Bank of England Review

The Bank of England (BoE) hiked the Bank Rate (key policy rate) by 25bp to 5.25% with 6 members voting for a 25bp hike, two members for 50bp and one member voting for keeping the Bank Rate unchanged.

ISM Index Shows Services Sector Expansion Continued in July

The ISM Services PMI index pulled back to 52.7 in July from 53.9 in June. This falls short of the 53.1 percent reading consensus was expecting. This is the seventh consecutive month of expansion for the services sector.

Global Bond Market Selloff Extends after BOE signals more tightening ahead

Wall Street is watching a global bond market selloff get uglier as US stocks waver ahead of massive earnings from Apple and Amazon. A lot of economic data confirmed how resilient the US economy remains. Both initial jobless claims still remain low and the ISM services employment component supports the argument that the Fed might need to deliver more tightening in November.

Strong USD Sends Gold to a 3-Week Low

Gold should start attracting once we see the bond market selloff cool off.  The US might have some debt issues over the coming years and that should keep gold supported.  While the US economy has been very resilient, the Fed’s work will likely be done after one more rate hike.  Gold should start to see stronger safe-haven flows as the stock market seems like it won’t be making a run towards record high territory anytime soon. 

China Announced Several Measures to Rejuvenate Its Capital Markets

China this morning announced several measures to rejuvenate its capital markets. It is part of a series of other decisions it took earlier this week in the broader context of kickstarting the ailing economy. The country also said additional support is coming up. Chinese stocks were thrilled at first but have been paring gains as the session evolved.

Crypto Awaiting a Signal to Choose Its Direction

The crypto market capitalisation has seen little change over the past 24 hours, stabilising around $1.165 trillion. The Fear and Greed Index is also little changed at 54 since the middle of last week. The market has been waiting for new signals, equally ready to return to growth or continue to fall.

EUR/USD Flat Ahead of Nonfarm Payroll Report

The euro has shown sharp swings lately.  EUR/USD climbed to 1.1275 on July 18th, its highest level since February 2022. It has been all downhill since then, with the euro tumbling over 300 basis points.

USD/CAD Shrugs After Soft Nonfarm Payrolls

The Canadian dollar is showing limited movement on Friday. In the North American session, USD/CAD is trading at 1.3360, up 0.06%. Canadian and US job numbers were soft today, but the Canadian dollar’s reaction has been muted.

Canada's Labour Market Sheds Jobs in July 

Canada's labour market continues to loosen. With the population/labour force booming faster than the jobs market can keep up, the unemployment rate has risen to 5.5% from 5.0% in just three months. Over 2023, the number of unemployed people has increased in 6 of 7 months, causing the total number of unemployed to rise by 123k. This loosening follows a +10% drop in the number of job vacancies.

US: Payrolls Continue to Slow on a Trend Basis in July, While Unemployment Rate Ticks Lower 

Job growth on a trend basis continues to move in the right direction, with the six-month moving average having pushed steadily lower in each of the last nine months. While certainly a good sign, today's pace of hiring is still running well above what's consistent with trend growth in the labor force, let alone anything weaker that would result in any sustained upward pressure on the unemployment rate.