US infrastructure bill passes Senate

“The markets generally are unpredictable, so that one has to have different scenarios. The idea that you can actually predict what’s going to happen contradicts my way of looking at the market.” – George Soros

 

 

HEADLINES

 

 

• Dollar touches highest level in more than 4 months amid Fed speculation
• Oil Gains 3% in Recovery Ahead of U.S. Inventory Data
• Mounting delta variant risks halt gold’s slide
• S&P 500, Dow in Record Run as Infrastructure Bill Clears Senate
• Total crypto market value breaks $1.9T for the first time since May
• USD/JPY: Confident Fed to firm up the pair – ING

 

 

FOREX

 

 

Dollar touches highest level in more than 4 months amid Fed speculation

 

The U.S. dollar touched a its highest level in more than four months against the euro on Tuesday, as investors speculated further over whether recent strong jobs data could be enough to push the Federal Reserve to soon start tapering its bond-buying program.

 

 

COMMODITIES

 

 

Oil Gains 3% in Recovery Ahead of U.S. Inventory Data

 

Oil prices snapped a six-day losing streak as market participants took Covid worries and their potential impact on demand off their minds ahead of U.S. inventory data that is likely to show a weekly drawdown in stockpiles of crude, gasoline and diesel. WTI, the benchmark for U.S. oil, settled Tuesday’s trade up 2.7%, at $68.29 per barrel. WTI lost more than 9% over six previous sessions

 

Mounting delta variant risks halt gold’s slide

 

Gold edged up on Tuesday, pausing its steep sell-off on some lingering doubts over the economic impact of the new Delta COVID-19 variant, though a rally in the dollar and bond yields continued to grip the market.

 

 

STOCKS

 

 

S&P 500, Dow in Record Run as Infrastructure Bill Clears Senate

 

The Dow remained close to its record intraday high Tuesday, led by a jump in cyclicals including energy and industrials as investors looked ahead to a further economic boost amid progress on the $1 million infrastructure bill. The infrastructure bill passed in the Senate 69-30 on Tuesday, and now heads to the House of Representatives for approval, though there is some uncertainty in the House.

 

 

CRYPTO

 

 

Total crypto market value breaks $1.9T for the first time since May

 

 

The cryptocurrency market has continued a solid bullish trend in early August, with the total market capitalization nearing $2 trillion. According to data from crypto data aggregator CoinGecko, the total crypto market cap broke the $1.9-trillion mark on Monday, retouching this level for the first time since May 18.

 

 

ANALYSIS

 

 

USD/JPY: Confident Fed to firm up the pair – ING

 

“USD/JPY has held up pretty well in the face of the drop in US 10-year yields under 1.20%. We feel that thin summer conditions and heavy Fed buying are behind the drop in US yields – such that the move will be reversed in September. That could keep USD/JPY supported even though speculators are reasonably short JPY already.”

“Probably the biggest risk to USD/JPY now is that the Delta variant shuts down Asia and especially China more broadly – prompting a re-assessment of global growth and equity valuations. But that seems a risk case at present. Instead, a Fed sounding quietly confident can see US money market rates and USD/JPY firm up.”

 

 

CHART

 

 

US dollar / Japanese yen – Daily Candlesticks

Source: GKFX Prime Metatrader 4

USD/JPY is hitting the resistance first formed on April 1 around 110.7. Aside from the false breakout in June, oil has not been above this resistance in 4 months. Our assumption is the level breaks and oil makes new multi-year highs. - Prepared by Trading Writers*

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

SOURCE

 

https://www.fxstreet.com/economic-calendar
https://www.investing.com/news/commodities-news/oil-gains-3-in-recovery-ahead-of-us-inventory-data-2585965
https://www.investing.com/news/stock-market-news/sp-500-dow-in-record-run-as-infrastructure-bill-clears-senate-2585916
https://cointelegraph.com/news/total-crypto-market-value-breaks-1-9t-for-first-time-since-may
https://www.reuters.com/article/global-forex/forex-dollar-touches-highest-level-in-more-than-4-months-amid-fed-speculation-idUSL1N2PH1CU
https://www.fxstreet.com/news/usd-jpy-confident-fed-to-firm-up-the-pair-ing-202108100732