Today's Financial News

Market Overview

Investors and analysts start to doubt the US economy after seeing a slowdown in business activity in the manufacturing sector. Before April's recovery, the ISM Manufacturing PMI was under the 50 mark for 17 months. After crossing slightly above the 50 mark in April, the manufacturing sector went back to contraction and recorded a slowdown for the second month in a row. 

With investors likely seeing a potential continuation in the slowdown, we may expect to see a lower dollar and yields. Job openings are also seen to unwind as JOLTS Job openings reports came out from 8.36M openings last month to only 8.06M openings this month. This decline has been steady since the high of May 2022. 

Unemployment claims have also been on an uptrend since the first DoL release last January of 2024.

This data further raises investor speculation of the possibility that the FED may cut rates this year. 

“Markets are back to thinking two rate cuts is the likeliest path of Fed rate policy over the rest of the year,” said Nicholas Colas, the co-founder of DataTrek Research. “The past week's softer-than-expected economic data explains the rethink.”

On the equities side of things, The Dow Jones recorded a gentle high and went up by 0.34%, the S&P 500 is up by 0.14%, along the NASDAQ Composite by 0.17%. On the other hand, the Russel recorded a slowdown at 1.25%. 

On the side of the yields, benchmark 10-year note yields fell 7 basis points to 4.332% and got as low as 4.314%, the lowest since May 16. Two-year note yields fell 5 basis points to 4.773% and reached 4.749%, also the lowest since May 16.

“The sharper move at the long-end is a sign that weaker manufacturing data is unlikely to shift the dial on Fed rate cuts near term, but is perhaps a signal of the market's view of neutral interest rates as U.S. economic exceptionalism fades,” Westpac economist Jameson Coombs said in a note.

GOLD- The market has remained consolidated with slight ups and downs. However, the day closed on a positive after investors speculated a slowdown in the US Economy. However, as prices stand, it is trading under 2332.174 and is above 2314.890. We are waiting for further data releases as Employment and Services PMI data is set to be released later. A slowdown in the following will cause the GOLD to rise along with the fall of the dollar.

SILVER- Contrary to our expectations, the Silver has fallen under 29.900. This move has confirmed the validity of the M formation that can be seen in the chart. With that, we will shift bias soon if the price succeeds in going under 29.018. We expect the price to consolidate for a while above the said structure before any sure moves.

DXY- The dollar is on a steady fall, confirmed by the big M formation. We speculate the news later be used as a means to further move the markets today. With that in mind, we expect the dollar drop to be massive throughout the week. However, there is only so much that speculation can do from the actual market data release and price prints. With that, we suggest everyone remain aware of dollar pairs and see how prices will move.

GBPUSD- The pound has been showing an uptrend with good volume and momentum. The price has failed to reach structure multiple times while testing the validity of the 1.27938. We call a bullish GU. A good trading signal may present itself to us soon, in correlation to the news later.

AUDUSD- The market is showing a bullish structure as the price action will soon show confirmation for the W formation. We see the price failing to reach 0.66145 and is testing 0.66541. We expect the price to break through the structure and continue its uptrend.

NZDUSD- The market is bullish and is showing a gentle rise. We expect the move later to allow the price to move away from the range and continue its trend upward. The price failed to go below 0.61659 and is trading upward.

EURUSD- The market has risen above 1.08950 and is expected to only rise from here. However, we see the price reacting back to the range at 1.08950 and 1.08543. We expect to see the price continue its uptrend.

USDJPY- The yen has recovered greatly after yesterday's trading session. From the price ranging above 156.516 to trading below 155.704. The price is held up by 154.658 and is expected to range here. The BoJ will continue to attempt to control the yen's strength. With that, we expect the yen strength to recover across the board until the BoJ finds it acceptable.

USDCHF- As we expected from yesterday's analysis, the price has indeed fallen without any apparent structure to stop it until it reached 0.88886. We are waiting for a proper entry point for this market as the bearish trend is confirmed.

USDCAD- The CAD weakness is apparent as its peers continue to experience gains against the greenback. We wait for how the price will trade but we expect a drop from where prices are. Currently, the market is trading slightly above 1.36563 and is under 1.37435.