Forex Market Analysis: 05 August 2024

August 5, 2024

This week’s market preview highlights the key events and data releases likely to drive market movements. Economic data so far are sparking Recession fears as a Global Stock sell-off sets to continue.

Key Economic Indicators

ISM Non-Manufacturing PMI (July):

A reading above 50 percent indicates the non-manufacturing sector economy is generally expanding, while below 50 percent signals contraction.

Given the large proportion of the US economy engaged in the services sector, this report offers crucial insights into the overall health of the US economy.

Crude oil inventories:

Weak manufacturing data and surging jobless claims weighed on the oil market, as worries about the U.S. economy outweighed the risk of regional conflict in the Middle East.

Initial jobless claims:

The weekly initial jobless claims report will be critical for assessing labour market conditions.

Index Market Dips on Recession Worries

This week saw a significant slide in the index market due to recession fears following key economic indicators such as GDP reports, inflation data, and employment reports. The Dow Futures, in particular, experienced a drop of more than 600 points after the Nasdaq fell into a correction.

Technical indications showing us a potential decline in the US Index market, according to Investing.com, amid Recession Fears after Key Economic data release.

• S1-S3 mean potential Support points. If the market declines further, these are the potential levels it can reach.
• R1-R3 mean potential Resistance points. If the market starts to increase again, these are the potential levels it can reach.

Crude Oil Inventories Expectations

The Inventory Report is scheduled to be released this Wednesday, 07 August 2024 at 15:30 GMT+1

Events since the last release of the Inventory Report

• Saudi Aramco Hikes Oil Prices for First Time in Months
• Chinese oil demand has been one of the biggest factors driving oil price movements lately, mostly determining a generally pessimistic mood on the market due to disappointing economic indicators and weaker oil import growth.
• U.S. crude oil falls 2% as economic worries outweigh Middle East escalation.

Previous Report Figures and Forecast Figures for the latest release -3,436M (Barrels of Oil)

Gold Prices Rise Close to Record Highs Amid Recession Fears, Rate Cut Bets

Spot gold rose 0.4% to $2,453.51 an ounce, while gold futures expiring in December increased by 1% to $2,495.40 an ounce by 00:51 ET (04:51 GMT).

In the meantime, silver futures jumped 1.2% to $28.720 an ounce, reflecting increased demand for the metal, while platinum futures fell 0.8% to $958.40 an ounce, suggesting weaker market conditions for platinum.

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