Forexlive Americas FX news wrap 1 Aug:The USD moves higher. 30 yr yield highest since Nov. | Forexlive

The USD is ending the day as the strongest of the major currencies while the AUD is the weakest. The AUDUSD was the biggest mover falling 1.59%. The RBA kept rates unchanged and although the odds before the decision called for no change, there was a 35% chance for a cut. So there was some uncertainty. On Monday, the AUD squeezed higher ahead of the decision and that may have contributed to the retracement today.

The AUDUSD moved down to test the lows from June and July between 0.6594 and 0.6603. The low price for the day reached between those levels at 0.66015. The price has seen a modest bounce up to 0.6613 into the close. A move below 0.6694 in the new day would open the door for further downside momentum. Conversely, a move back above 0.6622 and a swing area between 0.6636 to 0.6652 would increase the bullish bias as shorts may be forced to cover – at least in the short term – on the failure to break below the June and July lows..

Economic data in the US session today came in roughly around expectations. The July ISM manufacturing PMI came in at 46.4 versus 46.8 expected. It was the 9th consecutive week below the 50 level indicative of the slower manufacturing sector. The Prices Paid component of the report came in at 42.6, also below the anticipated 42.8, but higher than last month’s 41.8. The Employment component registered a notable decrease, standing at 44.4, significantly lower than the expected 48.0 and last month’s figure of 48.1. Lastly, New Orders saw a slight improvement, reaching 47.3, up from the previous 45.6. The data indicates a continued contraction in manufacturing, but with a slight increase in new orders.

The JOLTs data for June was released with a slowing of the jobs market. Job openings stood at 9.582 million, slightly below the estimated 9.610 million. The job openings rate remained steady at 5.8%. Furthermore, the number of hires for the month decreased to 5.9 million, and total separations, including quits, layoffs, and other separations, also decreased to 5.6 million, while their respective rates remained virtually unchanged at 3.8% and 3.6%. Meanwhile, the number of employees voluntarily leaving their jobs, referred to as ‘quits’, decreased to 3.8 million and the quits rate reduced to 2.4%. A moderation of the employment numbers which is good news in what is it

Chicago Fed Pres Goolbee and Atlanta Fed Pres.Bostic spoke and both expressed a more dovish view (which is consistent with their recent bias.

Austan Goolsbee indicated that any decision to cut rates would likely be a distant future consideration. He noted that markets have a strong expectation that the Federal Reserve will successfully address the current inflation levels. Goolsbee also interpreted the latest JOLTS data as being consistent with a strong labor market that is transitioning to a more balanced phase. He described the Federal Open Market Committee’s (FOMC) decisions as ‘close calls’ as the Federal Reserve manages this economic transition. He also God dammit Buchan shippedemphasized the need for sustained and steady progress on inflation, while also expressing his ‘closet’ optimism about the future economic outlook.

Atlanta Fed President, Raphael Bostic, expressed his caution regarding the current phase of the economy, noting the risk of potential overtightening. Under his current outlook, he does not foresee any rate cuts until the second half of 2024 at the earliest. While Bostic acknowledges that inflation levels are unacceptably high, he also believes there has been significant progress made in tackling the issue. He interprets recent data as being consistent with an orderly economic slowdown. Despite his concerns about overtightening, Bostic revealed that he would have voted, albeit ‘grudgingly’, for a rate hike in July. Furthermore, he noted that if the progress on inflation reduction stalls, he would be open to considering a rate hike. Bostic, known for his dovish tone, is set to be a voting member of the Federal Reserve’s policy-setting committee next year.

A look around market shows:

• Crude oil erased earlier declines and is currently trading up $0.35 or 0.43% at $82.15. The price is approaching a swing-high ceiling going back to November between $82.48 and $83.44. That area may attract sellers with stops on a break above the area. The next target on a break would be the 38.2% retracement of the move down from the 2022 high. That level comes in at $86.72. In June, the price of crude oil advanced by 15.7%
• Gold is trading sharply lower on the back of the higher US dollar. The price is down $-21.54 or -1.10% at $1944.01
• Silver is trading down $0.45 or -1.82% at $24.29
• Bitcoin fell below the $29,000 level to a low price of $28,574 but has since rebounded and currently trades at $29,191

US yield move higher today which helped to support the greenback:

• 2 year yield 4.903%, +3.0 basis points
• 5 year yield 4.221%, +4.2 basis points
• 10 year yield 4.033%, +7.6 basis points
• 30 year yield 4.100%, plus a .5 basis points

In the US stock market, the major indices were mixed with the Dow industrial average rising in the NASDAQ index falling. The S&P was down marginally:

• Dow industrial average rose 71.15 points or 0.20% at 35630.69
• S&P index fell -12.25 points or -0.27% at 4576.72
• NASDAQ index fell -62.12 points or -0.43% at 14283.90

In after-hours earnings:

• American International Group Inc (AG): BEAT, EPS 1.75 vs 1.59 expected
• Advanced Micro Devices Inc (AMD): BEAT, EPS 0.58 vs 0.57 expected, Revenue 5.36 billion vs 5.31 billion expected
• Devon Energy Corp (DVN): MISSED, EPS 1.18 vs 1.19 expected, Revenue 3.454 billion vs 3.74 billion expected
• Match Group Inc (MTCH): BEAT, EPS 0.49 vs 0.45 expected, Revenue 844 million vs 811.4 million expected
• Mosaic Co (MOS): MISSED, EPS 1.04 vs 1.12 expected, Revenue 3.39 billion vs 3.12 billion expected
• Pinterest Inc (PINS): BEAT, EPS 0.21 vs 0.12 expected, Revenue 708 million vs 699.4 million expected
• VF Corp (VFC): MISSED, EPS -0.15 vs -0.11 expected, Revenue 2.10 billion vs 2.07 billion expected
• Starbucks Corp (SBUX): MISSED, EPS 1.00 vs 0.95 expected, Revenue 9.20 billion vs 9.29 billion expected
• Electronic Arts Inc (EA): BEAT, EPS 1.47 vs 1.02 expected, Revenue 1.924 billion vs 1.59 billion expected
• Caesars Entertainment Inc (CZR): BEAT, EPS 4.26 vs 0.33 expected, Revenue 2.90 billion vs 2.87 billion expected
• Vertex Pharmaceuticals Inc (VRTX): BEAT, EPS 3.89 vs 3.88 expected, Revenue 2.49 billion vs 2.42 billion expected

Tomorrow morning, CVS, Humana, Kraft Heinz will report earnings. After the close, PayPal, Shopify, Qualcomm, Unity Software, and Etse will report. On Thursday, Amazon, Apple, Coinbase, AirBNB, Draftkings, will all report.

In the Forex, for a review of the technicals in play versus some of the major currencies versus the US dollar click on the video link below. In the video is a review of the bias, risk and targets for the EURUSD, GBPUSD, USDJPY, USDCAD and the AUDUSD.