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General Market Analysis 11/07/2024

US Stocks Power Higher Ahead of Data – Nasdaq up 1.2%

US Stock indices powered higher in trading yesterday to set all-time record closes as tech companies and the ‘Magnificent 7’ rose again. The Nasdaq gained 1.18% on the day closely followed by the S&P which added 1.02% and the Dow which finished up 1.09% to the good. Other markets were more subdued ahead of tonight’s key inflation numbers in the states, US treasury yields edged lower, the 2-year losing just 0.7 basis points to trade to 4.630% and the 10-year dropping 1.6 basis points to 4.284%. Currencies remained in familiar ranges, although the Kiwi took a hit after a more dovish then expected RBNZ meeting and UsdJpy remains close to record highs. Oil prices recovered from recent dips, Brent up 0.5% to $85.08 and WTI rose 0.85% to $ 82.10 while Gold ground up 0.2% on the day to close at $2,371 an ounce.

Yen Traders Hold their Breath Ahead of US Inflation Data

The furore surrounding potential intervention by the Bank of Japan has died down over the last week or so of trading a threatened action by Japanese authorities has failed to take place. However, many traders are keeping a very close eye on moves in the Yen over the next few sessions after it bottomed out just above recent lows in trading overnight. UsdJpy hit a high of 161.82 last night just below the July 2nd 161.99 summit and traders are concerned that a run above this level in the next few sessions could prompt the Ministry of Finance to act. The lively catalyst for a move today would be a higher-than-expected print for the US CPI data but any other round of dollar buying could also see those levels challenged again. Most traders feel that we are likely to see quiet ranges ahead of the New York session but are preparing for a sharp increase in volatility once the CPI numbers drop.

US CPI Data in Focus Today

Asian markets are set to open on the front foot today after a stellar day on Wall Street although some traders are expecting a more subdued day ahead as they look to the crucial release of the latest CPI numbers in the US later in the trading sessions. There is very little on the calendar in the APAC day to move the dial, although Yen traders do remain on intervention watch at current levels. The UK economy will come into focus early in the London session with the release of the GDP numbers, expectation is for a 0.2% month-on-month increase. But the real focus for the day is on the key CPI numbers due out early in the New York session, the headline number is expected to show a 0.1% month-on-month increase with the Core data coming in +0.2%. The year-on-year data is expected to show a 0.2% decrease coming in at 3.1% and anything significantly off expectations will see some sharp moves in the market. Unemployment claims are due out at the same time but expect the inflation numbers to dominate sentiment.

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