Markets turn cautiously optimistic as August PMIs decorate the economic calendar amid hopes of witnessing a sooner end to higher rates. That said, the early-day prints of softer Aussie PMIs and downbeat NZ Retail Sales push back the hawks on the RBA and the RBNZ respectively while firmer Japan activity data allows BoJ to keep its ultra-easy monetary policy intact.
Adding strength to the slightly positive outlook could be the positive vibes surrounding the US-China trade relations, as well as rejections of the recession concerns by major central bank speakers.
With this, the US Dollar retreats from a 2.5-month high and puts a floor under the commodities, as well as Antipodeans. On the same line is the pullback in the Treasury bond yields after refreshing multi-year high the previous day.
As a result, the Gold tests bear but the Oil price drops while the risk-barometer AUDUSD and NZDUSD edge higher. Further, GBPUSD and USDCHF gain the most from the downbeat Greenback amid hawkish BOE and SNB concerns. It should be noted that the firmer prints of German PMIs allowed EURUSD to better cheer the US Dollar’s weakness.
Elsewhere, BTCUSD and ETHUSD rebound from a one-week low amid promising on-chain data and hopes of more ETF approvals. Though, the US SEC woes and pre-PMI anxiety in the market test crypto buyers.
Following are the latest moves of the key assets:
Be it the latest positive turn in the US-China trade talks or the mixed data and central bankers’ hesitance to support more rate hikes, traders across the board regain optimism after witnessing a few weeks of risk aversion.
That said, firmer PMIs from Germany and Japan tease the hawks at ECB and BoJ respectively, which in turn check the market optimists ahead of the Eurozone and US activity data.
It should be noted that the escalating hopes of witnessing a policy pivot at the Fed, as per the latest interest rate futures, also favor the market’s slightly upbeat outlook.
Even so, Fed Chair Powell isn’t known for his dovish style and hence anxiety ahead of the Jackson Hole event keeps a tab on the market’s optimism.
Be it the first readings of the US, Eurozone and the UK’s PMIs for August or the US New Home Sales, not to forget Canada Retail Sales, everything can entertain the traders for the rest of the day and will offer a volatile session ahead. Following that, US Durable Goods Orders will act as the last stop before the Jackson Hole rocks the boat.
May the trading luck be with you!