1 Minute Market Rundown – 25th August 2022
Jackson Hole Testimony Tomorrow
Usa Data Continues to Unimpress
USD Down and Risk Up
Yesterday the market spent most of the day continuing the recent themes before reversing in spectacular fashion late in the afternoon. Stocks were heavy, Crypto subdued and in FX eur/usd spent hours trying to pierce 0.9900 before what appeared to be large USD selling at the 4 pm fix emerged. Broader risk markets took time to follow suit but eventually joined the party and we open strongly today in stocks, risk and crypto. Euro is back above parity and all is good in the world right?
Well no. Data yesterday continued to disappoint and what it feels like to me is we have low participation late summer markets that will continue to gyrate on smaller than normal volumes.
Risk may stay bid today as I suspect volumes will be even lower ahead of the key Powell testimony on Friday , but I will not be chasing anything higher. The markets are desperate for a dovish pivot from the FOMC but they simply aren’t going to get it in my view. I will go into what I expect a little deeper tomorrow.
On the day I expect little and frankly have little risk appetite myself. It will be no surprise to regular readers that I prefer to buy Usd dips on the day and ease into risk rallies but my positioning will be light on the day. Euro at 1.0080, usd yen at 135.80 and Cable towards 1.1900 are the ideal entry points.
Crypto remains the quietest market in the strange world we live in. Experience tells us this won’t last and I continue to be drawn to the downside for the next move. Today is unlikely to be the day for it but we might just see 1770 and 22.500 where I will risk a short position into tomorrow.
Good luck all.
Richard Usher – Head of OTC Trading
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