Daily analysis 07/25/2024

25. 7. 2024 - Josef Brynda

Latest news

• Tech Sector Leads US Market Lower with Significant Declines in Nasdaq and Russell 2000
• Dollar slips ahead of GDP data; euro rises and yen surges
• Strengthening Yen and Weakening Commodity Currencies Reflect Global Economic Concerns
• U.S. GDP Data Expected to Show Annualized Growth of 2.0% in Second Quarter
• Inflation Slows Considerably in Q2, GDP Price Index Falls to 2.6%
• Euro Edges Higher Despite German Business Morale Falling for Third Consecutive Month
• European Central Bank Expected to Maintain Interest Rates Amid Economic Uncertainty
• British Pound Falls Ahead of Bank of England Policy-Setting Meeting
• Bank of Japan Expected to Consider 10 Basis Point Hike and Reduce Bond Purchases
• Analysts Praise Timing of Japanese FX Intervention Amid Dovish Fed Reappraisal
• U.S. Dollar Weakens as Market Awaits Key Economic Data and Fed Meeting
• Market Volatility Increases Ahead of Key Economic Data Releases
• Gold Prices Dip Below $2400 as Oil Rebounds Amid Inventory Drops and Copper Declines
• US Yield Curve Steepens Sharply Amid Mixed Market Signals and Economic Data
• Key Economic Data Releases Highlight Concerns Over Global Economic Recovery
• China Surprises with One-Year Policy Interest Rate Cut to Stimulate Economy
• Netanyahu Vows to Press On in Gaza in Defiant Speech to Congress
• Scholz Clings to Reelection Plan Despite Germany’s Economic Struggles
• IBM and Newmont Report Strong Earnings, Boosting Market Confidence
• Ford Motor Misses Earnings Estimates, Shares Drop Significantly
• Market Volatility Surges with Significant Increases in VIX and VIX1D

News summary

• The Dollar Index, which tracks the greenback against a basket of six other currencies, fell 0.2% to 103.950, extending an overnight decline as confidence grows that the Federal Reserve will cut interest rates in September.
• The weakening of the U.S. dollar and the strengthening of the yen and euro suggest a shift in investor sentiment towards these currencies. This could result in increased demand for the yen and euro, potentially leading to further appreciation against the dollar. Forex traders might seek safe-haven currencies like the yen amid uncertainty, while the euro could benefit from relative stability in the Eurozone.
• Gross domestic product data for the second quarter, due later in the session, is expected to show annualized growth of 2.0%, higher than the 1.4% growth seen in the first quarter but slower than the 4.2% pace in the second half of last year.
• If the GDP data meets or exceeds expectations, it could provide some support to the U.S. dollar by indicating economic resilience. However, if the data disappoints, it could reinforce expectations of a Federal Reserve rate cut, leading to a weaker dollar. The euro might gain strength if the U.S. economic outlook appears less robust.
• The GDP price index is expected to show a fall to 2.6% from 3.1%, indicating a considerable slowdown in inflation last quarter, ahead of Friday’s PCE price index data, the Federal Reserve’s favored gauge of inflation.
• Lower inflation data supports the case for a Federal Reserve rate cut, which can lead to a depreciation of the U.S. dollar. This scenario could benefit the euro, as a weaker dollar makes the euro more attractive to investors. Forex markets may see increased trading activity as traders position themselves for potential changes in U.S. monetary policy.
• GBP/USD traded 0.2% lower at 1.2885, falling back from the 1.30 level ahead of next week’s Bank of England policy-setting meeting, with expectations that the central bank may trim interest rates.
• A weaker British pound can lead to increased volatility in forex markets as traders adjust their positions ahead of the Bank of England meeting. If rate cuts are confirmed, the pound may face further depreciation, affecting cross-currency pairs involving the euro and dollar.
• The U.S. dollar weakened amid expectations of Federal Reserve rate cuts, with the Dollar Index falling and the yen strengthening ahead of the Bank of Japan meeting. Anticipated U.S. GDP growth and slowing inflation reinforced expectations of monetary easing. The euro edged higher despite declining German business morale, while the British pound fell ahead of a potential Bank of England rate cut. Increased market volatility and strategic Japanese FX interventions also influenced forex dynamics, suggesting potential depreciation of the U.S. dollar and mixed impacts on the euro.

Daily analysis 07/24/2024

24. 7. 2024 - Josef Brynda

Latest news

• US Stocks Rebound After Biden Exits Presidential Race
• Nikkei and Hang Seng Indices Drop Amid Market Uncertainty
• Yen Strengthens on BOJ Rate Hike Speculation
• Gold Prices Recover as Oil and Copper Continue to Drop
• Treasuries End Mixed; Yield Curve Steepens
• Eurozone and U.S. PMI Data to Influence ECB Policies
• U.S. Q2 GDP Data Expected to Show Economic Growth
• U.S. PCE Data Could Confirm Fed Rate Cut Expectations
• Geopolitical Tensions in Gaza Impact Oil Prices
• Shapiro, Kelly, and Cooper Lead as Harris’s Potential Running Mates
• Secret Service Director Resigns Following Trump Shooting
• Macron Delays Naming New Prime Minister
• Typhoon Gaemi Disrupts Taiwan with Work Halts and Flight Cancellations
• Lockheed-Martin Beats Q2 Earnings Estimates
• General Motors Faces Loss in China Despite Strong Earnings
• LVMH Reports Lower Than Expected Q2 Revenue
• Tesla Expects Lower Vehicle Volume Growth in 2024
• Alphabet Exceeds Q2 Sales and EPS Estimates
• Visa Reports Strong Q3 Net Profit
• Deutsche Bank Reports First Quarterly Loss in Four Years

News summary

• US stocks saw a rebound following President Biden's decision to exit the presidential race, which brought some relief to the markets. Asian markets, specifically the Nikkei and Hang Seng indices, closed lower due to ongoing market uncertainties.
• The Japanese yen continues to strengthen as speculation grows regarding a potential rate hike by the Bank of Japan. Gold prices have seen a recovery, while oil and copper prices continue to decline amid market uncertainty.
• US Treasuries ended mixed, with the yield curve steepening due to strong demand for the 2-year note auction. 
  Upcoming Eurozone and U.S. PMI data will be closely watched for signs of economic growth and inflation, potentially influencing future ECB policies.
• Economists expect the advance U.S. Q2 GDP data to show an annualized growth rate of 1.9%, up from 1.4% in the first quarter. The upcoming U.S. PCE data may confirm expectations for a Federal Reserve rate cut in September.
• General Motors reported strong earnings but faced a significant loss in the Chinese market, causing its stock to fall. LVMH's Q2 revenue fell short of expectations, with a net profit for H1 down by 14%. Tesla reported Q2 sales that beat estimates but expects lower vehicle volume growth in 2024, focusing on cost reduction. Alphabet reported Q2 sales and EPS that exceeded analysts' estimates, showing strong performance. Visa announced a strong Q3 net profit, with adjusted EPS in line with expectations. Deutsche Bank reported its first quarterly loss in four years due to a trading slowdown and litigation charges.
• The yen's strength amid BOJ rate hike speculation could lead to further appreciation against major currencies, impacting export competitiveness. The dollar's performance is mixed, with potential weakness against the yen but strength against other major currencies due to economic data and Fed rate cut expectations.
• In summary, the US dollar is likely to remain volatile as it responds to a mix of economic data and political events. Investors and traders will need to stay vigilant, closely monitoring PMI releases, employment reports, inflation data, and key political developments. Understanding these factors will be crucial for navigating the uncertainties and capitalizing on opportunities in the forex market. As always, a well-informed and flexible approach will be essential in managing the risks associated with dollar volatility.

Vývoj neuronové sítě 2. část

24. 7. 2024 - admin admin

Ve druhém kvartálu 2024 pokračuje trénování neuronové sítě. Daří se postupně zvyšovat pravděpodobnost předpovědi. Neuronová síť byla také propojena s reálným obchodovacím serverem a učí se na reálných datech.

Daily analysis 07/23/2024

23. 7. 2024 - Josef Brynda

Latest news

• The Bank of Canada is expected to cut rates by 25bps to 4.50% at the July meeting, following its initial rate cut in June
• Major Companies Report Q2 Earnings: Tesla, Alphabet, IBM, Ford, GM
• Eurozone PMI Data to Indicate Economic Growth and Inflation Pressures
• Advance U.S. Q2 GDP Data Expected to Show 1.9% Growth
• U.S. Inflation Data Release Could Confirm September Fed Rate Cut
• Oil Prices Influenced by Geopolitical Tensions and U.S. Economic Data
• European Banks Release Earnings Amid ECB Rate Cut Speculations
• US Stocks rebounded Monday following Biden’s decision to exit the election race.
• Yen gains across the board on BOJ rate hike expectations.
• Gold, oil, and copper prices slide amid political uncertainty and weak demand signals
• Treasury yields hit weekly highs amid market reactions to Biden withdrawal.
• Eurozone Consumer Confidence, US Treasury sells $69 billion 2-year notes, ECB’s Lane speaks.

News summary

• If the BoC delivers a rate cut accompanied by a balanced statement, the CAD may experience limited decline. The market is also pricing in a September Fed rate cut which could put the US dollar on the backfoot. However, a dovish statement with clear indications of further rate cuts could lead to a more pronounced decline in the CAD.
• US Politics Could Strengthen USD: The increasing probability of a Trump 2.0 presidency and aggressive fiscal policies may drive demand for the US dollar, potentially pressuring CAD. However, markets are unwinding the Trump Trade to some extent with President Biden stepping away from the race
• Policy Divergence to the Fed: The BoC’s policy rate is already 75bps below the Fed funds rate, and another cut would widen this gap to 100bps, the largest since 2006. This could make the CAD vulnerable, though expectations of Federal Reserve easing in September may alleviate some of this concern.
• While there may be reasons for the BOC to cut rates again, the statement could turn slightly less dovish and more balanced to reflect the momentum in June core inflation and continued wage pressures. This could mean that a data-dependent approach is emphasized and the central bank could remain away from committing to further rate cuts.
• The U.S. GDP data will impact the dollar, with stronger-than-expected growth likely to boost the currency by indicating a healthy economy. Weaker data could lead to a decline in the dollar as it might suggest economic slowdown and potential for more dovish Fed policies.
• The Canadian Dollar (CAD) may weaken against major currencies like the USD, EUR, and JPY due to the lower interest rates, making Canadian assets less attractive to foreign investors.
• Advance U.S. Q2 GDP data is expected to show a 1.9% growth rate. This figure will be crucial for assessing the overall health of the U.S. economy. A higher-than-expected GDP growth rate could strengthen the USD, while a lower-than-expected rate may weaken it.
• Prices for gold, oil, and copper have slid amid political uncertainty and weak demand signals. These commodities are often seen as indicators of economic health. A decline in commodity prices may weaken commodity-linked currencies like the AUD, CAD, and NZD.

Daily analysis 07/22/2024

22. 7. 2024 - Josef Brynda

Latest news

• Semiconductor Sell-off Drags Nasdaq 100 Down 1%
• USD Softer as Biden Withdraws from US Presidential Race
• Gold and Oil Prices in Focus Amid Inflation and Political Uncertainties
• Bond Yields Face Political Uncertainty and Key Economic Data
• Crucial Week Ahead: US Inflation, GDP Data, Key Earnings Reports, and Eurozone PMI
• Biden Ends Reelection Campaign, Backs Harris as Nominee
• Leading Democratic Donors Support Kamala Harris
• ECB in No Rush to Decide on Rate Cuts
• Xi Vows to Rewire China’s Finances, Help Indebted Region
• Treasuries Yields Near Highest Levels Amid Global IT Outage
• Commodities Watch Political Uncertainties and US PCE Data
• Risk-on Currencies Underperform Amid Election Uncertainty
• Nvidia preparing version of new flagship AI chip for Chinese market, sources say
• Australian Dollar Falls to 3-Week Low against USD
• China surprised markets when it cut its benchmark interest rates on Monday
• Another Cut from BoC Will Bring Benchmark Interest Rate to 4.5%

News summary

• President Biden’s withdrawal from the presidential race has led to a softer USD. This political shift introduces uncertainty in the US political landscape, potentially weakening the dollar further as markets adjust to the new dynamics. Safe-haven currencies like the CHF and JPY might see increased demand, while risk-on currencies such as AUD and NZD could face pressure
• The semiconductor sector experienced a significant sell-off, leading to a 1% drop in the Nasdaq 100. This sector's performance is crucial as it often indicates broader technology market trends. The sell-off could lead to increased volatility in tech-heavy indices, potentially impacting investor sentiment and risk appetite..
• Gold and oil prices are under scrutiny due to ongoing inflation concerns and political uncertainties. Gold, a traditional safe-haven asset, may see increased demand if inflation persists or geopolitical tensions rise. Conversely, oil prices might fluctuate based on economic data and geopolitical developments, influencing commodity-linked currencies like CAD
• Bond yields are currently influenced by political uncertainties and upcoming economic data. The potential for a Federal Reserve rate cut, indicated by upcoming US inflation data, could drive bond yields lower. However, if economic data suggests robust growth, yields might rise, impacting interest rate-sensitive currencies like USD and EUR.
• Will China’s interest rate cuts succeed in kick-starting the sputtering economy and boosting demand? If so, it would be good news for the Australian economy, which is highly dependent on exports to China
• Overall the USD is expected to remain volatile due to political uncertainties following President Biden's withdrawal from the presidential race and the endorsement of Kamala Harris. This uncertainty may lead to a weaker USD as markets adjust, which may benefit currencies considered safe haven such as CHF and JPY. EUR could see some stability if Eurozone PMI data and the ECB's cautious stance on rates provide positive economic signals.

Daily analysis 07/18/2024

18. 7. 2024 - Josef Brynda

Latest news

• Europe's central bank hits pause on rate cuts as inflation takes its sweet time to come down to 2%
• New record high in Dow Jones, Nasdaq had worst day since December 2022. Nikkei closed Thursday down 2%
• Australian Dollar Strengthens Following Surprising Upside in Employment Data
• Gold retreats from record high amid Fed rate cut reconsideration; oil rebounds on US crude stockpile decline
• Strong 20-year U.S. Treasury auction leads yields lower with 10-year yields breaking their support 
• ECB monetary policy meeting and UK jobs data in focus
• Global chip stocks from Nvidia to ASML fall on geopolitics
• Fed Governor Waller Hints at Potential Rate Cuts Amid Economic Data Review
• Oil Prices Bounce Back After Government Report Shows Decline in US Crude Stockpiles
• Japanese Yen Strengthens Sharply on Expectations of Fed Rate Cuts in September
• Analysts expect continued strengthening of British pound after positive economic data
• Fed's Goolsbee and Logan to speak today, investors look for rate hints
• European shares opened higher on Thursday led by energy stocks, while investors also awaited the European Central Bank's interest rate decision, due later in the day.

News summary

• The European Central Bank (ECB) has decided to pause interest rate cuts as inflation in the Eurozone has not yet fallen to the target level of 2%. This decision could significantly impact the forex market, particularly the euro, which could remain stable or even strengthen if investors perceive this move as a sign of confidence in the Eurozone's economic recovery. On the other hand, European stock markets opened slightly higher on Thursday, with investors awaiting the ECB's rate decision, indicating that markets expect a positive development.
• The Australian dollar strengthened following surprisingly positive employment data. A stronger labor market can signal a healthier economy, potentially leading to expectations of interest rate hikes by the Reserve Bank of Australia. This could further strengthen the Australian dollar as investors seek higher returns in Australian assets.
• Gold pulled back from record highs as the Federal Reserve considers reassessing planned interest rate cuts. The drop in gold prices may be due to expectations of higher interest rates, reducing gold's appeal as a safe haven. Conversely, oil prices rebounded after a report of declining U.S. crude inventories, which may support commodity currencies such as the Canadian dollar and the Norwegian krone.
• A strong 20-year U.S. Treasury auction led to lower yields, with 10-year yields breaking their support level. Lower yields could weaken the U.S. dollar as investors seek higher returns elsewhere. The Japanese yen significantly strengthened on expectations that the Fed will cut interest rates in September, potentially further weakening the U.S. dollar against the yen.
• Analysts anticipate continued strengthening of the British pound following positive economic data. A stronger pound may result from expectations that the Bank of England will raise interest rates to combat inflation. Investors will also be watching speeches from Fed members Governor Waller, Goolsbee, and Logan, which may provide further clues on the future direction of monetary policy.
• Overall, financial markets are moving due to various economic and geopolitical factors impacting currencies, stocks, and commodities. Investors should closely monitor developments in these markets to better anticipate future movements and adjust their investment strategies accordingly.

5 Things You Need to Know to Start Your Day: Americas

16. 7. 2024 - Josef Brynda

Daily analysis 07/16/2024

16. 7. 2024 - Josef Brynda

Latest news

• The true bull market may finally 'wake up' as investors eye rate cuts
• The prospect of Trump becoming the next U.S. president boosts the stock markets
• US dollar gains continue, and yen weakness is making a comeback
• Gold Nears Record High Amid Fed Rate Cut Speculation; Oil Declines on Weak Demand Signals.
• Bond Markets Navigate Dual Impact of "Trump Trade" and Imminent Interest Rate Cuts.
• Bitcoin and Ethereum gained 10%
• S&P and Nasdaq rose on the back of Fed Chair Powell's optimistic remarks on US inflation
• The 10-year Treasury yield declines, remaining a couple basis points off its support level at 4.17%
• The dollar strengthens, the yen weakens, and the Australian and New Zealand dollar retreat
• Fed Chair Powell remained non-committal to a September rate cut
• The New Zealand dollar has been in a downtrend since the last RBNZ meeting that opened the door to a rate cut, and the Q2 CPI is out overnight.
• Bank of Canada’s quarterly survey highlighted growing pessimism and Canada’s CPI is due today, which will be key for whether the central bank cuts rates at the July meeting or not.
• Focus will also be on the US retail sales today.
• Concurrently, the prospect of a Trump victory, with anticipated policies such as tax cuts, higher tariffs, and deregulation, is expected to boost economic activity and potentially spur inflation, thereby driving long-term yields higher

News summary

• Expectations of an interest rate cut and the possibility of Donald Trump becoming the next US president are bringing optimism to the stock market. The S&P 500 and the Nasdaq rose thanks to Fed Chairman Powell's upbeat comments on US inflation. This optimism is further supported by Trump's expected policies such as tax cuts, higher tariffs and deregulation, which could boost economic activity and potentially boost inflation. This could lead to a rise in long-term yields.
• The strong dollar continues to strengthen on increased speculation on the Trump administration and expected policy changes. Conversely, the Japanese yen is weakening due to the large interest rate differential between Japan and other countries, causing interest in monetary intervention. The Australian and New Zealand dollars are also weakening, with the New Zealand dollar in a downtrend since the last RBNZ meeting, which opened the door to a possible rate cut.
• The gold price is near record highs on expectations that the Fed will cut rates. Oil, on the other hand, is falling due to weak demand. This trend may continue if speculation of a rate cut is confirmed, which could further support the gold price while keeping pressure on the oil price.
• The 10-year US Treasury yield is falling on expectations of a rate cut. If there is a further drop below 4.17%, yields could fall further to 3.78%. Conversely, if speculation of a Trump victory is confirmed, long-term yields could rise due to expected inflation.
• Today's economic reports suggest that investors should be cautious and closely monitor interest rate developments and political events that can significantly impact the markets. A strong dollar and expectations of rate cuts may present opportunities in the forex market, while stock markets could benefit from optimism regarding Trump's administration and potential Fed rate cuts.