The Global PMIs will provide the first data on economic activity for the month of August. In addition to the Australian and Japanese PMIs in the Asian session, New Zealand will report second quarter retail sales. Later in Canada there will be retail sales data, and in the United States there will be housing data.
Here’s what to know on Wednesday, August 23:
Stocks in Asia rallied, with the Shanghai index rising 0.88% after falling on Monday. However, a cautious tone continues to prevail after the lower-than-expected cut in interest rates by the People’s Bank of China. On Wall Street, the Dow Jones lost 0.51%, the S&P 500 fell 0.28% and the Nasdaq gained 0.06%. The feeling of caution continues to dominate.
Concerns about China, coupled with further downgrades of US banks by S&P, and expectations of prolonged high interest rates, are putting downward pressure on market sentiment. The upcoming annual Jackson Hole Symposium, which begins Thursday, is of significant importance, with Fed Chairman Powell speaking on Friday. Ahead of the symposium, US yields rose, reaching new multi-year highs, with the 10-year yield topping 4.30%.
Data released Tuesday showed US existing home sales fell 2.2% in July to an annual rate of 4.07 million, falling below the market consensus of 4.15 million. The Richmond Fed’s manufacturing index improved in August from -9 to -7, in line with market consensus.
Wells Fargo analysts weigh in on existing home sales
The impact of the recent resurgence in mortgage rates is becoming increasingly apparent. Existing home sales decreased 2.2% in July, marking the second straight monthly decline. Since existing home sales reflect contract closings, the July data largely reflects activity in June, when mortgage rates averaged 6.8%, but rates have since risen.
In the United States, new home sales will be released on Wednesday. In addition, the S&P Global PMI Index is due to be released, and the Composite Index is expected to hold at 52 points. The focus remains on central bankers ahead of the Jackson Hole Symposium.
The EUR/USD pair initially rallied as high as 1.0930 but then turned lower and fell to test the 1.0830 support zone. The pair remains under pressure and is approaching the 200-day SMA (1.0799).
Eurozone PMI data will be released on Wednesday. The Composite PMI is expected to decline from 48.6 to 48.5 points. Weaker than expected numbers could weigh on the Euro. In addition, Eurostat will publish the August preliminary reading of Consumer Confidence later in the day.
UK government borrowing in July came in below forecast at £4.3bn, £3.4bn more than in July 2022. From April to July, the budget deficit was £56.6bn, £11.3bn less than expected. planned in March by the Office for Budgetary Responsibility. This gives rise to the Government to consider tax cuts. The GBP/USD pair traded above the 20-day SMA, but then returned below 1.2750. The pair is consolidating with a short-term bullish bias. The UK S&P Global/CIPS composite PMI is expected to decline to 50.3 from 50.8, with contractions in both Services (51.5 to 50.8) and Manufacturing (45.3 to 45).
USD/JPY is stable near 146.00 and above the key near-term zone of 145.00, supported by higher US Treasury yields.
USD/CAD continues to trade near monthly highs above 1.3550 with a bullish bias. On Wednesday, Canada will report June Retail Sales, which is expected to be flat compared to May.
AUD/USD finished off Tuesday’s daily highs, trading around 0.6420. The pair rallied for the third day in a row, but the momentum has moderated. The Australian S&P Global Manufacturing PMI is expected to remain unchanged at 49.6, and the Services PMI at 47.9.
The NZD/USD pair bounced after finding support at 0.5900. It peaked at 0.5970 but then pulled back to 0.5940. New Zealand will report second quarter retail sales, which are expected to show a decline of 2.6%.
Gold rose slightly, but failed to recover $1,900. Despite the rebound, risk sentiment continues to lean to the downside. Silver rallied for the fourth day in a row, reaching levels above the 20-day SMA, settling around $23.40.
Cryptocurrencies were down, with Bitcoin down more than 1% to $25,800, and Ethereum shedding almost 3% to $1,625.
Did you like this article? Help us with your comments by answering this survey:
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
