Morning Brief: 08/04/2021
The status quo trades remain in play on Thursday, after the FOMC minutes revealed that US policy makers are in no hurry to change monetary policy in the United States, despite the recent string of strong data points from the world’s largest economy.
Looking more closely at yesterday’s minutes accounts, the FOMC said “Participants noted that it would likely be some time until substantial further progress toward the committee’s maximum-employment and price-stability goals would be realized.”
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Those words helped to underpin weakness in the greenback, strength in stocks, and also kept yields under pressure. Traders now look to a scheduled speech from Federal Reserve Chair Jerome Powell later today.
Today’s Asian session has been very quiet, the USDJPY pair continues to hold towards the 109.60 support level, while the Nikkei225 is largely flat. Antipodean currencies are starting to push higher due to upward momentum in US futures.
Sterling weakness persists while the EURUSD pair is hovering towards the 1.1880 level. Potentially, major flows into the EURGBP pair have been influencing the sharp decline in sterling this week.
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Gold is still attempting to push higher and is starting to find more interest above the $1,740 level right now. It should be noted that the yellow metal is at risk of being sold if bulls fail to break the $1,755 level over the coming days.
WTI and Brent oil remain in limbo, with neither bulls nor bears gaining much traction this week. Recent EIA data showed an unexpected draw in oil supply, while the recent EIA report also revised down its crude oil production forecasts.
Bitcoin has recovered back towards the $57,000 level after dropping towards the $55,400 support level yesterday. Whale selling towards the BTCUSD pair hit a three-month high on Wednesday.
Data Watch
The economic calendar in the European session is very light today with the release of German factory orders and the ECB policy meeting accounts headlining the mornings releases.
During the United States trading session weekly jobs data from the world’s largest economy and a scheduled speech from Chair Powell are set to be the main events for financial markets.
A number of other Federal Reserve members are set to speak later today. Traders and investors will be on high alert for any hawkish commentary from Chair Powell and other FED policy makers today.
