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Flash: US equities a beacon of strength – Deutsche Bank

FXstreet.com (New York) - Yesterday’s weaker US dataflow and resulting GDP downgrades eased some fears of a near-term Fed tapering, note Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank.

It also helped the S&P500 post its eighth consecutive gain, which is its longest winning streak since January 2013. Indeed both the S&P500 and Dow closed at fresh all-time highs earlier this week – a trend that ended today. Indeed, US equities have had a very robust start to the month of July. As it stands, the S&P500 has experienced only one negative day out of 10 this month, and the one negative day that we did see resulted in a minor loss of -0.05%. Moreover, “The combination of better equity market sentiment and lower US rates helped major credit indices including the European iTraxx (-3bp), Crossover (-14bp) and US IG (-1bp) grind lower as they move steadily towards series tights.” the analysts add.

Flash: GBP likely to be driven by domestic data – BMO Capital Markets

The very small downside miss in UK June inflation reported earlier today probably didn’t warrant even a knee-jerk reaction in the GBP on the basis of fundamentals alone, but we suspect market participants continue to adjust their overall GBP exposures in front of the July minutes due for release tomorrow, which admittedly could cause some volatility, notes Stephen Gallo at BMO Capital Markets.
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Flash: AUD/USD, bearish bias targets 0.8880/0.8770 - JPMorgan

Despite the AUD/USD has finished the U.S. session above the 20-day EMA, the first time that happens since April 30th, Niall O'Connor, FX Strategist at JP Morgan Securities, still thinks "the late-week breakdown in AUD/USD suggests the bearish bias is likely to extend into the coming week."
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