Dream JOLTS Data

Yesterday was a typical ‘bad news is good news’ day. Risk sentiment in the US and across the globe was boosted by an unexpected dip in US job openings to below 9 mio jobs in July, the lowest levels since more than two years, and an unexpected fall in consumer confidence in August. The weak data pushed the Federal Reserve (Fed) hawks to the sidelines, and bolstered the expectation of a pause in September, and tilted the probabilities in favour of a no hike in November, as well.

NZD/USD Climbs Ahead of Retail Sales

The New Zealand dollar has posted strong gains on Tuesday. In the European session, NZD/USD is trading at 0.5959, up 0.55%. On the data calendar, New Zealand retail sales are expected to decline by 2.6% q/q in the second quarter, compared to -1.4% in Q1.

Sunset Market Commentary

In a repeat of previous sessions, the core bond sell-off slowed and even went slightly into reverse during a rather dull European trading session. The peace lasted again until the start of US trading when Treasuries started slipping away without strong trigger. Intraday US yield changes are currently close to zero compared to yesterday’s record closing highs, but they are pushing for a break above 5% (2-yr), 4.5%(5-yr), 4.34% (10-yr) and 4.42% (30-yr).

Jackson Hole Symposium to Shape Dollar's Path

The Fed’s annual economic symposium will kick off on Thursday, but the highlight will be Chairman Powell’s flagship speech on Friday. With US yields trading at their highest levels of this cycle, his signals on interest rates could either add fuel to this rally or trigger a correction, driving the dollar accordingly.  

China's Crisis of Confidence

China’s economy continues to make daily headlines for all the wrong reasons. Alternating between plunging exports, stagnant domestic demand, and the potential collapse of its shadow banking system, risks opined on in the press are wide ranging and acute. Authorities meanwhile have continued to focus on their structural reform agenda, remaining passive in their support, in stark contrast to prior cycles. Why do authorities remain sanguine as the market roils? Are they justified in doing so?

NZ First Impressions: Retail Sales June Quarter 2023

Today’s retail spending report highlighted that financial pressures are continuing to eat away at households’ purchasing power, with the value of total spending also declining despite very strong population growth and a recovering tourism sector. Indeed, excluding the pandemic period, per capita spending fell to its lowest level in four years.

Is Gold Destined to Lose More of Its Shine?

With US Treasury yields and the dollar marching north, gold has come under selling interest, breaking last week below the key zone of $1,900. Although the short-term picture of the precious metal appears to have turned bearish, whether larger declines are in store will likely depend on Fed Chair Powell’s monetary policy remarks at Jackson Hole on Friday.

D-day for the US Stock Market as Nvidia Earnings Loom

In the past four weeks, the ongoing medium-term bullish trend in the US stock market has started to wobble due to rising longer-term “risk-free” US Treasury yields that increase the opportunity costs of owning riskier assets such as equities. The global benchmark for long-term interest rates, the 10-year US Treasury yield has staged a relentless up move since mid-July 2023 towards 4.34% on Monday, 21 August, surpassing last year’s October peak and reaching a 16-year high.

Australian Dollar Steady After Lackluster PMIs

The Australian dollar is slightly lower on Wednesday. In the European session, AUD/USD is trading at 0.6416, down 0.07%. For a second straight day, the Australian dollar made some headway but then retreated.

Canada: Retail Sales Eke Out Another Gain in June Finishing Second Quarter on a Weaker Note

Retail sales rose 0.1% month-on-month (m/m) in June, coming in a tad stronger than the flat reading reported in Statistics Canada's advance estimate. May's print was revised down to 0.1% m/m from 0.2% reported originally.