EURUSD
- The euro faced a significant decline over the week due to weakening EU data and contrasting strong US data, contributing to continued downward momentum.
- Core inflation in the Eurozone slightly increased in July, while Q2 GDP surprised with a 0.3% QoQ rise after a flat Q1, indicating some resilience amid challenges.
- A diverse range of US job data released on Friday led to limited upward potential for the US dollar, setting the tone for the upcoming US inflation data release.
- Despite the US Economic Surprise Index hitting its highest point since early 2021, the US dollar index (DXY) remains around its year-to-date lows, indicating a complex market sentiment.
- Despite recent fluctuations, the broader trend for EUR/USD remains bullish, supported by the ongoing higher-highs and higher-lows pattern since the end of 2022.
| SMA (20) | Neutral | ||
| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Falling |
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Closing statement: The euro underwent notable downward pressure throughout the week as Eurozone data softened and US data showed strength. While mixed US job data impacted the dollar's movement, the market sentiment remains complex with the DXY near its year-to-date lows. Despite this, the overall trend for EUR/USD leans towards a bullish outlook, influenced by the pattern of higher highs and higher lows since late 2022.
GBPUSD
- GBP/USD managed to maintain its position above a significant support level, around the end-June low of 1.2600.
- Despite the Bank of England's rate hike, the British Pound continued to face downward pressure, revealing the influence of various market factors.
- The Bank of England (BOE) raised interest rates consistently over the past 14 months, aiming to curb stubbornly high inflation and maintain control over the economic landscape.
- The US dollar experienced a notable drop, largely reversing its gains during the week, following a jobs report that wasn't as bearish as anticipated.
- Non-farm payrolls increased less than expected, but the unemployment rate declined while average hourly earnings exceeded projections. This points to a slowdown in job demand while keeping the labor market relatively tight for the time being.
| SMA (20) | Slightly Falling |
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| RSI (14) | Neutral | ||||
| MACD (12, 26, 9) | Falling |
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Closing statement: GBP/USD demonstrated resilience above key support, despite facing pressure even after a Bank of England rate hike. The BOE's persistent efforts to manage inflation through consecutive rate increases have marked the British Pound's trajectory. Meanwhile, the US dollar's response to a less-bearish jobs report highlighted the complexities of market dynamics. Despite a slowdown in job demand, the tightness of the labour market remains a significant factor shaping GBP/USD's journey.
GOLD
- Despite a slight gain following the jobs report, gold prices concluded the week with a decline of around 1%, largely influenced by a surge in longer-term Treasury yields.
- The spotlight is now on the upcoming US Consumer Price Index (CPI) data scheduled for Wednesday. Forecasts suggest a decrease in Core CPI to 4.7% YoY in July from the previous 4.8%.
- The weeks ahead hold significance in determining potential rate hikes by the Federal Reserve and the European Central Bank (ECB) in their September meetings.
- Although US inflation has moderated at a faster rate compared to other regions, economic growth expectations have remained relatively steadfast, shaping the broader market sentiment.
- A stronger inflation reading in the US is expected to prompt a further retreat in gold prices, while concurrently fueling the appreciation of the US dollar.
Closing statement: Gold prices experienced a weekly decline driven by rising Treasury yields, despite a brief gain following the jobs report. As the market's attention shifts to US CPI data, the balance between inflation and economic growth will play a critical role in shaping the policy decisions of major central banks. The dollar's potential appreciation amid strong inflation readings is poised to impact gold's trajectory in the coming days.
CRUDE OIL
- Crude oil prices maintained a sideways trend on Monday, hovering close to their nearly four-month highs, bolstered by Saudi Arabia and Russia's recent extension of supply cuts. Attention is now shifting to key inflation reports for market cues.
- Crude markets notched a sixth consecutive week of gains, driven by the supply cut extensions from Saudi Arabia and Russia. The optimism stems from the belief that these cuts will counterbalance any potential decline in demand this year.
- Saudi Arabia and Russia are steadfast in their production cut commitments. Saudi Arabia will continue reducing production by 1 million barrels per day (bpd), while Russia plans to lower oil exports by 300,000 bpd.
- These production cut decisions were aimed at supporting oil prices, which have reflected their intent by marking a 14% surge in July alone.
- Positive sentiment was also bolstered by expectations of additional stimulus measures in China, a significant oil importer. However, despite these boosts, economic data from China remained subdued, casting shadows over its economic outlook.
| SMA (20) | Rising |
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| RSI (14) | Neutral | |||
| MACD (12, 26, 9) | Rising |
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Closing statement: Crude oil prices maintained their strong stance near four-month highs as supply cut extensions from major producers provided consistent support. With these cuts boosting prices and a watchful eye on inflation trends, the overall optimism remains, albeit tempered by cautious economic signals from major consumer China.
DAX
- European stocks experienced a slip on Monday as investors gauged the potential implications of a mixed U.S. jobs report on the Federal Reserve's upcoming policy decisions. Market sentiment remained cautious, especially with key global inflation figures anticipated during the week.
- Deutsche Boerse faced a 1.6% decline after UBS downgraded the German bourse operator's rating from "buy" to "neutral". This shift in sentiment contributed to the market's cautious stance.
- Siemens Energy showcased robust growth in orders and revenue, revealing a record order backlog of 109 billion euros in its third-quarter earnings report. Despite this, the CEO highlighted the need to slow down the introduction of new products following substantial costs incurred due to quality issues at its wind turbine unit.
- The stock market's response to these events was characterized by a slight decrease in values as traders assessed the mixed U.S. jobs data's potential consequences and awaited global inflation data that could shape future market moves.
- The upcoming week's spotlight remained on key inflation reports from various regions, which are anticipated to provide essential insights into the global economic trajectory.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Falling |
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Closing statement: European stock markets witnessed a slight retreat on Monday, influenced by cautious reactions to a mixed U.S. jobs report. Deutsche Boerse's downgrade and Siemens Energy's mixed earnings report contributed to the market sentiment. With investors closely monitoring the forthcoming global inflation figures, the week is poised to be crucial in shaping market directions.