Headlines:
Bitcoin swings wildly as volatility in Fed expectations increases ahead of US CPI and FOMC decisionToday’s trade idea for oil tradersBitcoin has already won its battle, whereas Ethereum is only starting its ownHow oil prices influence inflation, inflation expectations and monetary policyThe bond market continues to tighten the screws, and everything else is feeling itOil prices extend gains as Yemen’s Houthis threaten broader Saudi operation after attacks hit energy sitesA-Book vs B-Book: How Brokers Actually Manage Your TradesUSD/JPY selloff extends further as Yen hits seven-month high; US CPI and BoJ in focus nextEuropean stock market open: A sluggish start as oil and rate concerns continue to stickFrench trade deficit grows larger in July on higher imports againWhat are the main events for today?Germany’s trade surplus widens sharply in July as imports slumpFX option expiries for 8 September 10am New York cutA BOJ rate hike is coming, but can the Japanese yen hold its gains?
Markets:
WTI crude oil up 2.66% to $93.91Gold down -0.22% to $4395EUR/USD down -0.10% to 1.1610USD/JPY up 0.03% to 154.36S&P 500 down -0.35% to 7700.00Bitcoin down -1.07% to $78,401
It’s been another light session in terms of data and news releases. On the economic data front, Germany’s trade surplus widened sharply to €21.3 billion in July from €15.4 billion, but the improvement was driven mainly by a 5.7% slump in imports, while exports fell 0.8%. In contrast, France’s trade deficit widened to €6.67 billion from €5.75 billion, as imports rose more strongly than exports. Overall, the data point to a mixed picture for the eurozone’s external sector, with Germany’s headline surplus masking weaker trade flows and France continuing to struggle with higher import costs, particularly from energy.US small business optimism cooled in August, with the NFIB index falling to 98.7 from 99.8 in July and missing expectations for 99.3. The decline was driven mainly by weaker expectations for business conditions and softer sales, while inflation became a bigger concern, with 16% of owners citing it as their top problem. Hiring plans also eased, although concerns over labor costs fell to their lowest since March 2021. Overall, the survey points to some cooling in small-business activity and sentiment, but the index remains above its long-run average.
On the news front, oil prices extended their gains as Iran-backed Houthis launched drone and ballistic-missile attacks on southern Saudi Arabia, hitting energy and military sites and disrupting operations at some facilities. Saudi authorities said 73 people were injured and fires broke out at several energy sites, while the Saudi-led coalition vowed a firm response and called the attacks a dangerous escalation. The developments have added to concerns over regional supply disruptions.
In the American session, we only have the weekly ADP jobs data and the NY Fed consumer inflation expectations survey. The data won’t change anything for the Fed, so the market reaction will likely be muted.
As a reminder, the Fed is focused solely on inflation now, and the US CPI report on Friday will decide whether the central bank hikes at the upcoming meeting or keeps rates steady for another month. The US CPI remains the main event of this week (barring a surprising breakthrough in US-Iran relations).
This article was written by Giuseppe Dellamotta at investinglive.com.