China/Hong Kong equity indices were steady amid hopes of a broader stimulus after data showed manufacturing activity in China rose slightly while non-manufacturing activity softened in June. China NBS Manufacturing PMI advanced to 49.0 in June, in line with expectations, compared with 48.8 last month. China’s NBS Non-Manufacturing PMI slipped to 53.2 in June from...Read More

US DATA, HAWKISH ECB POLICYMAKERS, ECB FORUM EUR/USD enjoyed a decent rally yesterday despite the return of US Dollar strength in the US session following positive US data. However, this was largely offset by ongoing hawkish commentary from European Central Bank (ECB) policymakers at the ECB Forum in Sentra, Portugal. Currency Strength Chart: Strongest –...Read More

Wall Street added to recent losses overnight (DJIA -0.04%; S&P 500 -0.45%; Nasdaq -1.16%), as the moderation from previous overbought technical conditions and extreme bullish sentiments continues. Amid the relatively quiet US economic calendar to start the week, a series of downgrades in the technology space such as Alphabet and Tesla seem to take on...Read More

The Japanese yen gained a bit after Japan’s top diplomat said authorities will respond to excessive moves in the currency market, and after a Bank of Japan board governor was quoted as saying the central bank should discuss revising its yield curve control policy at an early stage. When asked about the chance of currency...Read More

Gold’s fall below key support on Thursday confirms that the multi-week upward pressure has faded as hawkish central bank rhetoric and improving broader risk sentiment diminish the safe-haven appeal of the yellow metal. After holding for weeks above the support, XAU/USD has fallen below 1930, including the end-May low, the 89-day moving average, and the...Read More

Gold has softened a bit after hawkish remarks from US Federal Reserve Chair Jerome Powell and is beginning to look vulnerable to a break below key support. Gold has been largely holding above key support – the previous update highlighted that gold may not be ripe for a break below support – see “Gold Price...Read More

XAU/USD FUNDAMENTAL FORECAST Gold prices have been relatively subdued of recent as markets continue to mull over the recent Fed interest rate pause as well as incoming economic data with particular focus on inflation and labor. The day ahead should stoke some volatility in gold markets with Fed Chair Jerome Powell scheduled to testify before...Read More

AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP The Australian dollar is on offer this morning against the US dollar even though the greenback remains relatively flat as measured by the DXY index. The selloff stemmed initially from concerns around the Chinese economy as the Pooch cut both the 1-year and 5-year loan prime rates by only 10bps respectively...Read More

The euro could attempt to recoup some of the recent losses against some of its peers, thanks to the European Central Bank’s (ECB) hawkish hike, oversold conditions, and a spate of underwhelming Euro area macro data. However, still-elevated speculative long EUR positioning could limit the gains. EUR has rebounded against the US dollar, but has...Read More

The Japanese yen fell slightly against the US dollar after the Bank of Japan’s (BOJ) maintained ultra-loose policy settings, especially the closely watched yield curve control (YCC) policy, in a bid to support the nascent economic recovery and sustainably achieve its inflation goal. The BOJ was widely expected to maintain its ultra-easy monetary policy at...Read More