Markets had a risk-on sentiment early Monday morning as investors digest Fed rate hike sentiments following Friday’s positive US Jobs data. Investors are pricing in a 75bps rate hike in September as Fed doubles down on the inflation fight. Investors will be paying close attention to Wednesday’s US CPI data and Friday’s UK GDP data. Mergers and Acquisitions also lifted European stocks on Monday.
AUDUSD rallied by +0.61% recovering Friday’s losses due to the US bumper Jobs data. The NFP reading rose to 528K against 250K surveyed doubling the odds of a 75bps rate hike in September boosting the Dollar. However, Hong Kong cutting inbound Quarantine to 3-days lifted the risk-sensitive AUD. The pair bounced off near-term support at the 0.69000 psychological level and upside gains are capped by the 0.7000 level. Investors shift their focus to Australia’s Consumer sentiment data early Tuesday morning and Wednesday US Inflation print.
CHFJPY soared by +0.47% on Monday on shrinking Japanese Current Account data. The Current Account (June) data dropped to -0.132T from 0.128T although being better than -0.704T surveyed. The pair extended gains for the 2nd day straight from the 139.00 support and bulls are capped by the 141.100 level, a previous support-turned-resistance. However, a break above that level could reinforce bullish interests toward the 143.00 resistance.
GBPNZD plunged by -0.41% in the European session as UK Q2 GDP is seen shrinking by 0.2%. Friday’s UK housing data missed expectations dropping to -0.1% from a 1.2% forecast weighing down pound strength in the near term. The Chinese Export data rose to 18% in July boosting the New Zealand dollar as a major beneficiary of Chinese economic performance. The pair tanked from the 1.93500 level and the next critical level is at 1.91500, a 17-week low.
European stocks rose as investors focus on earnings resilience. FTSE100 rallied by +0.29% and bulls are capped by the 7500 psychological level. A break above that level could trigger buying interest towards the 7600 level. If bulls fail to maintain gains above the 7400 level bears may target the 7350, an 8-day low.
CAC40 rose by +0.63% with bullish targets at the 6600 level. Critical levels to watch out for are the 6550 resistance and 6450 support level. DAX gained +0.59% trading slightly above the 13650 level with upside gains capped by the 13750 and 14000 psychological levels.
US stock futures were higher as US treasury yields dropped ahead of US inflation data on Wednesday. S&P500 futures rallied by +0.59% after bouncing off a 4100 support and bulls target the 4200 level in the near term. Nasdaq100 futures recovered Friday’s losses by +0.75% from 13100 and bulls face near-term barriers at 13400 and 13600 levels.
DJIA index futures soared by +0.55% despite bulls capped between the 33000 resistance and 32500 support. A break above the 33000 level could trigger buying pressure towards the 33500 level, a 4-month high.
US 10-year yields plunged by -1.48% from a 2.85% high and bears may target the 2.70% support level in the near term.
Bitcoin surged by +3.91% towards the 24800 level and a break above that level could lift the crypto bulls towards the 28000 level, a previous support-turned-resistance. The crypto buyers continue to defend the 22500 as immediate support.