* Risky assets may come under increasing pressure, but…
* That’s what we’ve been waiting for
* BoE minutes due Aug 19, not much room for surprises
* German and France grow in Q2 but PMI still showing contraction
* Key data and events to watch next week
The USD finished out this past week virtually unchanged from week-ago levels against most other currencies, excluding the JPY. To be sure, there was healthy intra-week volatility in most USD pairs, but the key take-away is probably that the USD rebound following last Friday’s July NFP report was largely sustained, adding further weight to the idea that the USD has made a significant medium-term low. The other prominent result of the week is a more decisive turn lower in many of the so-called risky assets. USD/JPY most clearly surrendered all of its post NFP gains and continues to trade in near lock-step with US Treasury yields, which also gave back the bulk of their gains from last week. With the USD unchanged against most others, but down sharply against the JPY, the carry trades (JPY-crosses) have posted bearish engulfing patterns on the weekly candlestick charts, which typically warns of further losses ahead. Outside of FX, stocks continue to stall below key Fibonacci resistance at 1015/1020 in the S&P 500, while oil also looks to have more decisively given up on attempts to extend gains beyond the year’s highs around .00/50. The recent strength in gold prices also looks to be losing steam after having topped out below key technical resistance in the 5/980/oz area. Overall, though, FX and many other assets remains trapped in recent ranges… Full text »
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