The Japanese yen weakened on Tuesday before the Bank of Japan’s decision on whether to hike rates while the dollar gained before the (Fed) Federal Reserve’s meeting, where any new clues of a September rate cut will be in focus.
The BOJ will announce its rate decision at the conclusion of its two-day meeting on Wednesday. Markets are currently pricing in a 55% chance of a 10-bps hike.
US Jun JOLTS job openings fell -46,000 to 8.184 million, showing a stronger labor market than expectations of 8.000 million. Also, the Conference Board US Jul consumer confidence index rose +2.5 to 100.3, stronger than expectations of 99.7.
In addition, Eurozone Q2 GDP grew +0.3% q/q and +0.6% y/y, stronger than expectations of +0.2% q/q and +0.5% y/y.
Finally, the Japan Jun jobless rate unexpectedly fell -0.1 to 2.5%, showing a stronger labor market than expectations of no change at 2.6%.
Gold moved higher as treasury yields eased ahead of the start of the two-day meeting of the Federal Reserve’s policy committee that is expected to end with interest rates unchanged. However, expectations for a rate cut remained unchanged and the market fully appreciated the cut at the September meeting and expects two more cuts before the end of the year.
Crude oil prices extended Monday’s slide, with crude posting a new 7-week low. Further, rally in the dollar index added some pressure. Also, energy demand concerns in China, the world’s second-largest crude consumer, are weighing on crude prices after Citigroup cut its 2024 China GDP estimate to 4.8% from 5.0%.
Copper futures extended their plunge to their lowest in four months, amid mounting demand concerns from China. The Chinese government refrained from passing stimulus to target the aggressive slowdown in the world’s largest manufacturing sector and reiterated its priority to steer the economy away from construction and industry to specialize in advanced technologies and new energies.
MCX gold futures settled +0.50% to 68,610. Silver settled +1.69% to 82,659. Copper settled +0.35% to 794. Crude oil -0.93% at 6,292. Natural gas +3.41% to 178.80.
Economic data and events scheduled today. (Fed Meeting Today)
Australia
At 7.00am-
CPI q/q. Data is foreseen at 0.1% from previous 0.1%.
CPI y/y. Data is foreseen at 3.8% from previous 4%.
Trimmed Mean CPI q/q. Data is foreseen at 1%, from previous 1%.
Retail Sales m/m. Data is foreseen at 0.2% from previous 0.6%
Above data could have a volatile impact on the dollar.
China
At 7.00am-
Manufacturing PMI. Data is foreseen at 49.4 from previous 49.5.
Non-Manufacturing PMI. Data is foreseen at 50.2 from previous 50.5.
Above data could have a negative impact on the Yuan.
Japan
Tentative –
BOJ Policy Rate. Foreseen at <0.1% from previous <0.1%.
Monetary Policy Statement.
BOJ Outlook Report.
At 10.30am-
Consumer Confidence. Data is foreseen at 36.5 from previous 36.40
Housing Starts y/y. Data is foreseen at -2.3% from previous -5.3%.
Tentative – BOJ Press Conference
Above data could have a volatile impact on the Yen.
Eurozone
At 11.30am- German Import Prices m/m. Data is foreseen at 0.1% from previous 0.0%.
At 12.15pm- French Prelim CPI m/m. Data is foreseen at 0.3%, from previous 0.1%.
At 1.25pm- German Unemployment Change. Data is foreseen at 16k from previous 19k.
At 2.30pm-
Core CPI Flash Estimate y/y. Data is foreseen at 2.8% from previous 2.9%.
CPI Flash Estimate y/y. Data is foreseen at 2.5% from previous 2.5%.
Above data could have a volatile impact on the Euro.
Canada
At 6.00pm- GDP m/m. Data is foreseen at 0.2% from previous 0.3%.
Above data could have a negative impact on the Euro.
US
At 5.45pm- ADP Non-Farm Employment Change. Data is foreseen at 147k from previous 150k.
At 6.00pm- Employment Cost Index q/q. Data is foreseen at 1% from previous 1.2%.
At 7.30pm-Pending Home Sales m/m. Data is foreseen at 1.4% from previous -2.1%.
At 8.00pm- Crude Oil Inventories.
At 11.30pm-
Federal Funds Rate. Expect to hold unchanged at 5.50%.
FOMC Statement.
At 12.00am- FOMC Press Conference.
Above data could have a volatile on the dollar.
Happy Trading!
Commodity Samachar
Learn and Trade with Ease
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