North American News
Late Selling Sparks Market Whirlwind: US Equities End the Day on a Mixed Note
- Nasdaq Climbs, S&P 500 Dips: A Tale of Two Market Directions
Last-Minute Retreat Pushes US Equities into Slight Losses, Capping a Mixed Month for Markets
The closing moments of the trading session witnessed a sudden reversal as US equities relinquished earlier gains to end the day with narrow losses. This downward shift marks the conclusion of a challenging month for American exchanges, albeit with a silver lining. While the month was initially marred by significant declines around the midpoint of August, the final outcome was relatively less severe.
A notable factor contributing to the day’s dynamics was the falling yields observed throughout the week. This unexpected decline triggered a notable turnaround in the technology sector. The Nasdaq, home to many tech giants, managed to climb amid the broader market’s struggle, showcasing the sector’s resilience to the yield-induced headwinds. Conversely, the S&P 500 faced a more challenging trajectory, reflecting the broader market’s vulnerability to the shifting yield landscape.
As the month draws to a close, market participants remain cautiously optimistic, closely monitoring how the interplay between yields and sector performance will continue to influence market trends in the upcoming weeks.
As for today, the finish was largely static:
- S&P 500 -0.2%
- DJIA -0.5%
- Nasdaq Comp +0.1%
- Russell 2000 -0.1%
Atlanta Fed GDPNow 5.6% vs 5.9% prior
- Atlanta Fed GDP measure ticks lower
US July core PCE inflation +4.2% y/y vs +4.2% expected
- US July 2023 data from the US personal consumption expenditure report
- Prior was +4.1%
- PCE core +0.2% m/m vs +0.2% expected
- Prior MoM +0.2%
- Headline inflation PCE +3.3% y/y vs +3.3% expected (Prior +3.0%)
- Deflator +0.2% m/m vs +0.2% expected (prior was +0.2%)
Consumer spending and income for July:
- Personal income +0.2% vs +0.3% expected. Prior month +0.3%
- Personal spending +0.8% vs +0.7% expected. Prior month +0.5%
- Real personal spending +0.6% vs 0.4% prior
US initial jobless claims w.e. 26 August 228K vs 235K expected
- Latest data released by the Department of Labor – 31 August 2023
- Prior 230K; revised to 232K
- 4-week moving average initial jobless claims 237.50K
- Prior 236.75K; revised to 237.25K
- Continuing claims 1.725M vs 1.703M expected
- Prior 1.702M; revised to 1.697M
US August Challenger layoffs 75.15k vs 23.70k prior
- Latest data released by Challenger, Gray, and Christmas Inc – 31 August 2023
Job cuts are seen reaccelerating again after showing a first year-on-year decrease in July. And that further signals easing of labour market conditions with there being 557,057 job cuts already announced by US-based employers this year. That is a 210% increase from the 179,506 job cuts announced in the same period last year. And to put things into context, this is the 3rd highest year-to-date total since 2009.
US Justice Department is investigating the use of Tesla funds to build a house for Musk
US Federal prosecutors are investigating the use of Tesla TSLA funds to build a house of glass for Elon Musk.
- U.S. Attorney’s Office for the Southern District of New York is seeking further information about the secret project, known as “Project 42”
- The glass home is to be built in or near Austin, Texas.
Info comes via a Wall Street Journal report, the article cites unnamed “people familiar”.
Barclays says US stock market pullback in August was a buyers strike
Barclays on the losses for US stocks this month:
- says the August pullback was more due to ‘buyer’s strike’, a lack of buying by traders rather than reducing exposure to risk.
- “The August pull-back was more due to buyers’ strike than a broad de-risking”
- “Sentiment and technicals retreated from stretched July levels amid low summer volumes. Although active managers’ exposure is back down to average, market downside and erratic price action were more due to a lack of buyers than a broad de-risking”
- the pivot into cash, bonds and other defensives could suggest caution ahead
Fed’s Bostic: Monetary policy is appropriately restrictive
- Remarks by Atlanta Fed president, Raphael Bostic
- Inflation is still too high
- We should be cautious, patient, resolute
- Policy is restrictive enough to bring inflation to 2% in a reasonable timeframe
- I am not for easing policy any time soon
- Should inflation unexpectedly climb, I would support more tightening
Federal Reserve is quietly demanding that regional lenders shore up liquidity planning
The Federal Reserve has issued a batch of private warnings to lenders with assets of $100 billion to $250 billion.
This is part of increased efforts to tighten supervision, Bloomberg News reported. Bloomberg is gated, the news wire citing people familiar with the matter.
Among the banks given the warnings were Citizens Financial, Fifth Third Bancorp and M&T Bank Corp.
Notices touched on a wide range of issues including lenders’ capital and liquidity as well as technology and compliance.
The background to this is banks are dealing with the aftermath of the biggest crisis to hit the sector since 2008, which saw three mid-sized US lenders collapse earlier this year.
Canada June average weekly earnings +3.61% vs +3.61% prior
- Canadian wage data
- Prior was +3.61% (revised to 3.57%)
- Hours worked -0.6%
- Job vacancies -1.2% in June and -12.6% since January
Canada Q2 current account -$6.63 billion vs -$11.2 billion expected
- Latest data released by Statistics Canada – 31 August 2023
- Prior -$6.17 billion; revised to -$3.17 billion
The current account deficit widened in Q2 but less than anticipated at least. Of note, the trade in goods balance moved into a deficit position for the first time in two years, mostly as a result of lower exports of energy products and farm, fishing, and food products. Meanwhile, the trade in services deficit was seen narrowing.
BOC likely to hold at 5.00% in September meeting but will keep options open
- Despite a potential rate hike, the central bank maintains a balanced approach, keeping options open
RBC Capital Markets anticipates that the Bank of Canada (BoC) will maintain its key interest rate at 5.00% in its upcoming September policy meeting. Despite a hawkish tone in the July statement and Monetary Policy Report (MPR), Governor Macklem struck a more balanced note in the associated press conference. The upcoming Q2 GDP report represents a significant risk factor, while current market pricing only suggests a 25-30% chance of a rate hike.
Key Points:
- July’s Hawkish Tone: The BoC outlined reasons for a rate hike in its July statement and MPR, suggesting the possibility of further tightening.
- Balanced Views from Governor Macklem: During the press conference that followed the July meeting, Governor Macklem discussed both the risks of over-tightening and under-tightening, suggesting a more balanced policy approach.
- Upcoming Q2 GDP Report: This Friday’s release of the Q2 GDP data is a significant factor that could influence the BoC’s decision.
- Market Pricing: Current market pricing indicates only a 25-30% chance of a rate hike at the September meeting.
Commodities
Gold price holds recovery ahead of US NFP
- Gold price oscillates above $1,940.00 as investors await US NFP data.
- The US ADP Employment report suggests that the NFP report could show job creation is slowing.
- US ADP report also showed the slowest wage growth since October 2021.
Gold finds nominal selling pressure as the Fed’s preferred inflation tool turns out persistent in July. Earlier, the yellow metal was trading sideways after a rally inspired by soft labor demand due to the deteriorating economic outlook. The precious metal is expected to remain on the sidelines as investors are likely to make an informed decision after the release of NFP data on Friday.
Oil climbs for the sixth straight day as it settles at the highs
- WTI crude oil settles up $2 in late surge to finish at $83.64.
Russia’s Novak offered a cryptic hint about what’s coming to the oil market next today, saying that OPEC+ will decide on future policy next week. That’s not something that was on the schedule but leaves the market uncertain of what’s to come. Initially the reaction was to sell out but it later rebounded and we’ve settled at the highs of the day.
In the bigger picture, it’s abundantly clear that the market is undersupplied and is drawing on inventories. Moreover, US commercial inventories are headed for a five-year low next month.
As for today, the bulls pounded the close, leading to a $2.00 gain to $83.64, which is the highest since August 9.
EIA weekly natural gas inventories +32 bcf vs +25 bcf expected
- Weekly EIA natural gas inventories
- Prior was +18 bcf
NatGas Monthly:
- In June 2023, dry natural gas production increased year over year for the month for the 27th consecutive month. The preliminary level for dry natural gas production in June 2023 was 3,083 billion cubic feet (Bcf), or 102.8 billion cubic feet per day (Bcf/d). This level was 4.3% (4.2 Bcf/d) higher than June 2022 (98.5 Bcf/d) and the highest level for the month since 1973, when we began tracking dry natural gas production. Gross withdrawals also increased from June 2022:
- Gross withdrawals: 3,721 Bcf for the month, or a daily rate of 124.0 Bcf/d
- A 4.6% increase compared with June 2022 (118.6 Bcf/d)
- Highest daily rate of gross withdrawals for the month since 1980, the earliest year in this data set
- Estimated natural gas consumption in June 2023 was 2,359 Bcf, or 78.6 Bcf/d. This level was 1.8% higher than June 2022 (77.3 Bcf/d) and the highest for the month since 2001, the earliest year in this data set.
- The year-over-year average daily rate of consumption of dry natural gas in June 2023 increased in each of the four consuming sectors. Deliveries of natural gas by consuming sector in June 2023 were as follows:
- Residential deliveries:127 Bcf for the month, or a daily rate of 4.2 Bcf/d
- A 2.4% increase compared with June 2022 (4.1 Bcf/d)
- Commercial deliveries: 148 Bcf for the month, or a daily rate of 4.95 Bcf/d
- A 1.1% increase compared with June 2022 (4.89 Bcf/d)
- Highest commercial deliveries for the month since 1997
- Industrial deliveries: 649 Bcf for the month, or a daily rate of 21.62 Bcf/d
- A 0.1% increase compared with June 2022 (21.59 Bcf/d)
- Highest industrial deliveries for the month since 2018
- Electric power deliveries: 1,172 Bcf for the month, or a daily rate of 39.1 Bcf/d
- A 2.3% increase compared with June 2022 (38.2 Bcf/d)
- Highest electric power deliveries for the month since we began using the current methodology for electric power deliveries in 2001
- Net natural gas imports (imports minus exports) were -375 Bcf, or -12.5 Bcf/d, in June 2023, making the United States a net natural gas exporter. Daily net natural gas imports were the lowest for the month since we began tracking them in 1973. The United States exported 2.6 times more natural gas than it imported in June 2023. Liquefied natural gas (LNG) exports in June 2023 were 9.0% higher than the daily rate of LNG exported in June 2022; LNG exports were the highest for the month since we began tracking them in 1997. In June 2023, the United States exported 10.9 Bcf/d of LNG to 30 countries. Natural gas imports and exports increased year over year in June 2023:
- Total imports: 232 Bcf for the month, or a daily rate of 7.7 Bcf/d
- A 1.3% increase compared with June 2022 (7.6 Bcf/d)
- Highest natural gas imports for the month since 2017
- Total exports: 607 Bcf for the month, or 20.2 Bcf/d
- A 9.6% increase compared with June 2022 (18.5 Bcf/d)
- Highest natural gas exports for the month since we began tracking them in 1973
OPEC August output rose 220k bpd led by Iran – survey
- Iran’s output hit the highest since 2018
Reuters’ influential ‘secondary sources’ oil survey is out and highlights rising Iranian production.
The country isn’t subject to OPEC quotas because of sanctions declines.
The Biden administration which blocked the Keystone XL pipeline has instead turned a blind eye to Iranian sanctions and has recently loosened them on Venezuela as well. Those moves were done to lower oil prices.
In any case, Iran’s production is now up to 3.1 million barrels per day, rising 200b bpd and erasing nearly half of the ‘lollypop’ cut from Saudi Arabia. Other OPEC moves particularly Nigeria added a net 20k bpd.
Russia’s Novak says they will be announcing main parameters of OPEC+ deal next week
- OPEC announcement coming next week?
It’s not entirely clear what Novak is referring to here but he said that Russia agreed with OPEC+ of further actions. He might be referring to an extension of Russian cuts or a larger OPEC deal. There are some ticks lower in oil on these headlines but I think the market might have that backwards.
Saudi Arabia is expected to announce next week that its extending its crude oil output cut
Via the most recent Bloomberg survey of oil analysts, 20 of 25 expect that Saudi Arabia its current current 1 million-barrel oil output cutback for at least one more month.
- Bloomberg add that several delegates from the Organization of Petroleum Exporting Countries and its allies privately predicted the same outcome.
- “I don’t think they’re ready to ease up yet — there’s lots of macroeconomic uncertainty and especially China angst out there still,”
- “If they ease up too early, speculative shorts could flock back.”
EU News
European equity close: DAX diverges
- Closing changes in the main European bourses for the day
On the day:
- Stoxx 600 -0.1%
- German DAX +0.5%
- Francis CAC -0.4%
- UK’s FTSE 100 -0.4%
- Spain’s Ibex -0.3%
- Italy’s FTSE MIB -0.1%
Eurozone August preliminary CPI +5.3% vs +5.1% y/y expected
- Latest data released by Eurostat – 31 August 2023
- Prior +5.3%
- Core CPI +5.3% vs +5.3% y/y expected
- Prior +5.5%
Eurozone July unemployment rate 6.4% vs 6.4% expected
- Latest data released by Eurostat – 31 August 2023
- Prior 6.4%
Germany August unemployment change 18k vs 10k expected
- Latest data released by the Federal Employment Agency – 31 August 2023
- Prior -4k
- Unemployment rate 5.7% vs 5.7% expected
- Prior 5.6%
Germany July retail sales -0.8% vs +0.3% m/m expected
- Latest data released by Destatis – 31 August 2023
- Prior -0.8%
- Retail sales -2.2% vs -1.0% y/y expected
- Prior -1.6%
France August preliminary CPI +4.8% vs +4.6% y/y expected
- Latest data released by INSEE – 31 August 2023
- Prior +4.3%
- HICP +5.7% vs +5.4% y/y expected
- Prior +5.1%
France Q2 final GDP +0.5% vs +0.5% q/q prelim
- Latest data released by INSEE – 31 August 2023
No changes to the initial estimates and while the headline may look great, the devil is in the details:
- Domestic demand -0.1%
- Inventory changes -0.1%
- Net foreign trade +0.7%
UK car production rose for the sixth consecutive month in July
The Society of Motor Manufacturers and Traders (SMMT) in the UK said a total of 76,451 units rolled out of factory lines in the country in July, a 31.6% increase over the year earlier.
- car production rose for the sixth consecutive month
- total number of cars produced, however, remained 29.4% lower from the pre-pandemic levels seen in July 2019
- automakers continued torecover from global chip shortages, said the industry body
- “Six months of growth shows that British car production isrecovering and, with electrified models increasingly driving volumes, the future is more positive,” said SMMT Chief Executive Mike Hawes.
- Production of latest high-tech hybrid electric (HEV),plug-in hybrid (PHEV) and battery electric vehicles (BEVs) roseabout 74% to 30,180 units, representing almost two in every five cars manufactured in July.
ECB’s DeGuindos: Latest date points to deceleration in Q3 and probably Q4
- Comments from the ECB vice president
- Latest data from July and Aug point towards economic deceleration in Q3 and probably in Q4
- We need to keep working to get inflation back to the 2% target
- September decision is still up for debate
- Data in the next days is key to the ECB decision
BOE’s Pill: No room for complacency on inflation
- Remarks by BOE chief economist, Huw Pill
- We need to see the job through on inflation
- We need to ensure we do enough on policy
- But there is the possibility of doing too much in the fight against inflation
- Policy needs to be sufficiently restrictive for long enough
Lloyds Bank Business Barometer shows UK business optimism at an 18-month high
Lloyds Bank Business Barometer measure of confidence jumped by 10 points in August to 41%
- its highest since February 2022
- “The bounce in economic optimism this month is the stand-out point,” Hann-Ju Ho, senior economist at Lloyds Bank, said. “Our analysis shows that businesses felt relief thatinterest rates may be reaching their peak, alongside hopes thatmeasures to tackle inflation are having an impact.”
- firms’ hiring intentions were the strongest in 15 months
- share of businesses planning to increase staff wages was the highest since Lloyds began asking about pay in 2018, with 30% of firms predicting a 3% pay rise
- a net balance of 56% of firms intended to increase their prices
ECB’s Holzmann: August inflation data a conundrum for the ECB
- Remarks by ECB policymaker, Robert Holzmann
- Data shows that inflation is still persistent
- We are not yet at the highest level for rates
- Another one or two rate hikes is still possible
ECB’s Schnabel: We cannot predict where the peak rate is going to be
- Remarks by ECB executive board member, Isabel Schnabel
- Also cannot predict for how long rates will have to stay at restrictive levels
Other News
China ICYMI – A PBOC official says banks should step up lending to private companies
From Wednesday afternoon China time, comments from a People’s Bank of China official urging banks to step up lending to private companies.
- PBOC will ask financial institutions to set annual targets for services to private firms and vigorously expand loans to companies that are borrowing for the first time.
The official, Ma Jianyang, deputy head of the financial market department at the People’s Bank of China, was meeting with financial regulators, corporations and lenders.
China August Manufacturing PMI 49.7 (vs. expected 49.2)
- China’s official PMIs from its National Bureau of Statistics (NBS)
China August Manufacturing PMI 49.7, beating the estimate and still in contraction
- vs. expected 49.2, prior 49.3
- fifth consecutive month in contraction for factory activity, but edging towards an expansionary reading. Maybe in September?
Non-Manufacturing 51.0, missing its estimate and in expansion
- expected 51.2, prior 51.5
The combined PMI, the ‘Composite’ is 51.3
Statements from the National Bureau of Statistics (NBS):
- Improvements in manufacturing activity in China continued in August.
- New Order Index is up 0.7 from July to 50.2%, back to the expansion zone as stable production and market demand improved.
- Small business activity has improved.
- The large enterprise PMI rises to 50.8%, providing significant support to the overall manufacturing industry.
- The medium-sized enterprise PMI +0.6 pps to 49.6%, and the small enterprise PMI +0.3 pps to 47.7%
- The production and operation activity expectation index +0.5 pps to 55.6%, enterprise confidence has been strengthened
- The production and operation activity expectation index of the consumer goods industry has been above 55.0% since the beginning of the year.
China’s major state-owned banks reportedly seen selling dollars in onshore spot FX market
- The intervention continues by Beijing in trying to defend the yuan
It is being reported by Reuters that China’s major state-owned banks were seen swapping yuan for US dollars in the forward market and then selling those dollars in the spot market today. This has been an ongoing thing all through August trading and it isn’t too surprising to see the PBOC instruct domestic banks to step in again.
Chinese exporters look to intricate workaround to retain dollar earnings
- Chinese firms tap into the onshore forward market at a record pace in July
In trying to retain their dollar earnings as the yuan stumbles, Chinese exporters are resorting to using currency swaps to manage that. According to China’s FX regulator, domestic firms swapped a record $31.5 billion for yuan with banks in the onshore forward market in July.
This allows the exporters to place their dollars with the banks and get yuan instead, but through a forward/swap contract that will eventually reverse said flows and receive dollars again. It’s a neat little workaround and one that is quite commonplace I would say for larger firms and corporate clients of banks.
China’s local governments accelerating the pace of borrowing for infrastructure investment
Bloomberg report (gated) that China’s local governments are accelerating the pace of borrowing for infrastructure investment.
- This will be supportive of economic growth, and of course increasing China’s debt load, a move that could pressure financial markets.
- Provincial governments sold the most amount of special bonds in more than a year in August says the report.
Chinese developers face US$38 bn RMB & dollar bond payments due over the next 4 months
Dealogic data cited by media reports on the cascade of debt payments due in the near term.
A prolonged slowdown has hit housing prices amid collapsing sales and delays to the construction of new apartments. The government has stopped short of any bailouts, but its approach is being closely watched as more and more repayments come due.
PBOC says it’ll boost loans to private firms, encourage bond buying, and more
People’s Bank of China statement of support for the Chinese economy:
- Will continue to step up loans to private companies
- Will use stocks, bonds to deal with risks of private property developers in a prudent manner
- Will encourage and guide institutional investors to buy bonds of private firms
- Will support IPO and refinancing of private firms
Japan PM Kishida says will aim to raise average minimum wage to ¥1,500 by mid-2030s
- That will represent an increase of roughly 56%
It certainly is an ambitious goal and one that will at least help boost the wage dynamics in Japan, which have been rather depressed over the last two decades. For some context, in 2022, minimum wages in Japan averaged to around ¥961 per hour and that already represents an all-time high.
BOJ’s Nakamura: Monetary policy does not target FX
- Remarks by BOJ policymaker, Toyoaki Nakamura
- FX moves have big impact on prices
- BOJ closely watching impact on yen moves on the economy, prices
- Weak yen benefits exports, tourism but is negative for domestic-driven firms and households
- Decision on when to end negative rates depends on economic developments
- If Japan achieves sustained economic recovery, we won’t need YCC
- But unfortunately, the deflationary mindset has not been eradicated yet
- So now is not the time to get rid of YCC
BOJ Nakamura says Japan is no longer in deflation, but that mindset yet to be eradicated
Further remarks from Bank of Japan monetary policy board member
- BOJ must patiently maintain easy policy for time being
- Japan’s economy no longer in deflation but deflationary mindset is yet to be eradicated
- Current rise in deflation driven by pass-through of import costs, yet to be driven by wage gains
- Must scrutinise whether small, midsize firms are making progress in earning enough profits to sustain wage rises
- Tightening monetary policy before rise in sales prices lead to wage gains would curb demand, weigh on companies’ ability to earn profits
- Tweak to monetary policy needs scrutiny of economic conditions, cautious approach
- Need more time to shift to monetary tightening
- Sustainable, stable achievement of price target yet to be foreseen
- Japan’s economy recovering moderately
Japan Industrial Production (July, preliminary) -2.0% m/m (vs. expected -1.4%)
Japan Industrial Production (June, preliminary) -2.0% m/m
- vs. expected -1.4% and prior +2.4%
- -2.5% y/y vs. expected -1.4% and 0% prior
Japan’s government cuts its assessment of industrial output, says IP is see-sawing.
Forecasts:
- IP seen at +2.6% in August
- seen at +2.4% in September
Japan Retail Sales (July) +6.8% y/y (vs. expected +5.4%)
Japan Retail Sales (July) +5.8% y/y
- vs. expected +5.4% and +5.9% prior
+2.7% m/m
- prior -0.4%
South Korean industrial output in July -2.0% m/m (vs. expected -0.4%)
South Korea’s factory output was weaker than expected in July. Industrial output index -2.0% m/m
- expected -0.4%, prior -1.5%
- the fastest monthly fall since February
For the y/y, -8.0%
expected -5.2%, prior -5.9%
Australian data – Private sector credit in July +0.3% m/m from +0.3% in June
Reserve Bank of Australia data shows modest credit expansion on the month but not so encouraging y/y.
Australian data – Q2 Capex headline rose 2.8% vs. +1.2% expected
Some encouragement from business inverstment data from Australia in the second quarter.
- Total new capital expenditure rose by 2.8%
- Buildings and structures rose by 3.5%
- Equipment, plant and machinery rose by 1.9%
- Estimate 3 for 2023-24 is $157.8b. This is 14.5% higher than Estimate 2 for 2023-24
- Private new capital expenditure (capex) rose 2.8 per cent (seasonally adjusted, chain volume measure) in the June quarter 2023 and was 10.8 per cent higher than a year ago
- the result was driven by businesses investing more in new equipment and machinery (+1.9 per cent) as well as in building and structures (+3.5 per cent).
- Australian Bureau of Statistics (ABS) commentary: “Increased investment in equipment and machinery reflects a further easing of supply-chain disruptions, with the availability of vehicles improving significantly during the quarter. Some businesses also brought investment plans forward, ahead of the end of the temporary full expensing tax incentive on 30 June.” “The increase in investment in buildings and structures was boosted by a number of mining projects for resources such as lithium used in batteries, and the commencement of some previously delayed projects in non-mining industries.”
- The construction industry recorded the largest rise in total capex, up 30.5 per cent after large falls in the last two quarters. “The rebound in capex in the construction industry was driven by small businesses receiving vehicles and construction machinery after extended delivery delays,”
Australia’s monthly CPI data – slowing rate of inflation is an “encouraging development”
Australian July inflation data was published yesterday, dropping well under the median estimate.
ING on the result:
- The headline inflation rate has now fallen below 5% which will encourage thoughts that the RBA tightening cycle has peaked – though progress over the next few months will be harder. Our final 25bp rate hike call for 4Q23 is hanging by a thread
ANZ:
- The monthly Consumer Price Index (CPI) indicator for July 2023 was below the market and our expectation of 4.9% y/y, which is an encouraging development ahead of Q3 CPI.
- While electricity prices jumped in July (6.0% m/m including rebate impacts) and rents continued to accelerate, the annual increase in overall housing costs was broadly stable (7.3% y/y in July vs 7.4% in June).
New Zealand August Business Confidence -3.7% (vs. prior -13.1)
ANZ Business survey for August 2023
Business confidence -3.7%, highest in two years
- prior -13.7%
Activity outlook +11.2%
- prior +0.8%
Cryptocurrency News
Bitcoin falls 4% as SEC delays decisions on spot ETFs
- Bitcoin gives back the gains from the court case
Bitcoin was already down about 4% before the latest news hit on the SEC delaying decisions on bitcoin spot ETFs from WisdomTree, Invesco and Valkyrie.
The delay was largely expected so there might be a ‘sell the rumour, buy the fact’ trade in the works here.
US Nonfarm Payrolls could provide directional clues on Bitcoin
- Bitcoin price has been on a slump after the Grayscale win and trades around $27,300.
- Crypto markets are likely to be volatile with the release of US Core PCE price index numbers on Thursday and the US NFP on Friday.
- According to forecasts, the total jobs added in August is set to decline from 187,000 in July to 170,000.
Bitcoin price is likely to see an additional spike in volatility as the NFP number for August is set to be released on September 1. This event, in conjunction with others, will be a key data set that the US Federal Reserve will use to make interest rate decisions in September.
Key macroeconomic events that could affect Bitcoin price
According to forecasts, the total number of jobs added in August is around 170,000, which is a decline compared to July’s 187,000. This event is critical and can induce volatility in both the traditional and crypto markets should it deviate far from the forecasts.
Conclusion
Yes, the US NFP could provide another spike in volatility for Bitcoin price, but it is unlikely that this push will last for a large enough period for traders to take a punt on a directional trade. As a result, the macroeconomic data will have an effect that is nothing but ephemeral.
Still, the Fed could resort to either keeping the interest rates higher for longer or, worse, announcing another 25 basis point hike when it meets on September 19-20.The latter scenario is not outside the realm of possibility, and if it were to manifest, investors would notice both the stock and crypto markets heading south.
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