Due to speculation about the future of Federal Reserve Chair Jerome Powell, the US stock market experienced a volatile trading day. The US dollar recovered some of the ground lost on Wednesday, while Asian stock markets struggled to find their direction.
The US dollar rose against all G10 currencies, continuing its upward trend this month. The exchange rate of the Japanese yen against the US dollar dropped to 148.41, and some currency strategists predict that it may fall below 150. The Australian dollar fell and government bonds declined as the market expected the central bank to cut interest rates in August. Shares of Taiwan Semiconductor Manufacturing Corporation fell ahead of the release of its financial report later on Thursday.
S&p 500 index futures fell 0.2% after U.S. stocks rose after President Donald Trump played down the possibility that he might fire Powell soon. U.S. Treasury yields fell, with the 10-year yield rising by 1 basis point to 4.47%.
On Wednesday, speculation surrounding Powell led to a decline in the US dollar, US stocks and US Treasury yields. Subsequently, Trump clarified that he “has no intention of taking any action against the chair of the Federal Reserve”, easing market concerns. Trump hopes to lower interest rates, which is the reason why he is dissatisfied with Powell. Meanwhile, John Williams, president of the Federal Reserve Bank of New York, defended the Fed’s restrictive stance, saying it was completely reasonable.
Aaron Chwee, head of wealth advisory at OverSEbank, wrote: “The repeated attacks on Powell by the Trump administration and Trump’s insistence on choosing only a new chair to cut interest rates have raised concerns about the continued independence of the central bank.”
Trump also said that he would write to more than 150 countries to inform them of their tariff rates and indicated that the tariffs imposed might be 10% or 15%.
Brian Moynihan, the CEO of Bank of America, David Solomon, the CEO of Goldman Sachs, and Jamie Dimon, the CEO of jpmorgan Chase, jointly emphasized the importance of the Federal Reserve’s autonomy. Moynihan said in an interview with Bloomberg Television on Wednesday that the Federal Reserve is “inherently independent”.
George Saraveros of Deutsche Bank recently said that Trump’s firing of Powell would be an underestimated risk that could trigger a sell-off of the US dollar and US Treasuries. He said that if Trump forces Powell to step down, the trade-weighted exchange rate of the US dollar could fall by at least 3% to 4% in the next 24 hours, and fixed-income bonds could also suffer a sell-off of 30 to 40 basis points.
Michael Ferrowley, chief U.S. economist at jpmorgan Chase, said, “After the president subsequently retracted his remarks about removing Powell, the current crisis may have passed, although we doubt whether it is completely over.”
Technical analysis
Gold: Yesterday, we arranged a combination of green and blue positive dorahead signals in the 3318-3331 area, and it turned out that this area was very effective. After testing this area, the price rebounded above 3,370 at its highest. The intraday price has once again retested this area, but at this point, a cautious attitude is needed. We only suggest attempting to recaptured the dodo signal of the new momentum breakthrough after 3345/50 within the day. And the rebound signal after the liquidity around 3310 was swept again. For detailed locations, please consult the plugin.
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V: Hana-fgfg and note the message 666
The Nasdaq: The overnight liquidity sell-off was about 50 points less than we had expected. We still can’t let our guard down today. If there is a breakout upward trend, one can only attempt with a light position and a low profit-to-loss ratio. At the same time, it is still necessary to maintain low liquidity and then catch a rebound of the dott signal. For detailed locations, please consult the plugin.
(Nasdaq 15-minute chart）
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V: Hana-fgfg and note the message 666
Crude oil: Pay attention to the intraday dividing line between bulls and bears around 67. You can attempt the first wave of momentum breakthrough, but try to tighten the profit-to-loss ratio as much as possible. When there is a pullback, you can launch the second wave. But the prerequisite is that the first wave of the market has already seen the reduction of positions and protection measures taken. For detailed locations, please consult the plugin.
(Crude oil 15-minute chart）
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V: Hana-fgfg and note the message 666
Key financial data and events to focus on today:
The unemployment rate in the UK for June at 14:00
The final reading of the Eurozone consumer price index for June is at 17:00
U.S. June retail sales (monthly rate) 20:30
20:30 US seasonally adjusted initial jobless claims for last week (in thousands)(as of 0712)
At 22:00, US Federal Reserve Governor Kugler delivered a speech on the housing market and the economic outlook of the United States
