;(iii)完全免責聲明。網站內部所提供的所有資訊,僅限於一般資訊用途。請注意,我們所有的線上交易平台內容並不構成,也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。
所有缐上交易平台所發佈的資料,僅適用於教育/資訊類用途,不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議,或是交易價格紀錄,或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。
本網站的所有XM和第三方所提供的内容,包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接,皆爲‘按原狀’,並作爲一般市場評論所提供,而非投資建議。請理解和接受,所有被歸類為投資研究範圍的相關内容,並非爲了促進投資研究獨立性,而根據法律要求所編寫,而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊,相關詳情請點擊 這裡查看。