Today's Market Pulse

Market Overview

Investors and analysts are beginning to doubt the US economy due to a slowdown in manufacturing activity. The ISM Manufacturing PMI was below 50 for 17 months before briefly rising above it in April, only to return to contraction for the past two months.

As investors anticipate a potential continued slowdown, the dollar and yields are expected to decline. Job openings have decreased from 8.36 million last month to 8.06 million this month, continuing a steady decline since May 2022. Unemployment claims have also been on an upward trend since January 2024.

This data has heightened speculation that the Fed may cut rates this year. Nicholas Colas, co-founder of DataTrek Research, noted, “Markets are now considering two rate cuts as the most likely Fed policy for the rest of the year. The softer-than-expected economic data from the past week explains this shift in thinking.”

In the stock market, the Dow Jones rose by 0.34%, the S&P 500 by 0.14%, and the NASDAQ Composite by 0.17%. However, the Russell 2000 saw a decline of 1.25%. Benchmark 10-year note yields fell 7 basis points to 4.332%, reaching as low as 4.314%, the lowest since May 16. Two-year note yields fell 5 basis points to 4.773%, reaching 4.749%, also the lowest since May 16.

Westpac economist Jameson Coombs commented, “The sharper move at the long end suggests that weaker manufacturing data is unlikely to influence near-term Fed rate cuts but may indicate the market's view of neutral interest rates as U.S. economic exceptionalism diminishes.”

GOLD

The gold market has remained relatively stable with minor fluctuations. However, the day ended positively as investors speculated about a slowdown in the US economy. Currently, gold is trading between 2314.890 and 2332.174. We are awaiting further economic data releases, including Employment and Services PMI. If these indicators show a slowdown, we anticipate gold prices to rise and the dollar to fall.

SILVER

Unexpectedly, silver has dropped below 29.900, confirming the M formation visible on the chart. If the price dips below 29.018, we will adjust our bias. We expect the price to consolidate above this level before making any decisive moves.

DXY

The dollar index is steadily declining, confirmed by the prominent M formation. We expect market movements to be influenced by upcoming news releases. We anticipate a significant drop in the dollar throughout the week. It's crucial to stay vigilant regarding dollar pairs and monitor price movements closely.

GBPUSD

The pound is on an uptrend, supported by good volume and momentum. The price has repeatedly tested the 1.27938 level without breaking through. We are bullish on GBPUSD and anticipate a potential trading signal soon, correlated with upcoming news.

AUDUSD

The AUDUSD market is showing bullish tendencies, with price action suggesting confirmation of a W formation. The price is currently testing 0.66541 after failing to reach 0.66145. We expect the price to break through and continue its uptrend.

NZDUSD

The NZDUSD market is gently rising and remains bullish. We expect the price to break out of its current range and continue its upward trend. The price has stayed above 0.61659 and is trending higher.

EURUSD

The EURUSD market has risen above 1.08950 and is expected to continue its ascent. However, the price is currently reacting within the range of 1.08950 to 1.08543. We anticipate the uptrend to persist.

USDJPY

The yen has rebounded significantly after yesterday's session, moving from above 156.516 to below 155.704. The price is supported at 154.658 and is expected to range around this level. The Bank of Japan will continue efforts to control the yen's strength, and we expect the yen to strengthen further until the BoJ intervenes.

USDCHF

As anticipated, USDCHF has fallen without encountering significant support until reaching 0.88886. With the bearish trend confirmed, we are looking for a suitable entry point.

USDCAD

CAD weakness is evident as it underperforms against its peers. We expect a decline from the current levels, with the market trading between 1.36563 and 1.37435.