FOREX
The US dollar is trading flat during the early part of Thursday’s session, with investors already focused on next week’s Federal Reserve meeting and rate decision. Despite the slowdown in US inflation and disappointing employment figures, which fell short of the consensus number for the first time in 15 months, a rate hike of 25 basis points remains priced into the value of the greenback. What investors really want to know is what the Fed will do after. Will July’s hike be the last in this cycle, or could there be more later in the year? Currency traders will pay close attention to the message delivered by Jerome Powell, eager for guidance on the central bank’s intentions. Until then, the dollar is likely to remain relatively stable in relation to other major currencies.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
European equities opened lower on Thursday, despite some positive data from Germany, after rising geopolitical tensions and disappointing reports from the tech sector weighed on market sentiment.
The STOXX-50 pulled back over the lower bound of its short-term range close to 4,350.0pts, led lower by Tech shares after investors witnessed corporate results from both Tesla and Netflix falling below expectations.
Meanwhile, more uncertainty has arisen from the geopolitical front after Russia decided to end the safe passage of Ukrainian crops by sea, which revives fears of a global food crisis, denting investors’ risk appetite further.
These new developments allowed investors to take some profits out of risky assets, tempering the bull run seen on equities since the beginning of July.
However, the situation isn’t threatening yet for stocks as bull traders seem strong or numerous enough to defend support levels on most benchmarks, with real estate, energy and basic material shares preventing the market from dipping lower. Investors may wait for further macro developments brought by today’s US initial jobless claims, Philadelphia Fed index, existing home sales, and another slew of corporate results from Johnson & Johnson, Publicis Groupe, Maurel & Prom and others.
Until then, the market will likely remain without clear direction unless prices clear or break one of the two bounds: 4,390.0pts or 4,350.0pts.
Pierre Veyret– Technical analyst, ActivTrades
Source: ActivTrader
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