Headlines
- How have interest rate expectations changed after this week’s events?
- BOJ governor Ueda says to expect to keep raising interest rates in response to economic, financial conditions
- BOJ governor Ueda says will conduct monetary policy in a manner so as to not fall behind the curve
- BOJ leaves rates unchanged as expected. Vote was 8-1
- ECB’s Kocher: Decisions to be based on incoming data to bring inflation back to the 2% target
- Euro area inflation nudges up in July, keeps the pressure on the ECB
- French inflation accelerates in July, reaffirming the broader trend in the region
- Italy July preliminary CPI +2.8% vs +2.8% y/y expected
- German unemployment rises by slightly more than anticipated in July
- South Korea’s KOSPI extends rebound in closing stages of the week, now up 17% today
Market Snapshot
- USD and AUD lead, CHF lags on the day
- WTI crude up 0.7% to $84.20
- European indices mostly higher; S&P 500 futures up 0.5%
- US 10-year yields up 1.2 bps to 4.675%
- Gold down 1.1% to $4,057
- Bitcoin down 1.3% to $63,887
Market Wrap
As markets count down to the end of the month, volatile swings are continuing to mark the close of the week.
The rebound in tech shares continues after South Korea’s benchmark KOSPI index posted near 18% gains on the day, setting a more positive backdrop for broader markets. European stocks are pushing modestly higher with the DAX up 0.7% and the CAC 40 up 0.9%, while US futures are also posting solid gains. S&P 500 futures are up 0.5% with Nasdaq futures up 1.3%. The absence of any hyperscaler concerns this week is also helping to bolster sentiment.
USD/JPY: Suspected Second Intervention
Markets got another taste of Japanese yen volatility during the session, with a suspected second round of intervention hitting USD/JPY. The pair had recovered well from yesterday’s drop, settling back above 160.00, before being pushed sharply down to 158.55 in short order. A gradual recovery followed, with the pair trading back up 0.3% to 160.05.
The dollar is also seeing a modest broader bounce, with EUR/USD down 0.3% to 1.1495 and USD/CHF up 0.5% to 0.8095 on the day.
Eurozone Inflation Ticks Higher
Euro area inflation data for July came in a touch hotter than expected, adding to pressure on the ECB and reinforcing expectations for another rate hike at the September meeting.
Elsewhere, oil prices are edging higher with WTI crude up 0.7% to $84.20, and 10-year Treasury yields are up nearly 2 bps to 4.68%. Gold is down 1.1% to $4,057 as the back-and-forth in precious metals continues heading into the weekend.
