Macroeconomic/ geopolitical developments
- The Fed hiked by 25 basis points and confirmed a move to data dependence. With two more jobs reports and CPI readings before the next FOMC, markets are positioning for the Fed to now be at its peak rate.
- The ECB also hiked by 25 basis points and had President Lagarde shifting to a far more uncertain position on further hikes. This has caused a sharp reversal lower on the EUR.
- Chinese stimulus moved one step closer. Although formal stimulus is yet to be announced, it is reportedly in the pipeline. Support for consumers, the housing market and local debt markets would be welcome and could finally stoke the fire of domestic demand that has been lacking since the end of zero-COVID.
Global financial market developments
- Corporate earnings may be coming in positively, but there has been a lack of traction seen through index futures thus far. Markets seem to be far more aligned with the economic data that will guide the Fed. Despite this, futures are building another basis of higher lows with S&P 500 futures above 4553 and NASDAQ 100 futures above 15484.
- The US yield curve has bear flattened with a move higher at the longer end whilst shorter-duration yields remained fairly stable. Inflation indicators are playing a key role in fluctuating moves on the 10-year yield, which has backed away from a look at the 4.09% high.
- The continuing rally in the US Dollar Index is putting further pressure on the top of the 100.78/101.92 resistance band.
- Gold has faltered as the USD has rallied. The resistance on Gold futures has strengthened at $1978/$1983. A move below $1931 would turn the outlook negative again.
- Oil has continued to make progress in its near-term uptrend recovery. Holding above $77.33 would sustain the recovery which is looking to push above $80 towards the April high at $83.53.
Key this week
- Central Bank Watch: Central banks remain in focus with the Reserve Bank of Australia (Tuesday) and the Bank of England (Thursday).
- Macroeconomic data: Eurozone Q1 flash GDP and prelim July HICP inflation will be key on Monday. Manufacturing PMIs and ISM are on Tuesday, with Services PMIs and ISM on Thursday. Nonfarm Payrolls will be the big focus on Friday.
| Date | Key Macroeconomic Events |
| 07/31/2023 | China Manufacturing & Non-Manufacturing PMIs, Eurozone Flash HICP Inflation |
| 08/01/2023 | Reserve Bank of Australia monetary policy, Final Manufacturing PMIs for Eurozone & UK, US ISM Manufacturing and JOLTS jobs openings |
| 08/02/2023 | ADP Employment Change |
| 08/03/2023 | Final Services/Composite PMIs for Eurozone & UK, Bank of England monetary policy; US Weekly Jobless Claims, Factory Orders & ISM Services |
| 08/04/2023 | US Employment Situation (Nonfarm Payrolls), Canadian Unemployment |
| Date | Key Earnings Events |
| 07/31/2023 | n/a |
| 08/01/2023 | Caterpillar Inc, Merck & Co, Pfizer, Advanced Micro Devices, Starbucks, Uber Technologies |
| 08/02/2023 | The Kraft Heinz Co, Occidental Petroleum, PayPal Holdings, Qualcomm Inc |
| 08/03/2023 | Apple, Amazon, ConocoPhillips, Amgen, Booking, Stryker, Gilead, AirBnB |
| 08/04/2023 | n/a |
