Tin tức thì trường

The Federal Reserve Bank of Dallas reported Monday its general business activity index for manufacturing in Texas fell to 27.3 in July from an unrevised 31.1 in June, pointing to a continuing expansion in Texas factory activity, albeit at a slower pace than in recent months. This was the lowest reading since February.

According to the report, the production index, a key measure of state manufacturing conditions, came in at 31.0 in July, up 1.6 points from 29.4 in June, being well above its average and pointing to strong output growth. The new orders index edged up 0.1 points to 26.8, and the growth rate of orders index increased 2.4 points to 25.8. At the same time, the shipments index ticked down 0.2 points to 31.6, while the capacity utilization index slipped 0.7 points to 29.9, remaining at highly elevated levels. Elsewhere, the employment index rose 0.8 points to 23.7. On the price front, the raw materials prices index dropped 7.3 points to 73.5 and the finished goods prices index declined 1.9 points to 40.9, easing off the all-time highs reached last month. Meanwhile, the wages and benefits index decreased 2.1 points to 46.0, retreating from its historical high of 48.1 in June.

eFXdata reports that analysts at Citi provided their expectations for this week's FOMC policy meeting.

"We expect the 28 July FOMC Meeting to be broadly neutral, with the Fed acknowledging the possibility of a new Covid wave, while remaining optimistic about the outlook and watchful for upside inflation risks. In line with Citi’s US economists, we expect the Fed to have detailed discussions about tapering, and likely make some decisions about the nature of tapering and policy sequencing, but without disclosing full details or timing."

"We remain positive on overall risk sentiment but see room for continued volatility after markets stabilized fast last week. We are biased to fade Dollar strength but prefer to focus on relative value ideas in FX, e.g. long GBP/CHF, long NOK/SEK and short AUD/NZD."

The U.S. Commerce Department announced on Monday that the sales of new single-family homes tumbled 6.6 percent m-o-m to a seasonally adjusted annual rate of 676,000 units in June. This was the lowest reading since April 2020.

Economists had forecast the sales pace of 800,000 last month.

May’s sales pace was revised down to 724,000 units from the originally reported 769,000 units.

According to the report, new home sales in the South, the largest area, fell 7.8 percent m-o-m in June. In the meantime, new home sales in the Northeast plunged 27.9 percent m-o-m and those in the West dropped 5.1 percent m-o-m. In the Midwest, however, new home sales rose 5.7 percent m-o-m.

The report also showed that median sales price increased 6.1 percent y-o-y to $361,800, while the average sales price surged 12.2 percent y-o-y to $428,700.

In y-o-y terms, new home sales were down 19.4 percent in June.

According to ING's economists, while no Federal Reserve policy changes are expected in July's meeting, we could hear more about the tapering discussions that started in June.

"We are building up to the 28 July Federal Reserve meeting, but Chair Jerome Powell made it clear in his recent testimony to Congress that he continues to believe inflation pressures are largely transitory and there isn’t any pressing need to signal an imminent shift in policy. After all, employment levels remain more than 6 million lower than before the pandemic started while the latest Covid wave adds another level of uncertainty that can be used to justify inaction."

"Remember too that the Fed’s new monetary framework places a much greater emphasis on ensuring as many people in society feel the benefits of growth. This was accompanied by a move to an “average” inflation target of 2% and a clear signal that the economy will be allowed to run hotter than in previous cycles to ensure these targets are reached."

"Given this backdrop we are not expecting any change to the Fed funds target rate range of 0-0.25%, nor do we expect the Fed to lower its monthly QE asset purchases, which are currently running at $120bn per month."

"Nonetheless, there is a growing hawkishness creeping into the viewpoints expressed by other FOMC members given the strong economy and the fact that inflation is running at more than double its 2% target."

"While the July FOMC meeting is likely to be a non-event in itself, we wouldn’t be surprised to hear Jerome Powell talk a little bit more about the discussions surrounding the path of tapering. The upcoming Jackson Hole Federal Reserve Conference in late August, we suspect, will see Fed officials starting to lay the groundwork for a QE taper with this fleshed out in more detail at the September FOMC meeting before being formally announced in December. We predict a relatively swift reduction that sees QE purchases end in the second quarter of 2022."

U.S. stock-index futures declined on Monday, as investors prepared for a busy week, packed with earnings reports, including those from big tech companies, and the U.S. Federal Reserve meeting.

Global Stocks:

(company / ticker / price / change ($/%) / volume)

FXStreet reports that FX Strategists at UOB Group expect the cable to maintain the consolidative phase within the 1.3600-1.3830 range in the next weeks.

24-hour view: “The underlying tone still appears to be a tad firm and the bias for GBP is tilted to the upside. That said, 1.3800 is likely out of reach for today (1.3780 is already quite a strong level). Support is at 1.3730 followed by 1.3710.”

Next 1-3 weeks: “There is not much to add to our update from last Friday (23 Jul, spot at 1.3770). As highlighted, ‘shorter-term momentum has improved somewhat but GBP is still likely to trade within a range of 1.3600/1.3830 for now’. Looking ahead, a break of 1.3830 is not ruled out but GBP is unlikely able to maintain a foothold above this level.”

USD depreciated against most other major currencies in the European session on Monday as investors shifted their focus towards the U.S. Federal Reserve's monetary policy meeting, the outcomes of which would be announced on Wednesday.

Market participants hope to get hints on the Fed’s outlook for stimulus, given that inflation has been growing steeply in recent months. Most do not expect that the policymakers will provide any concrete guidance on plans for tapering the $120 billion in monthly asset purchases this week. 

The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, fell 0.22% to 92.71. The benchmark 10-year Treasury yield decreased two basis points to 1.252% early Monday.

FXStreet reports that FX Strategists at UOB Group note that USD/CNH is still seen within the 6.4400-6.5000 range in the next weeks.

24-hour view: “The underlying tone has improved somewhat and we see chance for USD to test 6.4900. The major resistance at 6.5000 is unlikely to come into the picture. Support is at 6.4750 followed by 6.4700.”

Next 1-3 weeks: “Our latest narrative from last Thursday (22 Jul, spot at 6.4660) still stands. As highlighted, USD is still in a consolidation and it could trade sideways between 6.4400 and 6.5000 for now. Looking ahead, the upside risk appears to greater but USD has to close above 6.5000 before a sustained advance can be expected.”

• I think it will remain appropriate to keep current stimulus in place for several quarters at least, and probably longer
• When tightening becomes appropriate, I suspect not much of it will be needed
• I have not changed my view that this inflation peak is likely to be temporary
• We are not out of the woods yet in terms of virus and impact on economy
• Impact of further rate cut is likely to decline, though overall impact is still positive
• The next time monetary stimulus is needed, I'd be fine with decreasing bank rate to -0.5% or even -0.75%

July 26

After the Close:

Tesla (TSLA). Consensus EPS $0.98, Consensus Revenues $11398.67 mln

July 27

Before the Open:

3M (MMM). Consensus EPS $2.28, Consensus Revenues $8594.28 mln

General Electric (GE). Consensus EPS $0.03, Consensus Revenues $17959.18 mln

Raytheon Technologies (RTX). Consensus EPS $0.93, Consensus Revenues $15833.00 mln

UPS (UPS). Consensus EPS $2.81, Consensus Revenues $23165.71 mln

After the Close:

Advanced Micro (AMD). Consensus EPS $0.54, Consensus Revenues $3612.39 mln

Alphabet (GOOG). Consensus EPS $19.15, Consensus Revenues $56053.02 mln

Apple (AAPL). Consensus EPS $1.01, Consensus Revenues $73440.40 mln

Microsoft (MSFT). Consensus EPS $1.92, Consensus Revenues $44301.27 mln

Starbucks (SBUX). Consensus EPS $0.77, Consensus Revenues $7260.32 mln

Visa (V). Consensus EPS $1.35, Consensus Revenues $5852.70 mln

July 28

Before the Open:

Boeing (BA). Consensus EPS -$0.71, Consensus Revenues $17038.91 mln

McDonald's (MCD). Consensus EPS $2.12, Consensus Revenues $5570.44 mln

Pfizer (PFE). Consensus EPS $0.98, Consensus Revenues $18725.18 mln

United Micro (UMC). Consensus EPS $0.79, Consensus Revenues $50096.91 mln

After the Close:

Facebook (FB). Consensus EPS $3.03, Consensus Revenues $27873.01 mln

Ford Motor (F). Consensus EPS $0.04, Consensus Revenues $22825.79 mln

PayPal (PYPL). Consensus EPS $1.12, Consensus Revenues $6271.88 mln

Qualcomm (QCOM). Consensus EPS $1.68, Consensus Revenues $7562.55 mln

July 29

Before the Open:

Altria (MO). Consensus EPS $1.17, Consensus Revenues $5361.85 mln

AstraZeneca (AZN). Consensus EPS $0.90, Consensus Revenues $7567.14 mln

Int'l Paper (IP). Consensus EPS $1.05, Consensus Revenues $5615.96 mln

MasterCard (MA). Consensus EPS $1.75, Consensus Revenues $4367.34 mln

Merck (MRK). Consensus EPS $1.35, Consensus Revenues $11203.24 mln

After the Close:

Amazon (AMZN). Consensus EPS $12.19, Consensus Revenues $114976.72 mln

T-Mobile US (TMUS). Consensus EPS $0.48, Consensus Revenues $19388.00 mln

July 30

Before the Open:

Caterpillar (CAT). Consensus EPS $2.41, Consensus Revenues $12528.45 mln

Chevron (CVX). Consensus EPS $1.59, Consensus Revenues $35975.75 mln

Exxon Mobil (XOM). Consensus EPS $0.97, Consensus Revenues $63962.00 mln

Procter & Gamble (PG). Consensus EPS $1.09, Consensus Revenues $18386.05 mln

FXStreet reports that analysts at Goldman Sachs suggest that any hint on the Fed’s tapering is likely to be thrown not until the September monetary policy meeting.

“Fed officials have said that they intend to signal that tapering is coming "well in advance" a phrase they also used in reference to the start of balance sheet runoff in 2017.”

“That precedent suggests that "well in advance" means two meetings worth of hints before the formal announcement, consistent with our expectation of the first hint in September, a second hint in November, and a formal announcement of tapering in December.”

FXStreet reports that in the opinion of FX Strategists at UOB Group, AUD/USD is now forecast to trade within 0.7320 and 0.7450 in the next weeks.

24-hour view: “The current movement is viewed as part of an on-going consolidation and AUD is expected to trade within a 0.7340/0.7385 range.”

Next 1-3 weeks: “Our update from last Friday (23 Jul, spot at 0.7385 still stands). As highlighted, the recent downward pressure has dissipated and AUD could trade between 0.7320 and 0.7450 for period of time.”

FXStreet reports that TD Securities analysts said that they expect Fed Chairman Jerome Powell to communicate that the recovery remains broadly on track and that more progress is expected despite growing concerns from the coronavirus Delta variant.

"Powell will likely acknowledge that the Committee has begun discussions about tapering plans, but also to remark that reaching the standard of "substantial further progress" still remains a "ways off"."

"US real GDP likely rose strongly in Q2, albeit not quite as strongly as in the consensus estimate, with real consumer spending probably posting double-digit rates of growth again. Core PCE prices likely jumped a strong 6.0% q/q AR."

Bloomberg reports that the real yield on U.S. 10-year debt fell to a record low as concerns grew over the outlook for economic growth. The rate, which strips out inflation, fell five basis points to minus 1.127%.

“We are in a regime of growth deceleration in the U.S., as the recovery becomes more mature and broad based, at the same time as inflationary pressures build. The Fed has to look through these pressures, and if anything as supply chain disruption presents downside risks to growth, may actually turn more dovish in the coming months.” - said Peter Chatwell, head of multi-asset strategy at Mizuho International Plc.

CNBC reports that economist Stephen Roach warns Beijing’s crackdown against U.S.-listed China stocks will have widespread market implications.

Roach believes the actions are signaling the early stages of a cold war.

“I am a congenital optimist when it comes to China. But I find these actions really quite disturbing,” Roach said. “China is going after the core of its new entrepreneurial driven economy, and it’s going after their business models.”

According to Roach, the tensions between the world’s two largest economies could get to levels not seen since the early 1970s.

“Even if U.S. companies don’t trade directly with China, virtually everything they touch goes through global supply chains,” said Roach. “So, a chill in the U.S.-China relationship has significant implications for U.S. companies and for investors investing in U.S. companies. You can’t get away from the China connection.”

FXStreet reports that according to FX Strategists at UOB Group, USD/JPY could move higher once 110.90 is cleared.

Next 1-3 weeks: “Our latest narrative was from last Thursday where we highlighted that the outlook is mixed and USD could trade within a 109.50/110.70 range for now. USD subsequently edged higher and upward momentum is beginning to improve. A breach of 110.70 would not be surprising but USD has close above 110.90 before a sustained advance can be expected. The prospect for USD to close above 110.90 is not high for now but would remain intact as long as USD does not move below 109.90 within these few days.”

Bloomberg reports that speaker Nancy Pelosi isn’t backing off her plan to hold up a bipartisan infrastructure package until the Senate delivers a larger, Democratic-only plan expected later this year, prompting a rebuke from Senate Republicans.

Pelosi said  she was “enthusiastic” about the $579 billion bipartisan package and hopes the Senate passes it. Her comments came just as bipartisan negotiators were trying wrap up the final details on their plan, which could be announced as early as Monday.

But Pelosi warned, “I won’t put it on the floor until we have the rest of the initiative.”

Democrats are still working on the details of a follow-on, $3.5 trillion package of social spending and taxes over a decade on top of the $579 billion infrastructure deal, and many want to ensure both packages become law.

Senator Rob Portman of Ohio, a top Republican negotiator on the bipartisan deal, warned Pelosi’s plan could threaten the deal.

“What she has just said is entirely counter to what President Biden has committed to, and what the Senate is doing, which is a two-track process,” he said. “The infrastructure bill has nothing to do with the reckless tax-and-spend extravaganza she’s talking about.”

Pressed on whether that could mean Congress ends up with nothing, Portman said, “If she has her way, we could.”

Portman said the bipartisan negotiators are close to a deal, with a dispute with Democrats over the level of transit funding the last sticking point.

Reuters reports that an Ifo institute survey showed that German business morale fell unexpectedly in July on continuing supply chain worries and amid rising coronavirus infections.

Business climate index fell to 100.8 from a revised figure of 101.7 in June. Economists had expected an increase to 102.1. Meanwhile, the Current Economic Assessment arrived at 100.4 points in the reported month as compared to last month's 99.7 and 101.6 anticipated. The Expectations Index – indicating firms’ projections for the next six months, dropped sharply to 101.2 in July from the previous month’s 103.7 reading and better than the market expectations of 103.3.

Following the release of the IFO Business Survey, the institute’s Economist Klaus Wohlrabe said that “supply problems are weighing on the German economy in both industry and retail.”

Reuters reports that Germany's benchmark 10-year bond yield edged back towards a recent five-month low, as a sell-off in world stock markets bolstered demand for safe-haven sovereign bonds.

U.S. Treasuries also rallied, pushing their prices up and yields lower, as Asian shares skidded to their lows for this year. Concerns over tightening regulations upended Chinese equities.

In early trade, Germany's Bund yield touched -0.43% , within striking distance of five-month lows hit last week.

It was last down 2 basis points on the day, with 10-year yields in most higher-rated euro zone states down a similar amount .

Yields across the single currency bloc have fallen sharply this month as a resurgent Delta COVID variant fuels uncertainty over the global economic growth outlook and investors bet that both world growth and inflation may have peaked.

During today's Asian trading, the US dollar fell slightly against the major currencies, but remained near a 3.5-month high.

The ICE index, which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), fell by 0.05%.

The market's attention is shifting to the Fed's two-day policy meeting, which will be held this week. Since the previous meeting on June 16, when Fed officials refused to mention the coronavirus as a factor affecting the economy, the number of COVID cases has increased. However, many economists still expect that discussions on reducing stimulus measures will begin at the meeting.

While inflation is seen as an upside risk to the projected hiking cycle, COVID-19 and its mutations are a downside risk. Analysts at Rabobank point out there is no update of the dot plot this month, so officially the median FOMC participant will still expect two hikes of 25 bps each in 2023. They argue upside risks to inflation could lead to another upward shift in the dot plot, but the downside risks from a prolonged impact of COVID19 could still push the dot plot in the opposite direction.

FXStreet reports that economists at RBC Economics noted that they expect the initial estimate to show the US economy has expanded by 9.5% in the second quarter.

"As the economic reopening gets going, we expect US GDP to grow by 9.5% in Q2 driven by exceptionally strong consumer spending for the quarter. We look for US personal income to fall by 0.7% in June following a combined 14.8% drop in the prior two months as pandemic-related assistance continues to taper off. The Fed will likely maintain its policy rate at next week’s meeting. Markets will watch for any hints about plans to taper their asset purchases program." 

CNBC reports that Charles Dumas, chief economist at TS Lombard, said that action on climate change is often criticized as moving too slowly. However, with governments increasing spending to aid their post-Covid economies, they may start catching up. 

A key tenet of this is the ever-decreasing cost of electricity per megawatt hour, according to figures from TS Lombard, with costs of solar, offshore and onshore wind dropping over the last 10 years, while gas and coal have remained largely the same.

“Effectively by 2030 the cost of renewable electricity is going to be half that of coal and gas sourced electricity,” Dumas said.

These trends will bring many of the various pledges to reach net zero more closely in sight.

Dumas said that as COP26 (the United Nations Climate Change Conference) approaches, governments need to understand their key priorities, and among them should be infrastructure investments as numerous technological and engineering challenges continue to obstruct renewable energy.

Energy transmission could be another bottleneck, he said. While the developing world, including several African nations, has great potential in developing sites for generating solar power, that power needs to move easily.

Storage and carbon capture are all areas that require hefty investment, Dumas added, if governments are to reach their net-zero targets.

Paul Steele, chief economist at an independent policy research institute called the International Institute for Environment and Development, said that climate action and renewable energy investments will serve the dual purpose of tackling the climate crisis while creating jobs for the post-Covid economy.

“One of the priorities coming out of Covid is to create labor intensive employment. Both in developed and developing countries, you can provide labor intensive employment through renewable energy,” Steele said.

FXStreet reports that FX Strategists at UOB Group noted EUR/USD still remains under downside pressure.

Next 1-3 weeks: “Last Wednesday, we highlighted that EUR ‘is under mild downward pressure and could edge lower but it is too soon to expect a move to the major support at 1.1700’. We added, ‘1.1730 is already quite a strong support level’. Our view was not wrong as EUR struggled to break the short-term support at 1.1750 over the last few days. Despite the lackluster price actions, the downside risk remains intact. Only a break of 1.1835 (no change in in ‘strong resistance’ level) would indicate that the current mild downward pressure has eased.”

RTTNews reports that the latest survey from Jibun Bank showed that the manufacturing sector in Japan continued to expand in July, albeit at a slower pace, with a manufacturing PMI score of 52.2. That's down from 52.4, although it remains above the boom-or-but line of 50 that separates expansion from contraction.

Both output and new order growth eased to six-month lows amid rising COVID-19 cases and ongoing delays in receiving raw materials. Manufacturers also noted that demand for staff eased in July, with the rate of job creation the softest since April. Nonetheless, positive sentiment remained strong overall.

The survey also showed that the services PMI fell to 46.4 from 47.2 in June, while the composite index slipped to 47.7 from 48.9.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1871 (1605)

$1.1839 (317)

$1.1816 (104)

Price at time of writing this review: $1.1781

Support levels (open interest**, contracts):

$1.1717 (5422)

$1.1682 (10603)

$1.1641 (1337)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date August, 6 is 63587 contracts (according to data from July, 23) with the maximum number of contracts with strike price $1,1700 (10603);

GBP/USD

$1.3924 (1243)

$1.3854 (1006)

$1.3806 (658)

Price at time of writing this review: $1.3756

Support levels (open interest**, contracts):

$1.3701 (686)

$1.3678 (917)

$1.3649 (517)

Comments:

- Overall open interest on the CALL options with the expiration date August, 6 is 15529 contracts, with the maximum number of contracts with strike price $1,4000 (1654);

- Overall open interest on the PUT options with the expiration date August, 6 is 18768 contracts, with the maximum number of contracts with strike price $1,3400 (1680);

- The ratio of PUT/CALL was 1.21 versus 1.21 from the previous trading day according to data from July, 23

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.