Daily Market Comment – Dollar steady ahead of US retail sales, Fed minutes as stocks stay buoyant
- US retail giants lift recession gloom, as Dow Jones and S&P 500 extend gains
- But FX market focused on US data and Fed minutes, dollar stays firm
- Pound and kiwi reverse gains from UK inflation surprise and hawkish RBNZ
Equity traders continue to shrug off persisting recession worries, choosing to bet instead that a severe downturn will be avoided, at least when it comes to earnings. Walmart and Home Depot were the latest to report their quarterly results on Tuesday, kicking off the earnings for the big retailers. Both companies beat their earnings per share and revenue estimates and maintained their existing guidance for 2022.
The S&P 500 and Dow Jones Industrial Average were pulled higher as retail stocks rallied. But the Nasdaq closed lower as major tech stocks fell back slightly.
Growing signs that inflation has probably peaked in America are likely underscoring the belief that the pain for businesses from soaring costs will not get worse in the second half of the year. There also seems to be some relief that Treasury yields have not gone up that significantly even after Fed policymakers overwhelmingly rubbished the idea of a rate cut as early as next year.
Meanwhile, in China, it seems that the government has not totally given up on additional stimulus measures after the country’s premier pressed regional authorities on Wednesday to do more to boost growth. Moreover, China’s central bank cut the one- and seven-day lending facilities on Monday and will likely follow it up with a reduction in the loan prime rate next week.
However, investors remain concerned that policymakers are still not doing enough to stimulate the stalling economy, which is being crippled by constant snap lockdowns.
Nevertheless, most indices in Asia were in the green today, European shares opened higher and US stock futures were marginally in negative territory ahead of earnings from Cisco and Target.Dollar eyes retail sales and FOMC minutes
In the FX space, optimism was in far shorter supply, however, as the US dollar held firm near yesterday’s 3-week highs against a basket of currencies, while the yen was mixed.
Data out of the US continues to provide conflicting views on the state of the economy. Housing starts and building permits both declined in July, but industrial production rose by more than forecast.
The real focus, however, is on today’s retail sales numbers for the same period due at 12:30 GMT, as investors will want to gauge the strength of consumer spending, while the minutes of the Fed’s July meeting will also be watched closely at 18:00 GMT.
The minutes are unlikely to signal a slowdown in the pace of tightening and may even jolt markets if they disclose that policymakers discussed raising rates by a full percentage point.Antipodeans slip, hot UK inflation supports pound
The Reserve Bank of New Zealand may have already set the tone for a hawkish surprise after it lifted rates by 50 basis points earlier today. Although the size of the hike was expected, the Bank disappointed some who were anticipating a shift into slower gear. Instead, the RBNZ raised its projection of where it expects the cash rate to peak and signalled that it will get there sooner than previously anticipated.
The New Zealand dollar immediately jumped on the announcement but the boost proved short-lived and is now trading lower on the day versus the greenback. The Australian dollar fell even more, dipping below $0.70 after wage growth figures out of Australia slightly missed the forecasts.
The euro and pound fared better, climbing marginally, although the pound was also off its earlier highs when it spiked on the back of stronger-than-expected CPI data. UK inflation surged to 10.1% y/y in July, topping forecasts of 9.8%. Core inflation also beat expectations, spurring investors to almost fully price in a 50-bps rate increase in September.
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.