North American News
US Major Indices Relinquish Gains, Concluding Near Day’s Lows
- US Yields Dampen the Celebration, Casting a Shadow on Market Sentiment
US major indices gave up most of their gains and closed near the lows for the day. There was a spike at the open on the back of the CPI data, but rates started to move higher with the 2-year now up 4.6 basis points, the 10-year up 9.9 basis points, and the 30-year up 8.5 basis points after a sloppy auction that had a 1.4 basis point tail and average demand.
The final numbers are showing:
- Dow industrial average up 52.79 points or 0.15% at 35176.14.At the highs the index was up 455.21 points.
- S&P index up 1.14 points or 0.03% at 4468.84.At the highs the index is up 59.67 points
- NASDAQ index up 15.96 points or 0.12% at 13737.98. At the highs the index was up 225.15 points
US sells 30-year bonds at 4.189% vs 4.175% WI
- Results of the $23 billion sale of 30-year bonds
- Highest yield of the cycle (beats Nov 2022 at 4.08%)
- Bid to cover at 2.42 vs 2.43 prior
The 1.4 basis point tail is not a good sign for the fixed income market. I thought the 4% handle might pull in bids but the history of tails at new issues was too much to overcome.
“The post-CPI kneejerk rally in Treasuries was largely faded with rates little changed on the day in the run-up to 1pm. Since the result, we’ve seen a modest selloff in the long end,” writes BMO.
US June CPI +0.2% m/m versus +0.2% m/m expected
- US July 2023 consumer price index data
- Prior m/m +0.2%
- CPI m/m +0.2% versus +0.2% expected (+0.17% unrounded)
- CPI y/y 3.2% versus 3.3% expected
- Prior y/y 3.0%
Core measures:
- Core CPI m/m +0.2% versus +0.2% expected. Last month 0.2%
- Unrounded core at +0.16%
- Core CPI y/y 4.7% versus 4.8% expected. Last month was 4.8%
- Shelter % versus 0.4% last month. Year on year % versus 7.8% last month
- Real weekly earnings month to month % versus +0.5% last month
- Services less rent and shelter +0.2% m/m vs +0.2% prior
US weekly initial jobless claims 248K vs 230K expected
- Initial jobless claims for the week ending August 5
- Prior was 227K
- Four-week moving average vs 228.25K prior
- Continuing claims vs 1.710m expected
- Prior continuing claims 1.700m
US July federal budget deficit $221.0 billion vs -109.3 billion expected
- Last July’s deficit was $228.0 billion
- Last July was $228.0 billion
- June deficit was $240 billion
The US government recorded a $221 billion budget deficit in July. The Treasury Department informed that total receipts in July totalled $276 billion and outlays $496 billion.It compares to a deficit of $211 billion last year.
US Cleveland Fed July CPI +0.2% vs +0.4% prior
- The nowcast from the Cleveland Fed on CPI
- August Core PCE nowcast +0.35%
Redfin reports US rents up +0.3% y/y in July
- Rents near a record but moving up slowly
Redfin today reports that US asking rents rose 0.3% y/y in July. That compares to +13.6% in the year ending July 2022.
“While rents are flattening out, it’s too early to say whether rent growth has bottomed,” said Redfin Deputy Chief Economist Taylor Marr in the release. “A strong job market, cooling inflation and increasing consumer spending—which have decreased the likelihood of a recession—point to resilient renter demand. But there are still a lot of newly built apartments that have yet to hit the market, meaning rents may still have room to fall as landlords grapple with rising vacancies.”
Fed’s Daly: CPI data was as expected, it’s good news for families and businesses
- Comments from the Fed’s Daly
- We are committed to getting core inflation down
- There’s a lot more info coming in before
- I see slowing in the economy but we’re not there yet
- It’s still hard to find workers, the economy isn’t yet in balance
- Whether we need to hike rates or hold them steady for a longer period, it’s premature to project, there is a lot of data left
- We’ve been watching the data and asking ‘does anything we’re seeing change the outlook’
- Today’s inflation data is a ‘good data point’
- If core services ex housing doesn’t come down and stalls, that’s something I’m watching
- I’m going to hold myself to data dependence
- I would need to really gain confidence that the path of inflation is completely downward. That’s not food or energy prices, it’s goods price inflation, which is coming down.
- If you look at new leases and new rents, that’s pulling things down
- We’re going to be watching supercore carefully, that’s a big component of spending and it hasn’t made much progress so far, we need to see it come back to pre-pandemic levels
- If demand slips below supply, that would be a good indication we could cut rates
- We are a long way from a conversation about rate cuts
Fed’s Bostic: I don’t know how persistent pandemic labor market changes will be
- Comments from the Atlanta Fed President
- Fed has been working hard to to reduce too-high inflation
Commodities
Gold falls back as US inflation increases at a steady pace
- Gold price eases gains as inflation expanded at a stable pace in July.
- United States inflation remains almost stable amid resilience in consumer spending.
- US credit card spending remained the highest ever in Q2, and delinquencies rise.
WTI corrects overbought conditions, outlook remains bright
- WTI retreated below the $83.00 area, still trading in highs since mid-April correcting overbought conditions.
- Soft inflation figures from the US and weaker USD limit losses. Eyes on the Fed speaker later in the session
- WTI’s outlook remains positive amid tighter global supplies.
OPEC monthly oil report: Leaves world oil demand forecasts for 2023 and 2024 unchanged
- Highlights of the OPEC monthly oil report
- 2023 growth seen at 2.44m bpd
- 2024 growth seen at 2.25m bpd
- OPEC output fell 836k bpd to 27.31m bpd in July after Saudi voluntary cut
- Sees prospects for healthy oil fundamentals in H2
- OPEC’s data suggests 2 million barrel a day supply deficit
EU News
Italy July final CPI +5.9% vs +6.0% y/y prelim
- Latest data released by Istat – 10 August 2023
- Prior +6.4%
- HICP +6.3% vs +6.4% y/y prelim
- Prior +6.7%
UK RICS housing survey for July -53 versus -50 estimate
- UK RICS housing survey for July 2023
- Prior month -46 revised 2-48
- RICs housing survey for July -53 versus -50 estimate. This is the lowest since April 2009
- Agreed sales balance -44 versus -36 last month. Lowest since April 2020
- Near-term rental price balance +63 versus +55 last month. Highest since records began in 1999
Demand from potential buyers also decreased, as reported by RICS.
RICS Chief Economist, Simon Rubinsohn, highlighted the economic uncertainty, rising interest rates, and a stricter credit environment as challenges for potential buyers.
This month, Nationwide reported a 3.8% annual decrease in average house prices in July, the largest drop since 2009 , while Halifax reported a 2.4% year-on-year decline. However, despite the declines, house prices remain over 20% higher than pre-pandemic levels.
Renting conditions have also become challenging due to landlords selling properties because of increased mortgage costs and stricter regulations. RICS reported the widest rent increases since their records began in 1999.
Other News
China’s commerce ministry: Gravely concerned about US issuing order on foreign investment
- China responds to Biden’s executive order
China’s Commerce Ministry on US issuing order on foreign investment reviews:
- China is gravely concerned about this and reserves the right to take measures to disrupt the security of the global industrial chain.
- Hopes that the United States will respect laws of market economy and the principle of fair competition.
Japan foreign bond investment 438.8 billion versus 211.7 billion last week
- Japan foreign bond and stock investments
- Japan foreign bond investment for 3.8 billion versus 211.7 billion last week
- Japan foreign investment Japanese stocks -59.4 billion versus 195.75 billion last week
Japan PPI for July 0.1% versus 0.2% expected
- Japan PPI data for July 2023
The Japan PPI data for July – a.k.a. goods price index, or the price firms charge each other for products – is showing:
- Prior month -0.2%
- PPI MoM 0.1% versus 0.2% expected.
- PPI YoY 3.6% versus 3.5% expected. Prior month 4.1% This is the lowest since April 2021.
Cryptocurrency News
Coinbase Ventures’ foray into Ethereum liquid staking network Rocket Pool fuels 15% rally for RPL
- Coinbase Ventures has invested in Rocket Pool, purchasing RPL tokens from the ecosystem’s team.
- Rocket Pool is a leading liquid staking network on Ethereum, allowing users to stake ETH while retaining liquidity.
- RPL price is up 15% in two days, which is no mean feat considering the current dormancy in the market.
- The move has seen multiple short positions liquidated as their stop losses were triggered, initiating fresh buys.
Coinbase Ventures announced a strategic investment into Rocket Pool, one of the leading liquid staking networks on the Ethereum (ETH) blockchain. The move is part of the exchange’s commitment to widening its horizons and solidifying its industry position.
Coinbase new venture fuels rally in RPL
Coinbase Ventures, the corporate venture capital arm of the US cryptocurrency exchange, Coinbase, has acquired RPL tokens from the Rocket Pool team.
The firm’s venture into one of the leading liquidation networks is a show of confidence in the longevity of Rocket Pool as both parties reiterate the essence of decentralization. With this move, Coinbase will be an active participant in the Rocket Pool Oracle DAO, with clear intentions to leverage its corporate Ether holdings for node operation.
Ripple XRP update: SEC to appeal XRP ruling, non-security status of altcoin likely at risk
- Judge Analisa Torres revealed that the court seeks to schedule a jury trial for the SEC vs. Ripple case in Q2 2024.
- SEC and Ripple can submit blackout dates for trial until August 23.
- Experts believe so long as the SEC does not file an interlocutory appeal, XRP is not a security till 2025 at least.
US SEC is intent on appealing the XRP lawsuit outcome.In the latest development in the SEC vs. Ripple lawsuit, Judge Torres announced pretrial schedule. XRP holder community speculates the loss of XRP’s non-security status.
SEC vs. Ripple lawsuit update
The SEC vs. Ripple lawsuit has new updates from Judge Analisa Torres. The ruling judge in the lawsuit says that the court will seek to schedule a jury trial for the case in Q2 2024. The Judge has ordered both parties to submit blackout dates for trial by Wednesday, August 23.
Follow our recently launched pages. Join our community and never miss a beat in the dynamic world of trading.
https://www.facebook.com/BilalsTechLtd
https://www.linkedin.com/company/bilals-tech/
