Daily summary: weak macro data puts pressure on Wall Street 🔴

Wall Street ends the day in bearish moods. We observe a sell-off in stocks throughout the day, with an acceleration of declines following the publication of the ISM report for the US manufacturing sector.

The sell-off is particularly noticeable in small-cap stocks (US2000) and the technology stock index (US100). Both indices recorded significant gains in recent weeks. US100 is down 3.30% and US2000 is down even 3.65%.

Despite weak ISM data and from the labor market, the dollar index gains 0.35% as capital flows into safe assets.

10-year bonds are also losing significantly, falling below the 4.00% level. TNOTE futures, which track the price of 10-year bonds, gain 0.35% to a level of 112.70 points.

The ISM manufacturing report for July showed a decline in sentiment to 46.8 against forecasts of 48.8 and 48.5 in June. The price sub-index was the only one above forecasts at 52.9 versus 51.8 expectations and 52.1 previously. Employment and new orders indices performed poorly.

Jobless claims stand at 249k versus expectations of 236k and 235k previously. The data also confirms a weakening labor market, but the key NFP report will be released tomorrow.

Weaker data weakens the dollar, and the surprisingly elevated price index makes today's reading not particularly favorable for the stock market. Nonetheless, today's macro data from the US is dovish.

The Bank of England cuts interest rates to 5% vs. 5% forecasts and 5.25% previously. The decision was not unanimous; 4 BoE members voted to keep rates, and 5 for a 25 basis points cut. Despite the rate cut, BoE Governor Bailey indicated caution to avoid easing policy too quickly or on too large a scale.

Futures on the Japanese Nikkei index (JAP2250) are down nearly 4%. The market is selling off stocks benefiting from the FX effect of Japanese exporters amid yen strengthening and Nasdaq pullback.

The cryptocurrency market is also experiencing a significant sell-off. Bitcoin is down 3.00% to $62,500, and Ethereum is down 4.00% to $3,100. In both cases, prices are approaching important support levels.