Markets:
- Gold down $2 to $2511
- US 10-year yields down 2 bps to three.79%
- WTI crude down $1.26 to $71.92
- S&P 500 up 0.4%
- GBP leads, USD lags
Greenback weak spot was the theme as soon as once more and this time it had some backing because the BLS revised down non-farm payrolls by 818K jobs for the 12 months ending in March. There are good arguments that is overstated however Goldman pegs the actual loss at practically half that, which remains to be a softer labour market and purpose for the Fed to chop.
The FOMC added to that pondering as they highlighted a nearly-unanimous view on decreasing charges. That despatched the greenback to the lows of the day (and the 12 months on just a few fronts) Earlier than a 25-pip rebound late on oversold situations.
When it comes to extremes, the euro cracked the December 2023 peak and the pound got here inside 50 pips of the 2023 excessive. USD/JPY obtained right down to 144.50, which might have been the bottom shut of the 12 months save for a fast rebound to 145.18.
USD/CAD hit a four-month low that turned partially attributable to a doable Canadian rail strike tomorrow and rising requires the BOC to be extra aggressive.
AUD/USD nonetheless hasn’t completed recouping the July losses but it surely’s now shut regardless of the rout in iron ore.
General, it is powerful to sq. up all of the strikes — robust shares and bonds with a weak greenback — but it surely paints an image of an early-cycle economic system, no less than outdoors of the five-day rout in oil. However possibly we’re overthinking an August market and that is all repositioning forward of Powell.
