Morning wrap (01.08.2023)

8:41 am 1 August 2023

  • US indices finished the final trading session of July higher. S&P 500 gained 0.15%, Dow Jones moved 0.28% higher and Nasdaq added 0.21%. Small-cap Russell 2000 traded 1% higher

  • Indices from Asia-Pacific traded mixed today - equities from Japan, Australia and South Korea gained while indices from China and India dropped

  • DAX futures point to a more or less flat opening of the European cash session today

  • Reserve Bank of Australia decided to hold cash rate unchanged today at 4.10%. Expectations ahead of the meeting were split - economists saw a chance for 25 bp rate hike while money markets saw an over-60% chance of rates staying unchanged

  • RBA hinted that it will be more data-dependant now and unless there is a major upside inflation surprise, rates may remain on hold at future meetings as well

  • Australian dollar is the worst performing G10 currency today with AUDUSD erasing majority of yesterday's gains

  • South Korean exports dropped 16.5% YoY in July 2023 (exp. -15.0% YoY), marking the biggest drop in 3 years. This was the tenth consecutive month of declines with semiconductor exports dropping 34% in July amid weaker demand. Imports were 25.4% YoY lower (exp. -25% YoY)

  • Final Japanese manufacturing PMI index came in at 49.6 pts in July, up from 49.4 in preliminary release

  • Japanese unemployment rate dropped from 2.6 to 2.5% in June (exp. 2.5%)

  • Final Australian manufacturing PMI index came in at 49.6 pts in July - in-line with flash release

  • Australian building approvals dropped 7.7% MoM in June (exp. -7.9% MoM)

  • Chinese manufacturing PMI index dropped from 50.5 to 49.2 pts in July (exp. 50.3)

  • Indian manufacturing PMI index ticked lower from 57.8 to 57.7 in July (exp. 57.0)

  • Arista Networks rallied 14% in the after-hours trading after the company reported Q2 revenue at $1.459 billion (exp. $1.378 billion) and EPS of $1.58 per share (exp. $1.44)

  • Cryptocurrencies trade lower - Bitcoin drops 1.1%, Ethereum trades 1.6% down, Dogecoin declines 1.7% and Ripple drops 0.8%

  • Energy commodities are trading mixed - oil drops 0.2% while US natural gas prices increase 0.6%

  • Precious metals pull back amid USD strengthening - gold drops 0.3%, silver trades 0.6% lower and platinum declines 0.5%

  • USD and EUR are the best performing major currencies while AUD and JPY lag the most

AUDUSD experienced strong gains on the back of USD weakness yesterday. However, pair failed to break above the 50-session moving average (green line) and erased most of yesterday's gains following a dovish surprise from RBA today. Source: xStation5

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