Hot Economic Data Day

Market Overview

Yesterday, FED Chairman Powell commented on rate cuts after data showed persistently tight labor markets. Prospects of rate cuts this September are ever higher after Powell said, “The Fed needs more data before cutting rates to ensure recent weaker inflation readings properly reflect underlying price pressures.”

The Labor Department reported on Tuesday that job openings, a measure of labor demand, rose by 221,000 to 8.140 million on the last day of May, the lowest level since February 2021 and slightly ahead of Wall Street expectations.

Other than that, Monday's data showed contractionary ISM Manufacturing PMI by 20 basis points from last month‘s 48.7 to this month’s 48.5—numbers away from the expected 49.2. 

Dovish comments led the U.S. Treasury notes to dip and the dollar to weaken, while Global stock exchanges found strength.        

The yield on benchmark U.S. 10-year notes fell 4.9 basis points to 4.43%.

The Dow Jones Industrial Average rose 0.41% to 39,331.85, the S&P 500 gained 0.62% at 5,509.01 and the Nasdaq Composite advanced 0.84% to 18,028.76.

More U.S. news is coming in later for Payrolls, Unemployment claims, and Services PMI. Later this week, we will also see FOMC Meeting Minutes, Hourly Earnings, Employment change, and Unemployment rate. This will reflect directly onto market expectations for a rate cut.

Traders are currently pricing in about a 67% chance of a Fed rate cut in September, according to CME FedWatch Tool.

GOLD -Not much action happening in the market as the price settles at 2332.174. Our analysis is the same as yesterday‘s. We wait for further price action to determine what may happen to this chart. However, with the current outlook on FED Powell’s comments looking to cut rates sometime soon, we may find the metals market find more capacity to move bullish.

SILVER -Silver is starting to creep higher towards 29.900. We continue to watch how this will turn out as further data will soon come out.

DXY - The dollar has fallen lower to trade below 105.840. We continue to see how the price will go as it has not moved as dramatically despite dovish comments from FED Chair Powell. However, after that comment, we may see the price continue to drop from here as prospects for a bearish market continue.

GBPUSD -The pound won against the dollar and bounced off the anchor point at 1.26487. We may continue to find a bullish trend in the said trend if we continue to find dovish data.

AUDUSD -AUD has found support at 0.66541 and is looking to continue higher. However, we can see that there is not enough momentum in the chart to carry it through. Thus, we continue to wait and see how the price will go.

NZDUSD - NZD continues to trade below 0.60954 but has found recovery after failing to reach 0.60455. We may find a return to trade into the range above 0.60847, but we wait to see how the price will turn out.

EURSUD - EUR has recovered since last months trading season. However, we can find it consolidating between 1.07637 and 1.027240. We continue to wait and see how the price will go from here.

USDJPY - The yen stagnated at around 161.700 after yesterdays dovish comments. However, We continue to see a rising trend coming into this market as the actual weakness of the yen is observed. 

USDCHF  -The weakness of the CHF continues to be observed as their cutting of rates last month drives the weakness of its currency. However, we can see that there was a slight reaction coming into the market after dovish prospects from comments yesterday. Thus, we continue to observe how the price will go but there is a chance for the market to continue its uptrend.

USDCAD -USDCAD is found consolidating between 1.37435 and 1.36612. The price bounced back down with the CAD finding recovery after yesterday‘s dovish comments. We may expect the CAD to win in the next months as the BoC continues to weigh its data before cutting rates. But as we saw with their economy’s performance last month, we may see them holding off on cutting the rate depending on how it will turn up this month and the next.