Macroeconomic/ geopolitical developments
- Weaker than expected US Retail Sales and Industrial Production had markets continue to position for a Fed that may not follow up on its assertions of two more hikes in 2023.
- However, Thursday’s lower-than-expected Weekly Jobless Claims caused markets to rethink again, with the labor market again seemingly throwing up solid signals. Perhaps the Fed will still need to signal hawkish after all? The lack of certainty sets up for a potentially volatile reaction to the Fed decision on Wednesday.
- Chinese economic data remains weak, with Q2 GDP underwhelming. Market commentators continue to talk about the need for stimulus, but as yet, little is forthcoming from Chinese authorities.
Global financial market developments
- US index futures have broadly remained strong again, but there was a warning on Thursday as markets sold off on the back of disappointing tech earnings from Netflix and Tesla. However, the gains seen on the Dow point to the prospect of sector rotation rather than a broad sell-off. Tech will again be in focus this week with Alphabet, Meta Platforms, Microsoft and Amazon all reporting.
- US yields fluctuated on the data but are likely to settle in front of the Fed. The 2-year yield is under 4.90% with the 10-year yield backing away from 3.90%.
- The US Dollar Index rallied decisively into the weekend, with resistance between 100.78/101.92 being tested.
- Gold has eased off in its recovery. Key resistance on Gold futures remains intact at $1983, with support at $1946.60 a key higher low.
- Oil has developed a consolidation after breaking out above $75. A close above $77.33 would open moves towards $80.
Key this week
- Central Bank Watch: Central bank focus is on the Federal Reserve (Wednesday), the European Central Bank (Thursday) and the Bank of Japan (Friday).
- Macroeconomic data: The week starts with the flash PMIs, before US Consumer Confidence on Tuesday. Wednesday will be cautious in front of the Fed but expect a volatile end to the session. Volatility will likely continue with the ECB on Thursday too.
| Date | Key Macroeconomic Events |
| 07/24/2023 | Flash PMIs for Australia, Eurozone, the UK and the US |
| 07/25/2023 | German Ifo Business Climate, US Consumer Confidence, Richmond Fed Manufacturing |
| 07/26/2023 | Australian CPI, US New Home Sales, FOMC monetary policy |
| 07/27/2023 | European Central Bank monetary policy; US Durable Goods Orders, Weekly Jobless Claims, Pending Home Sales |
| 07/28/2023 | Bank of Japan monetary policy; German prelim CPI; US Core PCE, Employment Cost Index |
| Date | Key Earnings Events |
| 07/24/2023 | Nothing of note |
| 07/25/2023 | 3M Co, General Electric, General Motors, Spotify, Verizon Communications, Alphabet, Microsoft, Snap, Visa |
| 07/26/2023 | AT&T, Boeing, CME Group, Coca-Cola, Meta Platforms |
| 07/27/2023 | Bristol-Myers Squibb, Mastercard, McDonald’s Corp, Amazon.com, Ford Motor Co, Intel Corp |
| 07/28/2023 | Aon, Chevron, Exxon Mobil, Procter & Gamble |
