Summary:
- Stocks move higher after reports of US-China trade talks
- US inflation misses forecasts but USD still on the rise
- Cryptocurrencies drop back lower
- Top 3 charts to watch this wekk
- GBPNZD: how to take advantage of two big events this week
There was a sharp move higher for US indices shortly before the opening bell, with reports that the US and China are set to restart talks to defuse their trade war causing a flurry of buying. The news also support European bourses, which themselves saw further buying into their cash close at the end of the month with the DE30 and UK100 in a particularly bullish mood.
As the 2-day Fed meeting begins the latest inflation figures are sure to be in focus, and a lower than expected print in the measure said to be preferred by the bank could well impact the discussion. The US June PCE core inflation came in at +1.9% Y/Y which was less than the 2.0% expected and inline with the prior reading after a downwards revision from 2.0% previously.
Monday was marked by declines on the cryptocurrency market. Major cryptocurrencies have suffered losses over the past 24 hours. Today we’ve seen more declines with some sizable selling in all 5 markets. Bitcoin is lower by just under 5% at the time of writing and has fallen back to the 7700 level.
We start our weekly analysis of the Top 3 charts from the US500 as Wall Street is in focus amid mixed quarterly reports. The analysis also looks at the NZDUSD and Wheat.
The Bank of England meeting is decisively one of the most eagerly awaited events this week and taking a look at the market-implied probability one may realize that a 25 basis points rate increase is already a done deal. At the same time, the NZ dollar remains one of the most oversold major currencies as indicated by weekly CFTC reports increasing the likelihood of a bounce. In today’s analysis we focus on the GBPNZD cross outlining reasons for a possible decline.