Personal opinions today:
The New York fed chairman William said monetary policy should cut rates as soon as possible, saying it was better to take "precautionary measures" than wait for a disaster.
Expectations of a rate cut sent Treasury yields sharply lower, with the yield on the closely linked two-year note falling 8.2 basis points to 1.754% and that on the benchmark 10-year note falling 3.2 basis points to 2.029%. After the comments, CME rate watch showed the odds of the fed cutting rates by 50 basis points in July surged to 70 percent from 34 percent on Wednesday. Gold peaked at $1,452, its highest since May 2013.
Oil prices fell as U.S. - China relations stalled, depressed global stock markets and expectations of a recovery in oil production in the gulf of Mexico weighed on sentiment. WTI crude fell 2.6 percent, while U.S. crude oil futures fell as low as $54.90 a barrel, while brent crude fell 2.7 percent to $61.36 a barrel. But the outlook for U.S. - Iran relations is uncertain, tensions in the Middle East are at risk of escalating, and oil prices are expected to support or rebound.
Today's focus is on German June PPI, Eurozone current account and Canada retail sales. As for the dollar's important direction and the price of other major currencies against the dollar and gold, the recommendation must pay attention to the July consumer confidence index of the university of Michigan.
[Important financial data and events]
14:00 German monthly PPI rate in June
16:00 Eurozone current account for May
20:30 Canada retail sales in May
22:00 Michigan consumer confidence index for July
The dollar index fell and the euro rose as the federal reserve's beige book and fed officials said they expected the fed to cut interest rates by the end of the month. Today's German June PPI and euro zone may current account forecasts are likely to be negative. The evening was dominated by the preliminary reading of the Michigan consumer confidence index. If the data comes in higher than market expectations of 98.5, the dollar has a chance to rebound. Technically, the euro is challenging resistance at 1.1270 and 1.1285. But if the eurozone economy weakens and U.S. economic data beats expectations, the euro could break through resistance and fall. It is worth noting that the performance of the euro indirectly affects the trend of the Swiss franc.
The UK retail sales rate for June beat market expectations, rising to 1 per cent from an estimate of minus 0.3 per cent. In addition, Fed officials recommended a rate cut, and expectations of a half-point cut at the end of the month rose, pound rebounded. Technically, there are still reasons for the pound to fall, with markets pricing in a strong chance by hard Brexit. Next Tuesday, the next UK PM announced. Due to the negative impact, the pound has the opportunity to fall, again dip 1.2380 support. Resistance level 1.2555/1.2575 is currently recommended.
Fed officials advised the fed to cut interest rates, which the market expects to increase by the end of the month, indirectly the Australian dollar up. The market is waiting for European markets to digest the news, today's focus on the U.S. Michigan consumer confidence index preliminary results. The Australian dollar could fall if European markets digest the fed's rate cut and U.S. consumer confidence initially beat expectations. Technically, it is recommended to pay attention to the resistance 0.7080 and 0.7095. Expect the trend of AUDUSD, the same impact on the trend of NZ dollar.
The US President is making negative comments on the China and US trade talks, threatening to ask for extra tariffs on Chinese imports. Tensions between the United States and Iran have risen, adding to risk aversion in the market, the general global stock market fell, the dollar fell against the yen trend. Technically, USDJPY references 107.45 and 107.30 are important support in the short term, with resistance of 107.95 and 108.15 above. If the US Michigan consumer confidence index over the market expected, it will be bullish for the dollar, and it is worth watching the Dow and Nikkei up. If the related indexes rise, it is expected that the dollar will rise against the yen.
The monthly rate of existing home sales in Canada fell in June.
Canada reported that the CPI fell in June. In addition, the China and US trade talks stalled, oil supplies resumed after a storm in Mexico, oil futures fell and the U.S. dollar rose against the Canadian dollar. In addition, tensions between China and Iran and rising expectations of a Fed rate cut suggest watching oil prices, which could directly affect the Canadian dollar. Crude oil prices rose, giving a chance to boost the Canadian dollar, which broke through 1.2990 support.
US crude oil futures
The US President negative comments on China and US trade have affected crude oil demand. Oil futures fell again as supplies resumed after the storm in Mexico. But tensions with Iran and rising expectations of a fed rate cut could boost crude prices. If the Michigan consumer confidence index beats market expectations by 98.5, it could lead to bullish oil prices. The current recommendation is to see resistance of 57.15 or 58.30 if U.S. crude futures remain above support of 55.40 or 54.90.
Fed officials say interest rates should be cut early before the economy falters. Expectations of a cut in U.S. interest rates are rising, with the odds of the federal reserve cutting rates by 50 basis points in July surging to 70 percent from 34 percent on Wednesday, according to CME rate watch. COMEX gold contracts jumped 1.7 percent, pushing gold prices higher. If the Michigan consumer confidence index beats market expectations by 98.5, the chances of the fed cutting interest rates will cool down and gold prices may adjust. Otherwise, it will rise.
U.S. Dow Jones industrial average futures US30
Fed officials said interest rates should be cut early before the recession, raising expectations of a rate cut and putting a positive on the dow. However, the stagnation of china-us relations and the uncertain situation in the us and Iran may affect the decline of investment sentiment. If the investment climate does not improve, the dow could test 27235 or 27090 support. If the university of Michigan's preliminary consumer confidence index beats market expectations by a hefty 98.5 percent and the fed's rate cut cools, the dow could adjust to lower levels at the top. Technically, the 27420 is a recent series of high resistance, is testing the possibility of breakthrough.
10850 / 11150 resistance
10050 / 9850 support
Yesterday mentions here, the US economy growth over the market expected, but the China market and US trade talk affected the market sentiment. The Fed still have chance to cut rate in this end of month. It is suppose bearish US dollar, bullish bitcoin. Technically, the bitcoin price maybe back to US$10,000 above. Now the dovish speech from Fed officials, Fed officials said interest rates should be cut early before the recession that will attract fund inflow to crypto currencies. If its continued and the noise to be Fed cut rate, the bitcoin probably test US12000.
Enjoy trading! The content is for reference only. Please do ensure that you understand the risk.
Information provided by AT Global Market, Chief Analyst of Asia Pacific: Martin Lam
Registered Australian Accountant/ Certified Professional Manager / Certified Financial Advisor Experienced Investor / Media Market Commentator Martin Lam has Over 17 years’ experience in global investment market. Familiar with the worldwide stock indices, precious metals such Gold and Silver, Crude oil and Forex. He operated Martin Currency Trading Company and had partnership with a number of well-known international financial corporations and institutions. Before he join ATFX, he was TeleTrade Greater China development and Sales Director. Mr. Lam attends Hong Kong Now TV and China CCTV finance channel once a week. He also had regularly invited by different media, such as DBC Digital Financial Channel, Hong Kong Economic Times, The Standard, Ming Pao to share his experience to trade in Forex, Precious metals, Crude oil and worldwide stock indices.
Legal: AT Global Markets Limited (ATGM, registration number 24226 IBC 2017). ATGM is an International Business Company in Saint Vincent and the Grenadines. Registered address is : the Financial Services Centre, Stoney Ground, Kingstown, St.Vincent & the Grenadines.