Market Update – August 5 – Slowdown clouds NFP

USDIndex dropped a handle and fell to 105.50 from an early high of 106.40. Yields dropped measurably even in the face of the BoE’s 50 bp rate hike, ongoing hawkish Fedspeak, projections of a recession in Q4 & a downturn in US growth. Stocks closed mixed but held their profits, amid positive earnings reports and yields pullback. Coinbase surged $8.09, or 10%, to $88.90 after the cryptocurrency exchange announced a partnership with money manager BlackRock. Lucid Group fell 9.7% to $18.56 after the electric-vehicle maker cut its forecast for car production. Eli Lilly lost 2.6% (revenue fell in Q2). Alibaba rose $1.71, or 1.8% after earnings.

USDIndex is holding above 106 at currently 106.30.
EquitiesUSA30 -0.26% in the red, USA500 steady at 4160 and USA100 0.41% in the green.
Yields: The belly of the Treasury curve dove over 6 bps to 2.76% on the 5-year. The 2-year slid almost 5 bps to 3.016%, and the wi 10-year fell 4 bps to 2.655%.
Oil – dipped to $87.53 (key weekly drop below 50 WMA). Saudi Arabia raised oil prices for buyers in Asia, which will make discounted Russian oil even more attractive, despite the pressure to sanction Moscow’s deliveries.
Gold has steadily moved higher. Currently at $1794, which brings $1830 into view.
FX MarketsEURUSD is at 1.0227 and Cable is at 1.2150. USDJPY steady at 133.25.

Today – NFP and Canadian labor data. The risk for US payrolls is downward (est. at 260K), both because job growth has outpaced the GDP path into 2022, and GDP growth is slowing.

Biggest FX Mover @ (06:30 GMT) ETHUSD (+4.84%) retests week’s highs at 1680. MAs aligned higher, MACD turned positive but signal line holds below 0, RSI 60 and dropping. H1 ATR 19.92, Daily ATR 58.28.

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Andria Pichidi

Market Analyst

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