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Friday's weak US jobs data has strongly boosted the probability of the Federal Reserve cutting rates in September, sending stock markets modestly higher.
- It has been a relatively quiet start to the week, especially in the Forex market. The major story is that stock markets globally are mostly advancing, led higher by Asian indices so far today, because the perceived likelihood of a rate cut by the Federal Reserve at its next meeting in September has risen sharply after weak US economic data was released at the end of last week. Markets now see a 90% probability of a 0.25% rate cut. All the major Asian indices are trading higher today, notably the HSI which is up by 0.64% on the day.
- The precious metal Gold advanced moderately yesterday, building on its strong gain last Friday. It is the only precious metal whose long-term bullish trend survived last week's strong selloff in risky assets.
- We are generally seeing a minor recovery in risky assets this week so far.
- In the Forex market, the Australian Dollar has been the strongest major currency since today's Tokyo open, while the Swiss Franc has been the weakest. The numbers are relatively low, so probably mean little.
- There will be high impact data releases today in the USA (ISM Services PMI data) and in New Zealand (Unemployment Rate).