Análisis de mercado diario

The second reading of the Q2 US GDP of two percent was in line with market expectations, which allowed the Dollar Index (DXY) to edge higher, having erased most of Friday’s losses. Although investors are well aware of the slowdown in the US economy, the latest data underscored the strength of consumer spending (which makes up over 60 percent of US GDP), and shows that the primary growth driver in the world’s largest economy is still resilient.

Still, the headline figure suggests that the protracted US-China trade tensions are weighing on other sectors of the US economy, such as exports and investments. Faced with slowing growth prospects in the second half of 2019, the Federal Reserve’s decision to lower US interest rates appears justified, with another Fed rate cut widely expected at the September FOMC meeting.

Moving forward, shifting market expectations surrounding the Fed’s policy path are set to sway DXY, as the Fed’s data dependence continues being tested in the interim.

Sterling's politically-driven slump buoys DXY

The Dollar Index has also been able to preserve its gains, due in some part to the weaker Pound, which accounts for 11.9 percent of DXY. Given the rising prospects of a no-deal Brexit, in light of the suspension of the UK parliament beginning September 9, Sterling should find itself bogged down by the political uncertainties.

EU’s economic woes continue to drag EURUSD lower

The bright spot in the US economy, namely domestic consumers, stands in stark contrast to the EU’s overall economic outlook, with such disparity weighing on the Euro. The bloc’s currency is also contending with the fallout from protracted US-China trade tensions, along with Brexit uncertainties and Italy’s political turmoil, which makes for an overall dismal outlook on EURUSD.

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Asian stocks are following their US counterparts lower, with markets reluctant to get ahead of themselves in hoping for a near-term resolution to the US-China conflict. The intensifying concerns over the state of the global economy have only soured the outlooks for open and trade-dependent Asian economies, with such fears feeding into the performances of risk assets.

Until there is a meaningful breakthrough in the US-China impasse, it would be a big ask for Asian assets to carve out substantial gains over the near-term, while a more pronounced slowdown in the global economy will only reflect negatively in the currencies across Asia and emerging-markets.

Dollar bulls in “never-say-die” mode as investors await Fed minutes, Powell’s speech

Asian currencies are having a tough time battling against the US Dollar’s never-say-die performance, even as the Greenback’s attempt at a new 2019 high has lost some steam ahead of the release of the Fed’s July meeting minutes. Markets are hoping that the latest FOMC minutes will provide some insights into the decision three weeks ago to cut US interest rates for the first time since 2008. Investors are clamouring for some sorely-needed clarity on the Fed’s policy bias, given Fed chair Jerome Powell’s convoluted guidance following the FOMC’s end-July meeting.

Markets will also be keenly watching Powell’s speech this Friday for more clues, whereby another fudged policy outlook from the Fed chair could trigger another bout of volatility in the markets. As things stand, markets are currently pricing in three more Fed rate cuts throughout the remainder of the year. Despite the expected dovishness out of the world’s most influential central bank, Dollar bulls are not ready to relinquish the reins to the bears, as they keep the Dollar index above the psychologically-important 98 level for the time being. The Greenback’s resilience continues being fueled by the deteriorating global economic outlook, which has spurred market participants towards the safety of the Dollar.

Italian political risks add to Euro’s woes

The Euro has been testing the 1.11 support level against the Dollar so far this week, as Italy’s political turmoil adds to the dismal outlook on the bloc’s currency. The heightened political risks in Italy are fostering doubt over policy continuity, especially with regards to Italy’s fiscal deficit, which has been a major point of contention with the EU establishment.

The Euro has already been weighed down by external headwinds due to the protracted US-China conflict, along with Brexit uncertainties, with the economic pressures prompting an overtly dovish bias out of the European Central Bank. The latest ECB minutes as well as the PMI readings out of EU-member economies due over the coming days could exert more downward pressure on the Euro, should markets get the sense that imminent monetary policy stimulus is sorely needed. Given the increasingly evident downside risks, markets are left with scarce cause for optimism with regards to the EU, considering that the Euro has already weakened by some 3.2 percent against the US Dollar so far this year.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

The Euro is staging a modest recovery against the Dollar despite Italy’s Prime Minister Guiseppe Conte confirming that he will resign ahead of a no-confidence vote.

It remains unclear whether this will open doors to a snap election or if parliament will be asked to try and form a new government. Whatever the outcome, it will certainly have a lasting impact on the Euro which remains entangled with a fierce battle with domestic and external risks.

Fears over the largest economy in Europe heading for a deep recession mixed with speculation over the European Central Bank cutting interest rates in September are positioned to weaken the Euro. An appreciating Dollar should compound to the downside pressure and open doors towards 1.1000 and lower on the EURUSD.

Taking a look at the technical picture, the EURUSD remains bearish on the weekly and daily charts. Sustained weakness below 1.1100 is seen triggering a decline towards 1.1000 and 1.0900, respectively.

Sterling capped below 1.2200 

The road ahead for Sterling is filled with many obstacles and potholes as Brexit haunts investor attraction towards the currency.

This sentiment continues to be reflected in the Pound’s depressed price action as gains remain capped below the 1.2200 resistance level. Sustained weakness under this level should encourage a move back towards 1.2100 and 1.2000, respectively. 

While a breakout above 1.2200 has the potential to trigger a technical rebound higher, the next major wall of resistance can be found around 1.2400.

USDJPY outlook tilts to downside on risk aversion 

Market caution is set to boost appetite for safe-haven assets such as the Japanese Yen.

The Japanese Yen has appreciated against every single G10 currency since Monday and is positioned to push higher on risk aversion. Technical traders will continue closely observing how the Japanese Yen behaves around 106.35.
Further downside remains on the cards are long as prices can keep below the 107.00 resistance level. The intraday breakdown under 106.50 should pave a path towards 106.00 and 105.50.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

Asian stocks are mixed despite the stronger close for US equities, as markets limp towards the weekend. The recent flare-up in US-China tensions continues to weigh on the collective mind, as investors hunker down for what is feared to be a long, drawn-out dispute between the world’s two economic powerhouses.

At this point in time, it’s hard to see either the US or China having enough will to resolve their differences, much less before the new US tariffs on Chinese goods kick in on September 1. Should the barriers to global trade be raised next month, that would be another kick in the gut for risk appetite and may prompt another selloff in risk assets.

Gold garners more suitors, given scarcity of viable alternatives

Gold is a clear winner from the elevated concerns surrounding the global economy, with Bullion remaining above the psychologically important $1500 level, near its highest levels since 2013. Gold is garnering more and more suitors as investors have scarce viable alternatives in a global landscape that’s plagued by risk aversion. Although some segments of the market will test every opportunity to wade further out into risk-on territory, the long shadow cast by the ongoing US-China conflict should ensure that Gold can hang on to most of its 2019 gains, with the $1450 level serving as the stronger support level below $1500.

Euro’s August gains may prove fleeting

The Euro has managed to drag itself back up by 1.1 percent against the US dollar so far this month, with EURUSD hovering mostly around 1.12 in recent days. However, such gains may prove fleeting, as rising political tensions in Italy threaten to exacerbate the Euro’s outlook.

Political turmoil in Italy would add another layer of risk to the Euro, with investors already contending with the ill-effects from Brexit uncertainties as well as the protracted US-China trade conflict. Should the Federal Reserve pour cold water on markets that are clamoring for more US interest rate cuts over the course of the year, any Dollar resurgence is set to cost the Euro, with scant upside catalysts evident for the bloc’s currency in the immediate future.

Brent wallows in bear market, bogged down by demand-side uncertainties

Having fallen into a bear market, Brent futures are struggling to create a sustained lift-off from its 7-month lows, currently trading around $57/bbl. With the US-China standoff still a drag on global demand for Oil, investors are questioning what else OPEC+ producers can do to stem the price declines.

Despite the pledged supply cuts by OPEC+ through March 2020, major Oil producers may be called into action again soon with more supply cuts. Even then, with US shale output still resilient, coupled with the demand-side erosion due to the heightened barriers to global trade, it’s getting tougher for Oil to swim against the bearish tide. Present market forces only serve to reinforce the notion that Oil prices will remain at the mercy of the protracted US-China conflict.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

Italy has been thrown back into the spotlight this week after the European Commission (EC) asked for “clarification” on the nation’s deteriorating debt situation.

Should this development lead to another round of disagreements between the EC and Italian authorities, it certainly will not bode well for the Euro which is already hanging on cliff’s edge to reaching 1.10 for the first time since May 2017.

With the EC already writing a letter to the Italian government on its financial conditions and giving Rome only until Friday to respond before slapping them with a €3.5billion fine, another speedbump is on the road for the Euro and this risks becoming a nasty bump in the road fast. When considering how Italy’s debt is the second highest in the Eurozone after Greece with public debt reaching roughly around 132% of GDP in 2018, fears are looming over Rome potentially triggering another debt crisis – a highly unfavourable scenario for the Eurozone.

Renewed concerns over Italy’s budget policy have come at a time where headwinds are already circling around the Eurozone economy like a tornado on the downside risks it faces from the persistent US-China trade tensions, and also when question marks remain over whether the Trump administration will potentially impose tariffs on European cars and auto parts.

The Eurozone manufacturing sector is already raising eyebrows with its PMI results for May drifting further into contraction territory and auto tariffs will have terrible consequences for the European economy.

All in all, the threat of US-EU trade disputes negatively impacting growth coupled with political risks are the themes to watch for further punishment in the Euro moving forward. An appreciating Dollar due to the risk-off environment in global markets is also rubbing salt into the wound of an injured Euro, and the clock is ticking on the EURUSD tumbling towards 1.10 and beyond.

Looking at the technical picture, the EURUSD remains under prolonged pressure on the weekly charts with prices trading marginally above two year lows with prices narrowly above 1.113 as of writing. The path of least resistance points south with the next key level of interest at 1.11. A solid weekly close below this point opens a clear path for the Euro to spiral below 1.10.

Nevertheless, the upcoming US GDP reading for later on Thursday could provide some light at the end of the tunnel for Euro buyers. The shining knight to protect the Euro from entering 1.10 would need to be a sharp downside revision to US GDP data, weakening the ongoing Dollar demand on the reminder that United States economy is also exposed to global growth concerns.

Commodity spotlight – WTI Oil

Oil prices are poised to become extremely sensitive and highly reactive to any news revolving around supply and demand factors ahead of the OPEC meeting in June.

This sensitivity has already been illustrated following prices attempting a push higher yesterday after an industry report showed a decline in U.S Crude inventories. The medium to longer-term outlook does remain in favour of further declines in the price of Oil.

Concerns over persistent US-China trade tensions, and more escalations ahead are a fast-moving steam train for downgrades to global growth. This will impact demand for Oil in a negative manner, which is good news for sellers.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.