There were no significant developments emerging from the Fed discussions. The primary focal points were interest rates and equities. Bitcoin experienced a decline toward technical support. Crude oil prices managed to recover from lower levels and concluded the day with an upward move, although they remained lower for the week.
Last Friday, if one were to assess the price fluctuations of the major currency pairs excluding JPY and CHF, they were all within a 0.11% range of the previous close.
Analyzing the alterations in major currency pairs against each other, the JPY displayed the strongest performance, while the CHF exhibited the weakest. Other currencies recorded marginal net gains or losses in relation to one another, characterized by alternating upward and downward fluctuations.
Throughout the trading week, the USD is mostly concluding with gains, driven by the ascent in yields and the safe-haven preference for the USD due to concerns surrounding China. The only currency that experienced a decline against the greenback was the GBP (with a modest decrease of -0.34%). The AUD and NZD emerged as the weakest currencies, primarily impacted by concerns related to China.
For the last trading week:
- The 2-year yield moved to a high of 5.024% at the weeks high, which was about 4 pips short of it 2023 high yield of 5.085%. The yield did come off high levels but is still closing higher by around 4.4 basis points.
- The 10-year yield traded 2 new 2023 highs of 4.328%. That pretty much equaled the high price going back to October 2022 at 4.335%. The yield rose by 9.5 basis points this week.
- The 30-year yield rose to a high of 4.426%. Like the 10 year that equaled the October 2022 high at 4.423%. For the week, the 30-year yield rose 11.0 basis points.
Looking around other markets today to wrap up the trading week:
- Crude rose $0.22 or 0.27% at $80.62. For the trading week crude oil fell -3.09% and broke a 7 week up streak
- Gold fell to the lowest level since March this week. Last Friday, it is down $0.61 or -0.03% at $1899. For the trading week, the price fell $-24.06 or -1.26%
- Silver is trading up 4.7 cents or 0.21% at $22.73. For the week, the price is up a modest 0.25% or 6.6 cents.
- Bitcoin is trading at $26,168 after reaching a low of $25,601. For the trading week, the price is down 11% or $-3116
In Friday’s US stock market action, the Dow halted a three-day slide, while the S&P and NASDAQ indices experienced their fourth consecutive day of decline. Both the S&P and the NASDAQ concluded the week with losses for the third consecutive week.
- Dow Industrial Average rose 25.83 points or 0.07% at 34500.67. For the trading week, the index fell -2.21%
- The S&P index fell -0.65 points or -0.01% at 4369.72. For the trading week, the price fell -2.11%.
- NASDAQ index fell -26.17 points or -0.20% at 13290.77. For the trading week, the price index fell -2.59%.
This week, the focal point will be the Jackson Hole Summit, featuring Fed Chair Powell’s address scheduled for Friday, August 25, at 10:05 AM ET. In the previous year, his concise and impactful 8-minute speech effectively outlined the Fed’s hawkish policy, leading to the adjustment of rates from 2.5% to the current 5.5%. This move prompted an increase in the dollar index, reaching its zenith on September 28, before initiating a subsequent downward trend.
Other key data this week includes:
- Flash PMI data out of Europe and the UK on Wednesday
- Flash PMI data out of the US also on Wednesday
- Weekly unemployment claims on Thursday
- German LIFO business climate data on Friday
- Final University of Michigan consumer sentiment index on Friday
Another point of interest this week is Nvidia’s earnings announcement, scheduled for Wednesday after the market closes. Considering the surprising revelation, they made last quarter (revision of forward guidance revenues from an estimated $7 billion to $11 billion), investors will closely monitor their upcoming announcement and forecasts for this quarter and the future.
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