Morning wrap (07.08.2024)

8:38 am 7 August 2024

  • Yesterday's successful session on Wall Street boosted sentiment on Asian exchanges, and today's futures market trading indicates that the rebound is continuing. The US100 is gaining more than 1.5%, with the US500 up 1.1%, despite disappointing results from Super Micro Computer, the manufacturer of server racks used in data centres and AI; shares are trading down 13% after the quarterly earnings. The VIX index loses -5% and remains near 23 zone
  • Futures on the Nikkei, JAP225 are trading up more than 6%, continuing the rebound after a record series of declines since 1987. At the same time, the yen is weakening, and the USDJPY pair gains more than 2% today, rising above 147.5 as the yen weakened;; Japanese leading indicator change came in -2.6 vs 0.3 previously
  • BoJ Uchida commented divishly that Japanese central bank will not raise rates when market is unstable. According to his remarks, US soft landing is likely but not 100% certain, but as for now Uchida sees no big changes in both Japan and US economies. Benefits of a potentially cheaper currency supported export-orientated Japanese stocks
  • The Nikkei was followed by the KOSPI, which gained nearly 2.5% today. The Australian index fared relatively less well and rose 0.5% against a more than 1.6% rise in China's Hang Seng Index. Chinese index futures gain more than 2%; Chinese trade balance came in 84 bn USD vs 99 bn USD exp. and 99 bn USD previously; imports came in higher 7.2% YoY vs -2.3% exp. and 3.3% previously, signalling stronger demand across the country while exports came in 7% YoY vs 8.6% exp. and 9.6% in June
  • EURUSD is trading above 1.091 and is down -0.16% today. German industrial data scheduled for 8:00 a.m. could raise volatility on the Eurodollar. Yields on 10-year U.S. bonds are rising above 3.91%, and a number of analysts have commented that the panic reaction to weaker U.S. data was exaggerated, while the chances of a recession are still limited
  • Super Micro Computer (SMCI.US) reported weaker quarterly results than forecasts ($6.12 vs. $8.12 forecasts), also revenues of $5.31 billion missed expectations of $5.32 billion.  The company's profit expectations for the current quarter ($7.48 vs. $7.58 forecasts and $6.5 billion in revenue vs. $5.52 billion forecasts) missed projections. Super Micro announced a 10:1 split (effective October 1, 2024). Gross margins were unexpectedly the lowest since 2007 falling to 11.2% vs. 15.5% in the previous quarter and 17% a year ago. By some investors, the Super Micro report was said to 'give guidance' on AI trend, as Nvidia Q2 won't be known until August 28; after SMCI report, Nvidia shares lose 2.5% after US session
  • Oil is gaining more than 0.6%, and similarly, a small rebound is seen in natural gas (NATGAS) contracts. Yesterday's API data indicated a lower-than-expected inventory change of 180,000 barrels vs. 850,000 barrels forecast and a -4.49 million barrel drop previously
  • The rebound continues in the cryptocurrency market, where Bitcoin is already approaching $57,000 and gaining more than 1%. On Monday, the price of the largest cryptocurrency fell to $47k. Ethereum gains 1.5% and rises above $2,500
  • Pimco's Ivascyn expects two-three Fed rate cuts this year, the first 25 bps cut in September and told that 'The US recession risk has increased, but a soft landing is still more likely.' Also, Goldman Sachs CEO Solomon thinks that the Fed will forgo an emergency cut, and see no US recession.
  • Today's macro calendar is relatively sparse; the change in US gas and oil inventories according to the EIA is scheduled for 3:30 PM GMT. At 6:30 PM GMT we'll learn the Bank of Canada's minutes from its last meeting, and at 8 PM GMT US consumer credit data for July (expected $10 billion vs. $11.35 billion previously). The most important report is probably German industrial production (July report) scheduled at 7 AM GMT; markets expect stronger MoM (exp. 1% vs -2.5% previously) but still weak data (-4.2% YoY vs -6.67% previously)

 

The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.

Share:
Back

Join over 1 600 000 XTB Group Clients from around the world.