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.

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