This week’s market preview highlights the key events and data releases to watch in the second week of August 2024. U.S. stocks slid last week, with small-cap shares and tech leading the way. Growth fears exacerbated by soft U.S. jobs data drove a broad global risk-off move.
U.S. two-year Treasury yields fell to 15-month lows near 3.90% as markets priced in the potential for a 50-basis point rate cut in September and multiple cuts through 2025.
KEY ECONOMIC INDICATORS
RBNZ interest rate decision
RBNZ rates decision is not clear cut.
Markets marginally favour it to reduce rates for the first time since the pandemic, putting the probability of a 25 basis point reduction to the cash rate to 5.25% at just over 60%.
Crude oil inventories
Commercial crude oil stockpiles, excluding the Strategic Petroleum Reserve, drop by 3.7 million barrels; Analysts predicted a fall of 500,000 barrels.
Global oil demand, meanwhile, is anticipated to reach 102.91 million bpd in 2024, while demand is expected to be around 104.68 million bpd in 2025.
Initial jobless claims
Initial claims for state unemployment benefits fell 17,000 to a seasonally adjusted 233,000 for the week ended Aug. 3, the Labor Department said on Thursday.
The largest drop in about 11 months.
Commodity prices are projected to experience a slight downturn in 2024 and 2025 but are expected to remain above pre-pandemic levels.
Technical indication shows us a potential incline on the commodities mark.
CURRENCIES
XAU/USD
S1-S3 – Means potential Support points. If the market declines further, these are the potential levels it can reach.
R1-R3 – Means potential Resistance points. If the market starts to increase again, these are the potential levels it can reach.
GBP/USD
United Kingdom Retail Sales (MoM) is taking place on Friday, August 16th at 07:00 GMT +1.
What is the forecast for United Kingdom Retail Sales (MoM)?
The consensus for the next United Kingdom Retail Sales (MoM) is 0.8, and the last deviation was -0.59735.
The Pound Sterling moves higher against the US Dollar on improved market sentiment.
BoE’s ( Bank of England) Mann warns about upside risks to price pressures.
The Fed is expected to cut interest rates by 25 bps in September.
Crude oil inventories expectations
The Inventory Report will be released this Wednesday, 14 August 2024 at 15:30 GMT+1.
Events since the last release of the Inventory Report:
U.S. crude oil posts more than 4% weekly gain as recession fears ease, Mideast tensions loom.
The stock market rebound after Monday’s sell-off combined with Middle East military tensions to lift oil prices this week.
Middle East Conflict to Remain a Critical Driver as it Continues to Underpin Oil Prices.
Previous Report Figures and Forecast Figures for the latest release -3,728M (Barrels of Oil).
Forecast Figures for 14 August 2024 – TBA (To be Announced) (Barrels of Oil).
One-year commodity assets performance
The year-to-date performance on commodity assets with the potential range can be achieved until the end of 2024.
MARKET NEWS
Stocks close higher, clawing back much of the week’s losses in a major recovery from Monday’s sell-off
The S&P 500 advanced 0.47% to finish at 5,344.16.
The Nasdaq Composite added 0.51% to close at 16,745.30.
The Dow Jones Industrial Average inched up 51 points, or 0.13%, to end at 39,497.54.
The blue-chip Dow and tech-heavy Nasdaq were down on the week by 0.6% and 0.18%, respectively.
Oil extends gains for fifth session on Mideast tensions, US data
Brent crude futures were up to $80.39 a barrel.
US West Texas Intermediate crude futures rose 88 cents, or 1.2%, to $77.72.
Brent gained 3.7% last week, while WTI rose by 4.5%, buoyed by economic data and increased hopes of a US interest rate cut.
Dollar edges higher ahead of key CPI release
At 04:30 ET (09:30 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher to 103.017
July CPI data is expected to show that inflation continued to edge closer to the Fed’s 2% annual target, with forecasts tipping annual core inflation to fall a tick to 3.2%
In Europe, EUR/USD edged higher to 1.0920, not far from last week’s 1.1009 peak, the pair’s highest level since January.
GBP/USD traded flat at 1.2759 at the start of a busy U.K. economic data calendar this week as investors look for clues as to whether the Bank of England will continue its rate-cutting cycle next month.
