“Markets Rebound, China Concerns Linger, US Presidential Debate Eyed”On Tuesday, Asian stocks experienced a modest advance; however, they were unable to maintain an optimistic rally on Wall Street due to concerns regarding the Chinese economy’s decline. Overnight data indicated that China’s exports experienced their most significant growth since March 2023 in August. This suggests that manufacturers are expediting the production of orders in anticipation of tariffs from several trade partners. Conversely, imports failed to meet expectations due to lackluster domestic demand. This was in response to the inflation figures released on Monday, which indicated that domestic demand remained fragile as producer price deflation deteriorated. This has prompted requests for additional stimulus from Beijing to support its economy. The Chinese market was further impacted by the escalating trade tensions that resulted from the U.S. House of Representatives’ passage of a bill on Monday. The bill seeks to restrict business with China’s WuXi AppTec, BGI, and several other biotech companies on national security grounds. The Hang Seng Mainland Properties Index plummeted to a record low, even though the broader Hang Seng Index in Hong Kong gained 0.4%. China’s beleaguered property sector remained a significant drag. The Nikkei 225 of Japan added 0.23% and appeared to be on the brink of reversing five consecutive sessions of losses.In the UK the Labour Force Survey (LFS) reported a substantial increase in employment levels of 265k 3m/3m up to July, which was higher than the anticipated 123k. However, the August reading from the more recent HMRC dataset indicated a loss of 59k payrolled employees. In contrast, the ex-bonus measure experienced a further moderation in average earnings to 5.1% 3m/y in July, as anticipated, from 5.4% 3m/y. Nevertheless, the median pay growth rate for August increased from 5.5% y/y to 6.2% y/y in the HMRC real-time indicator. The unemployment rate’s return to 4.1% was anticipated. What is the underlying message that emerges from this? There does not appear to be sufficient evidence to dissuade the MPC from adhering to the current expectations for a relatively gradual rate-cutting trajectory, despite a few erroneous headlines.Stateside all eyes will be the first debate between Democrat Kamala Harris and Republican Donald Trump which will take place later on Tuesday, in the lead-up to the Presidential election on November 5. The two candidates are currently in a close contest for the Presidency. Overnight Newswire Updates of Note
Janet Yellen’s Predictions For The US Economy
BoE To Sell More Short Gilts To Boost Market Liquidity
Starmer Taps New Labour Figures In Hiring Spree
Kamala Harris – Donald Trump Debate Ahead
Australia’s Chalmers Seeks Support For RBA Reform
Aussie Slips On Iron Ore And US Jobs Market Concerns
Japan’s Foreign Bond Buying Hits Record, Strong Yen
China’s Exports Beat, Imports Fall On Weak Demand
Dollar Rises As Traders Scale Back Fed Rate Cut Bets
(Sourced from reliable financial news outlets)FX Options Expiries For 10am New York Cut (1BLN+ represents larger expiries, more magnetic when trading within daily ATR)
EUR/USD: 1.1000 (1.9BLN), 1.1015 (354M), 1.1040-50 (2BLN), 1.1060-75 (1BLN)
1.1100 (1.7BLN), 1.1125 (2.1BLN), 1.1150 (509M), 1.1175 (1BLN)
USD/CHF: 0.8545-50 (411M). EUR/CHF: 0.9425 (422M), 0.9440-50 (450M)
GBP/USD: 1.3200 (296M). EUR/GBP: 0.8400-05 (524M), 0.8470 (612M)
AUD/USD: 0.6665 (226M), 0.6685-95 (2.4BLN), 0.6700 (337M)
AUD/NZD: 1.0940 (300M). EUR/AUD: 1.6520 (505M)
USD/CAD: 1.3510 (952M), 1.3540 (270M), 1.3585 (488M), 1.3625 (400M)
USD/JPY: 142.80 (378M), 143.00 (400M), 143.50 (340M)
EUR/JPY: 160.00 (1BLN), 164.50 (500M)
EUR/SEK: 11.50 (486M)
CFTC Data As Of 6/9/24
Bitcoin net long position is 108 contracts
Swiss Franc posts net short position of -21,882 contracts
British Pound net long position is 108,078 contracts
Euro net long position is 100,018 contracts
Japanese Yen net long position is 41,116 contracts
Equity fund managers raise S&P 500 CME net long position by 1,368 contracts to 991,219
Equity fund speculators trim S&P 500 CME net short position by 85,360 contracts to 271,561
Speculators increase CBOT US 10-year Treasury futures net short position by 88,390 contracts to 1,002,827
Technical & Trade Views SP500 Bullish Above Bearish Below 5490
Daily VWAP bullish
Weekly VWAP bearish
Above 5510 opens 5555
Primary resistance 5525
Primary objective is 5325
EURUSD Bullish Above Bearish Below 1.1140
Daily VWAP bearish
Weekly VWAP bullish
Below 1.09 opens 1.0850
Primary resistance 1.1150
Primary objective 1.0950
GBPUSD Bullish Above Bearish Below 1.3190
Daily VWAP bearish
Weekly VWAP bullish
Below 1.3050 opens 1.2960
Primary support is 1.2730
Primary objective 1.3390
USDJPY Bullish Above Bearish Below 143.70
Daily VWAP bearish
Weekly VWAP bearish
Above 146 opens 150
Primary support 140
Primary objective is 139.60
XAUUSD Bullish Above Bearish Below 2500
Daily VWAP bullish
Weekly VWAP bullish
Below 2450 opens 2400
Primary support 2300
Primary objective is 2598
BTCUSD Bullish Above Bearish Below 54000
Daily VWAP bullish
Weekly VWAP bearish
Below 54000 opens 500000
Primary support is 500000
Primary objective is 700000
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