Morning wrap (25.07.2023)

6:53 AM 25 July 2023
  • Yesterday's trading session on Wall Street marked the 11th consecutive positive close for the Dow Jones index. 

  • The Asia-Pacific indices recorded notable upside during Tuesday's session. Although Japan's Nikkei is down 0.1%, the Australian S&P/ASX 200 is trading 0.4% higher and Chinese futures are 2.3% higher.

  • Particularly good sentiment in the Chinese market is due to further announcements of the implementation of economic stimulus measures at the Politburo meeting, particularly in the weakening property market and towards the debt market.

  • In addition, major state-owned banks intervened in the FX market, selling the USD and thus strengthening the yuan, as the PBoC lowered the USDCNY pair to 7.1406 (against an expected 7.2044) 

  • Futures pointed to a slightly lower opening of today's session in Europe and the US. 

  • The dollar index DXY has lost some of its upward momentum but remains at 101, while the EUR/USD pair remains below the 1.11 barrier. 

  • The Australian dollar dominates the FX market today, reacting to the appreciation of the Chinese yuan and a higher Australian consumer confidence reading.

  • According to sources familiar with the matter and quoted by Bloomberg, the BoJ intends to raise inflation forecasts to 2.5% this year.

  • Crude oil futures held on to most of their recent gains after climbing to three-month highs amid Chinese hopes for broad-market stimulus.

  • The start of the session brings a marked appreciation in precious metals. Gold gains more than 0.45% and climbs above $1,960 per ounce, while silver adds more than 0.85% on the day. 

  • Investor attention will focus today on: IFO data reading from Germany, US consumer confidence, quarterly results from fashion companies LVMH and EssilorLuxottica, as well as reports from Microsoft, Alphabet, Visa and Moody's.

  • Apple is facing a class action lawsuit brought by more than 1,500 app developers in the UK over high App Store fees. The lawsuit is estimated to be worth close to $1bn. 

  • The sentiment in the cryptocurrency market has been subjected to broad-market sell-offs all along, initiated yesterday by Bitcoin's fall below the $29,000 barrier. Today, this psychological level is being retested. 

Heatmap of volatility in the FX market today. Source: xStation 5


























 

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