Global Market Snapshot 22nd July 2024

Several key economic data releases are scheduled for this week, including the Chicago Fed National Activity Index, existing home sales data, goods trade balance, and the preliminary S&P Global Manufacturing and Services PMI. These data points will significantly impact the foreign exchange market. Additionally, speeches from officials of the Federal Reserve and other major central banks will provide further guidance to the market.

USD: Strong Rebound on Safe-Haven Demand

Despite the pressure on the dollar from expectations of a Federal Reserve rate cut in September and the fragility of the U.S. labour market, the dollar’s role as a safe-haven currency has re-emerged amidst global service sector shutdowns and uncertainties surrounding the Biden administration’s restrictions on technology exports to China. The dollar, as measured by the Dollar Index, has continued its rebound, breaking through the 104.00 level. On a weekly basis, the index has successfully halted a two-week losing streak.

GBPUSD performance this week has been dragged down by disappointing retail sales data from the UK for June. The data showed that UK retail sales in June fell more than expected, heightening market concerns about the UK’s economic outlook. As a result, the pound fell 0.25% against the dollar, trading at $1.2920, ending a three-week streak of gains.

USD/CAD rose 25 pips to 1.3729. Canada’s Producer Price Index (PPI) for June increased by 2.8% year-on-year (expected +1.8%), while May retail sales fell by 0.8% month-on-month (expected -0.6%).

USDJPY rose by 9 pips to 157.56, the yen exhibited some volatility due to the dual impact of central bank intervention and rising inflation. Although the Bank of Japan reportedly intervened in the market, the continuous rise in inflation indicates signs of economic recovery.

A global tech outage broke out last Friday, disrupting operations in multiple industries including airlines, finance and healthcare. Apparently, a software glitch at cyber-security firm CrowdStrike (CRWD) caused computers using Microsoft (MSFT) Windows operating system to crash.
CrowdStrike (CRWD) sank 11.10%, becoming the worst performing stock in the S&P 500. Microsoft (MSFT) was down 0.74%.

Tesla (TSLA) fell 4.02%, and Nvidia (NVDA) was down 2.61%.

BTC Bitcoin has surged past $68,000 following U.S. President Biden’s announcement of his withdrawal from the 2024 presidential election.