FOREX
The US dollar is trading almost flat in relation to other major currencies this morning. This pause for breath follows the gains of the previous session, which were driven by the release of June’s Federal Reserve minutes. Notes from the meeting showed an alignment amongst the central bank’s monetary committee members, placing inflation and a hot labour market at the centre of the discussions. With almost all policymakers supporting the continuation of monetary tightening, most analysts now expect the Fed to hike rates again when it meets later this month, with an increasing likelihood of a repeat in September. Against this background, more dollar gains can be expected.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Stocks continued to drift lower in Europe on Thursday as risk and uncertainty rose in the market ahead of key macro data.
The STOXX-50 pulled back significantly lower, led by consumer cyclicals and basic material shares, as both monetary and economic uncertainty prevailed on the market. Investors were disappointed by the latest batch of EU PMI data yesterday before the minutes of the last FOMC meeting showed a split decision over the June "skip" on rate hikes. Shortly after, a significant bullish action took place in US bond yields, highlighting the rise of a downward risk to equity markets. In addition, with most benchmarks already hovering close to historical highs, investors will only need a little more certainty to take some profits out of the market. At the same time, reasons to keep buying stocks become harder and harder to find.
With that in mind, we expect the bearish pressure to increase towards riskier assets until investors witness significantly positive developments on the macro and monetary front. Meanwhile, traders' focus will likely be drawn towards today's USD ADP report, JOLTs and PMI services data, ahead of tomorrow's Non-Farm Payroll for June.
Pierre Veyret– Technical analyst, ActivTrades
Source: ActivTrader
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.