1 Minute Market Rundown – 9th August 2022

Markets Stand Still
USD to Remain Bid?
Crypto Grinds Higher

It feels like I could just copy and paste yesterday’s note such is the muted moves we are seeing in markets at the moment.

Whilst I am of the opinion that the employment report out of the US should have given the market impetus to take the USD higher – it seems not enough are of the same view. Looking at equities and FX this morning you’d be forgiven for thinking that the markets have been shut for 24 hours. With very little economic data on the calendar today, I actually fear another quiet day.

The fireworks that I (and the rest of the market) is looking for may instead come tomorrow where we will get the latest US CPI print. However, I won’t get ahead of myself and will instead focus on today and my views are unchanged. I sit a little short EUR/USD and am happy to buy USD dips on the day. I will say though that the pain trade will be a USD sell off and a risk rally. The short term market must be sitting long USDs (like myself) and the longer it goes without rallying they will be getting nervous. If EUR/USD was to have a stop loss run toward 1.0270/00, I would be more than happy to sell into it.

The only interesting thing of note for me is actually crypto. It continues to trade firm and grind its way higher with even the alts posting gains (DOT +8%). ETH took out $1750 to trade briefly above $1800 while BTC traded above $24000. The question for me is whether crypto is leading the way here and other markets are due to play catch up or it’s just an outlier. I have used the rally in ETH to take profit on some of the longs I held as I continue to respect the levels. My view has always been that I need to see inflation data tick lower before I truly feel comfortable calling a low in place and that hasn’t changed. Perhaps tomorrow will embolden me to call a low in place – one can only hope.

Good luck all.

Lux Thiagarajah – Head of Markets

1 Minute Market Rundown – 9th August 2022

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