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Markets Update: PredictIT Indicates Increased Republican Victory Likelihood. China's Economic Data Disappoints Expectations. Fed Chair Powell Scheduled to Speak Later Today, Markets Eye September Rate Cut.
Economic Calendar
Global Markets Roundup: July 15, 2024
On Monday, U.S. bond futures declined while the dollar strengthened, as investors bet that recent political turmoil surrounding U.S. presidential candidate Donald Trump increased his chances of winning the election, thereby heightening political uncertainty. With Japanese markets closed for a holiday, trading volumes were thin. Early market movements saw a modest rise in the dollar, coupled with a dip in Treasury futures.
Historically, the prospect of a Trump presidency has driven Treasury yields higher due to expectations that his economic policies would lead to increased inflation and debt. Proposed tariffs on imports are seen as inflationary while potentially reducing consumer spending, and migration restrictions could tighten the labor market, exerting upward pressure on wages. PredictIT, an online betting platform, shows the likelihood of a Republican victory rising to 66 cents from 60 cents on Friday, while the odds for a Democratic win stand at 38 cents. This suggests Republicans are currently twice as likely to win the election compared to Democrats.
Futures for 10-year Treasuries fell by 13 ticks (TYc1), while cash bonds remained untraded due to the Japanese holiday. S&P 500 futures ES1! and Nasdaq futures NQ1! both saw slight gains. Despite the closure of Japan's Nikkei index NI225, futures (NKc1) traded at 41,285 compared to a previous cash close of 41,190. Mainland stocks (000001) along with Hong Kong's Hang Seng index HSI were down, with the latter dropping by 1%.
Kicking off a busy week, China released disappointing economic data just ahead of a major five-year gathering of top officials from July 15-18. The world's second-largest economy grew by 4.7% in the second quarter compared to the previous year, below the forecasted 5.1%. Additionally, June retail sales growth was an annualized 2%, missing expectations of 3.3%, which increases pressure on Beijing to introduce supportive measures. New home prices experienced their steepest decline in nine years.
The dollar appreciated by 0.3% against the Japanese yen to 158.05 USDJPY, though it remained below its recent high of 161.96, which was influenced by suspected market intervention. The euro dipped slightly to $1.0887 EURUSD, and the dollar index firmed marginally to 104.26 DXY. The yuan USDCNY faced pressure at 7.2608 per dollar. The Australian dollar AUDUSDÂ fell 0.08% to $0.6778, while the New Zealand dollar NZDUSD lost 0.29% to $0.6100.
In the commodities/agricultural commodities market, GOLD remained steady at $2,408 an ounce, slightly below last week's peak of $2,424. Oil prices saw minor increases, recovering from a drop on Friday amid signs of progress in ceasefire talks between Israel and Hamas. Brent crude BRN1! rose 8 cents to $85.11 a barrel, while U.S. crude CL1! also gained 8 cents, reaching $82.29 per barrel. Three-month copper on the LME HG1! traded 0.2% higher at $9,892.50 per metric ton. Corn ZC1! shed 0.8% to $4.11-1/2 a bushel. CBOT wheat ZW1! edged 1.3% lower to $5.43-3/4 a bushel.
Among the major companies reporting earnings this week are Goldman Sachs, BlackRock, Bank of America, Morgan Stanley, Netflix, and Taiwan Semiconductor Manufacturing.
Looking ahead today, Federal Reserve Chair Jerome Powell is scheduled to speak later today, and markets anticipate his comments on last week's subdued inflation data. Later this week, the U.S. will release key economic data including retail sales, industrial production, housing starts, and weekly jobless claims. The European Central Bank is set to meet on Thursday, with rates expected to hold steady at 3.75%, ahead of a likely rate cut in September.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team
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