Service sector

America roundup: Dollar gains on US service sector data, Wall Street rallies, gold little changed, oil falls to nearly 6-month low after the U.S. Crude Surprise, Gasoline Build – August 4, 2022

Market overview

• US Jul S&P Global Composite PMI 47.5 forecast, 47.5 previous

• United States June US Factory Orders (monthly) 2.0%, 1.1% forecast, 1.6% previous

• US Jul Services PMI 47.3, 52.7 forecast, 47.0 previous

• US ISM non-manufacturing PMI 56.7, 53.5 forecast, 55.3 previous

•US July non-manufacturing ISM prices 72.3, previous 80.1

• US July ISM non-manufacturing business activity 59.9, 54.0 forecast, 56.1 previous

• US Cushings Crude Oil Inventories 0.926M, Previous 0.751M

• Crude oil inventories in the United States 4.467 M, -0.629 M forecast, -4.523 M previous

• US Crude Oil Imports 2.214M, previous -1.144M

Future Outlook – Economic Data (GMT)

•01:30 Australia Jun Imports (MoM) 6% previous

• 01:30 Australia Jun Exports (MoM) 9% previous

• 01:30 Australian Trade Balance June 14.000B forecast, 15.965B previous

Future Outlook – Economic Events and Other Releases (GMT)

• No significant event

fxbeat

EUR/USD: The euro plunged on Wednesday as the dollar strengthened following a surprise rally in the US services sector in July, supporting the view that the US economy was not in good shape. recession. Economic data showed an unexpected acceleration in services activity and a robust increase in factory orders, suggesting the economy was healthy enough to withstand the US Federal Reserve’s hawkish monetary policy. The Institute for Supply Management said its non-manufacturing PMI rebounded to 56.7 last month from 55.3 in June, ending three straight monthly declines. Investors continued to follow developments on the geopolitical front, where US House Speaker Nancy Pelosi’s visit to Taiwan raised concerns about renewed tensions between the two superpowers, the United States and China. Immediate resistance can be seen at 1.0194(11DMA), a break up can trigger a rise towards 1.0282(38.2%fib). On the downside, immediate support is seen at 1.0110(23.6%fib, a break below could take the pair towards 1.0032(BB lower).

GBP/USD: The pound rose on Wednesday as investors remained focused on the Bank of England’s policy meeting on Thursday, when the central bank is expected to raise rates for the sixth consecutive time. Money markets are currently pricing more than a 90% chance of an outsized 50 basis point rate hike at Thursday’s meeting, as the central bank attempts to quell inflation from a four-decade high by 9.4%. More than 70% of 65 analysts and economists polled by Reuters also expect a half-point increase from the bank’s monetary policy committee this week, according to a poll conducted between July 27 and September 27. 1st of August. Immediate resistance can be seen at 1.2214 (38.2% fib), a break up can trigger a rise towards 1.2308 (23.6% fib). On the downside, immediate support is seen at 1.2131 (50%fib), a break below could take the pair down to 1.2049(61.8%fib).

USD/CAD: The Canadian dollar strengthened against the greenback on Wednesday as worries about a possible recession eased following encouraging economic data from the United States, Canada’s largest trading partner, offsetting a drop in prices petrol. Wall Street rallied as data showed the U.S. services sector unexpectedly rebounded in July and U.S. manufacturing orders surged in June. Canada sends about 75% of its exports to the United States, including oil. U.S. crude oil futures fell nearly 4% to $90.66 a barrel after U.S. data showed crude and gasoline inventories rose unexpectedly last week and the ‘OPEC+ said it would increase its oil production target by 100,000 barrels per day. The Canadian dollar gained 0.3% to 1.2838 per greenback, after trading in a range of 1.2833 to 1.2891. Immediate resistance can be seen at 1.2866 (38.2%fib), a break up can trigger a rise towards 1.2912 (21DMA). On the downside, immediate support is seen at 1.2833 (5DMA), a break below could take the pair towards 1.2783 (50DMA). %lying).

USD/JPY: The dollar stabilized against the yen on Wednesday as the dollar rose after data showed a surprise rally in the U.S. services industry in July, while hawkish comments from Federal Reserve officials this week also supported the greenback. The Institute for Supply Management said its non-manufacturing PMI rebounded last month from June. The increase ended three consecutive monthly declines. It also showed that supply bottlenecks and price pressures have eased, and confirmed the view that the economy is not in recession. The greenback rallied on Tuesday after a trio of Fed officials signaled the central bank remains “completely united” on raising rates to a level that will put a damper on the highest US inflation since the 1980s. Strong resistance can be seen at 134.97 (11DMA ), a break up can trigger a move higher towards 136.19 (5th July high). On the downside, immediate support is seen at 132.20 (5DMA), a break below could take the pair towards 131.76 (50% fib).

Summary of actions

European stocks shrugged off a weak start and rose as the session progressed on Wednesday to finally close with fairly solid gains.

Britain’s benchmark FTSE 100 closed up 0.49%, Germany’s Dax ended up 1.03%, France’s CAC ended the day up 0.97%.

U.S. stocks jumped to a sharply higher close and Treasury yields hit two-week highs on Wednesday as strong economic data, upbeat business forecasts and easing geopolitical concerns boosted sentiment. investors’ risk appetite.

The Dow Jones closed up 1.29%, the S&P 500 closed down 1.56%, the Nasdaq stabilized 2.58%.

Summary of treasury bills

U.S. Treasury yields slid from their two-week highs on Wednesday in choppy trading as investors digested strong U.S. economic data and hawkish comments from Federal Reserve officials suggesting further rate hikes are on the way. loom on the horizon.

The 10-year Treasury yield fell 2.9 basis points to 2.7137%, after hitting a two-week high of 2.851%.

The two-year US Treasury yield, which generally follows rate expectations, was little changed at 3.0774%. Earlier, that yield hit a two-week high of 3.2%.

Summary of raw materials

Gold prices traded in a tight range on Wednesday, pressured by a stronger dollar and Treasury yields as hawkish comments from U.S. Federal Reserve officials pushed the metal away from the high of a month of the last session.

Spot gold rose 0.1% to $1,761.76 an ounce at 2:37 p.m. ET (6:37 p.m. GMT), hovering in a range around $20, while gold futures US gold fell 0.7% to $1,776.4.

Oil prices fell about 4% on Wednesday to near six-month lows, after U.S. data showed crude and gasoline inventories rose unexpectedly last week and the OPEC+ has announced that it will increase its oil production target by 100,000 barrels per day (bpd).

Brent crude futures settled down $3.76, or 3.7%, to $96.78 a barrel. It was his lowest settlement since Feb. 21.

West Texas Intermediate (WTI) crude futures fell $3.76, or 4%, to $90.66, the lowest settlement since Feb. 10. The contract hit a session low of $90.38 a barrel, the lowest since Feb. 25.