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On Thursday, stocks in the US ended the session down. The Dow Jones Index (US30) was down 0.43%, while the S&P 500 Index (US500) fell by 0.88%. The Nasdaq Technology Index (US100) closed negative at 1.67% yesterday. The rise in bond yields on Thursday was negative for stocks. Hawkish comments from Kansas City Fed President Schmid pushed bond yields higher when he said he wanted to see more economic data before supporting any decision to cut interest rates, as demand could rise again if the Fed is not careful. On the other hand, Boston Fed President Colleen said she expects the Fed to begin easing interest rates soon and that a “gradual, methodical pace” of rate cuts would likely be appropriate. Also, Philadelphia Fed President Harker said that he is agreeable to an interest rate cut in September if data align with expectations and that a “slow, methodical approach to lowering rates is the right way to go.”

The US weekly initial jobless claims rose by 4,000 to 232,000, matching expectations. S&P's US manufacturing PMI fell by 1.6 to 48.0, weaker than expectations of 49.5 and the lowest report in 8 months. US existing home sales for July rose by 1.3% m/m to 3.95 million, slightly stronger than expectations of 3.94 million. Today, markets await Fed Chair Powell's opening comments at the Fed's annual symposium in Jackson Hole, Wyoming, for new insights on the Fed's future policy path. Powell is expected to indicate a willingness to cut rates in September but will not specify the exact timing or size of the cut. Markets rate the odds of a 25 bps rate cut at the September 17-18 FOMC meeting at 100% and a 50 bps rate cut at 25%.

Bitcoin has held its recent rise to above $60,000, hitting its highest levels in three weeks. However, recent data showed that bitcoin inventories held by miners reached the highest level in two years. An increase in bitcoin inventories held by miners has historically been associated with falling prices, suggesting that miners may be preparing to sell large amounts of bitcoin.

Equity markets in Europe mostly went up yesterday. Germany's DAX (DE40) rose by 0.24%, France's CAC 40 (FR40) closed down 0.01%, Spain's IBEX 35 (ES35) added 0.37%, and the UK's FTSE 100 (UK100) closed upv0.05%. The S&P Eurozone Manufacturing PMI for August from S&P fell by 0.2 to 45.6, weaker than expected. However, the Eurozone Composite PMI for August unexpectedly rose by 1.0 to 51.2, stronger than expectations for a decline to 50.1. The ECB reported that Eurozone wage growth fell to 3.6% y/y in Q2 from 4.7% y/y in Q1. The eurozone consumer confidence index unexpectedly fell by 0.4 to 13.4 in August, weaker than expectations of an increase to 12.6.

The ECB's July 17-18 policy meeting summary states that “the September meeting was an appropriate time to reassess the level of monetary policy tightening, as new economic data and a new set of staff forecasts will emerge.” Swaps discount the odds of a 25 bps ECB rate cut at the September 12 meeting at 97%.

Asian markets were mostly up yesterday. Japan's Nikkei 225 (JP225) rose by 0.68% yesterday, China's FTSE China A50 (CHA50) added 0.35%, Hong Kong's Hang Seng (HK50) gained 1.44% over yesterday and Australia's ASX 200 (AU200) was positive 0.21%.

The Bank of Japan (BoJ) reiterated its commitment to raise interest rates if inflation steadily reaches its 2% target but realizes that markets at home and abroad remain volatile, BoJ Governor Kazuo Ueda told parliament on Friday. He added that the central bank continues to monitor market volatility following its decision to raise borrowing costs in July. Ueda emphasized that the BoJ's stance on adjusting the degree of monetary policy easing has not changed.

Singapore's annual inflation rate in July 2024 was 2.4%, unchanged from the previous month, the lowest since August 2021, and below market forecasts of 2.5%. The annualized core inflation rate fell to 2.5% from 2.9% in the previous month, the lowest since February 2022, and fell short of forecasts of 2.9%.

• S&P 500 (US500) 5,570.64 −50.21 (−0.89%)
• Dow Jones (US30) 40,712.78 −177.71 (−0.43%)
• DAX (DE40) 18,493.39 +44.44 (+0.24%)
• FTSE 100 (UK100) 8,288.00 +4.57 (+0.06%)
• USD Index 101.52 +0.48 (+0.47%)
   

Important events today:

• – New Zealand Retail Sales (q/q) at 01:45 (GMT+3);
• – Japan National Core CPI (m/m) at 02:30 (GMT+3);
• – Singapore Consumer Price Index (m/m) at 08:00 (GMT+3);
• – Jackson Hole Symposium at 15:00 (GMT+3);
• – Canada Retail Sales (m/m) at 15:30 (GMT+3);
• – US Fed Chair Powell Speaks at 17:00 (GMT+3);
• – US New Home Sales (m/m) at 17:00 (GMT+3);
• – UK BoE Gov Bailey Speaks at 22:00 (GMT+3).

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