Relentless Yen Rally in Risk-Off Market: Will US GDP Turn the Tide?
| Action Insight Daily Report 7-25-24 |
Relentless Yen Rally in Risk-Off Market: Will US GDP Turn the Tide? |
Risk aversion has firmly gripped the markets, leading to the steepest selloff in US stocks since 2022 overnight. This sharp decline continued into the Asian trading session, with Nikkei plunging nearly 3%. The market rout is further exacerbated by a broad decline in base metals, oil, and even cryptocurrencies, signaling a widespread flight to safety. Amidst this backdrop, Japanese Yen's rally appears unstoppable. Yen, along with Swiss Franc and Dollar, are benefiting from their status as safe-haven currencies. Conversely, commodity currencies such as the Australian Dollar are bearing the brunt of the selloff, sinking to the bottom of the performance charts. Euro and British Pound are faring relatively better, positioning themselves in the middle of the pack. Today's key economic focus is US Q2 GDP advance report, where growth is expected to pick up to 2.0% annualized from Q1's 1.4%. This anticipated increase is attributed to resilient consumer spending, which has persisted despite inflationary pressures and high borrowing costs. However, there are concerns about how long this resilience can last, especially as pandemic-era savings dwindle. A lower-than-expected GDP reading could strengthen the case for Fed to implement two interest rate cuts this year. Yet, it's uncertain if the markets will maintain the trend of interpreting "bad news as good news.".... |
EUR/CHF Daily Outlook Daily Pivots: (S1) 0.9563; (P) 0.9620; (R1) 0.9652; More.... EUR/CHF's fall from 0.9772 continues today and intraday bias stays on the downside. With 61.8% retracement of 0.9476 to 0.9772 at 0.9589 broken, next target is 0.9476 low. Firm break there will resume whole fall from 0.9928 to 100% projection of 0.9928 to 0.94767 from 0.9772 at .9320. On the upside, above 0.9641 support turned resistance will turn intraday bias neutral first. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:50 | JPY | Corporate Service Price Index Y/Y Jun | 3.00% | 2.60% | 2.50% | 2.70% | | 08:00 | EUR | Germany IFO Business Climate Jul | 89 | 88.6 | | 08:00 | EUR | Germany IFO Current Assessment Jul | 88.5 | 88.3 | | 08:00 | EUR | Germany IFO Expectations Jul | 89 | 89 | | 08:00 | EUR | Eurozone M3 Money Supply Y/Y Jun | 1.90% | 1.60% | | 12:30 | USD | Initial Jobless Claims (Jul 19) | 238K | 243K | | 12:30 | USD | GDP Annualized Q2 P | 2.00% | 1.40% | | 12:30 | USD | GDP Price Index Q2 P | 2.60% | 3.10% | | 12:30 | USD | Durable Goods Orders Jun | 0.40% | 0.10% | | 12:30 | USD | Durable Goods Orders ex Transport Jun | 0.20% | -0.10% | | 14:30 | USD | Natural Gas Storage | 13B | 10B |
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