Markets remain dicey as the pre-CPI mood joins a light calendar. Even so, the US dollar consolidates Friday’s heavy gains during the inactive sessions.
The price of gold, however, fails to improve amid hawkish hopes about the Fed’s next move. Crude oil, on the other hand, remains on the front foot as China-linked optimism spreads.
Antipodeans manage to print mild gains with the AUDUSD’s leading run-up amid firmer data at home and from the largest customer China. NZDUSD and EURUSD also portray the USD weakness but USDCAD neither mark the oil’s strength nor the softer greenback.
Yields pare the week-start losses and the equities in Asia-Pacific, as well as futures of the US and Europe, trade mixed.
BTCUSD and ETHUSD grind higher but the crypto bulls appear reserved amid mixed headlines from Singapore and the US.
Following are the latest moves of the key assets:
Traders began the key week on a firmer footing as China flashed upbeat trade numbers, as well as passenger car data, while the fears of the Sino-American tensions over Taiwan ebbed. However, increasing odds of the Fed’s 0.75% rate hike in September joined hawkish Fedspeak to exert downside pressure on the markets.
On a different page, an absence of top-tier data ahead of Wednesday’s US CPI and traders’ easy mood after witnessing heavy volatility in the last few days, seems to have restricted the moves.
Even so, political jitters surrounding Taiwan, the UK and Japan challenge the sentiment, in addition to the expectations favoring aggressive central bank actions and global economic slowdown.
Further, mixed prints of New Zealand’s Electronic Card Retail Sales and firmer prints of Australia’s sentiment data joined Japan’s downbeat Machine Tools Orders to keep the traders on their toes.
Talking about cryptocurrencies, Singapore’s crypto lender halts withdrawals while Blackrock's deal with Coinbase signals that institutional investors can directly invest in the recent positive momentum.
⏫ 🟢 Strong buy: USDJPY
⏬ 🔴 Strong sell: ETHUSD
⬆️ 🟢 Buy: USD Index, USDCAD, Nasdaq
⬇️ 🔴 Sell: DAX, FTSE 100, gold, BTCUSD
Given the lack of major data/events on the calendar, as well as mixed geopolitical headlines, momentum traders may find it difficult to pass Tuesday. However, the expectations of the Fed’s another big rate hike are likely to help the US dollar and may weigh on the riskier assets like equities and cryptocurrencies. Above all, Wednesday’s US CPI will be a crucial event of the week.
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