- Yesterday's session on Wall Street and European markets performed mixed. US indices, despite strong upward momentum at the start of the cash session, closed lower intraday. The Nasdaq lost 1.05% at the close, and the S&P500 lost 0.77%.
- The situation was much better in Europe, where market bulls managed to close higher early. Germany's DAX gained 1.5% at the end of the session, and France's CAC40 gained nearly 1.91%.
- Despite the deterioration in sentiment at the end of the U.S. session, futures contracts indicate that today's session may also see an attempt to resume buying pressure. Contracts based on the DE40 are up 0.3%, while the US100 adds 0.91%.
- The focus today will be on U.S. jobless claims data, the Fed's Barkin speech, and quarterly results from Eli Lilly (Novo Nordisk's main competitor in developing an anti-obesity drug).
- The volatility of the USDJPY pair continued in a wide range today. The lows were around 145.45, and the peaks were at 146.85. The Bank of Japan released a "summary" of its July 30-31 meeting, sounding slightly more hawkish than indicated in its statement that day.
- The comment that significantly caught investors' attention was the mention that one BoJ banker considers a neutral interest rate of "at least around 1%" as a medium-term target. However, it is worth mentioning that the report given is an exchange of opinions of individual members, so the comments, if any, do not illustrate the BoJ's overall position.
- AUD/USD is holding session highs after further hawkish comments from RBA Governor Bullock. Bullock says the RBA board was strongly considering whether to decide on another interest rate hike this week. The bank does not expect inflation to return to its target range of 2-3% until the end of 2025.
- New Zealand's 2-year inflation expectations fell to 2.03% (previously 2.3%).
- JP Morgan CEO Jamie Dimon says the chances of a "soft landing" are around 35-40%, with recession becoming a more likely scenario.
- The VIX extends declines during this morning's session, slipping nearly 9%.
- Cryptocurrencies are making up for overnight declines. Bitcoin is currently gaining 3% and is back above $56,000.
Heatmap of the volatility currently observed in the FX market. Source: xStation
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