Yesterday was a typical ‘bad news is good news’ day. Risk sentiment in the US and across the globe was boosted by an unexpected dip in US job openings to below 9 mio jobs in July, the lowest levels since more than two years, and an unexpected fall in consumer confidence in August.

Today, all eyes are on the US ADP report and the latest GDP update. The ADP report is expected to reveal below 200K new private job additions in August, while the US growth is expected to be revised from 2% to 2.4% for the Q2 with core PCE prices seen down from 4.90% to 3.80%.

In Europe, however, that slow landing seems harder to achieve. Today, investors will keep an eye on the latest inflation updates from euro-area countries, and business and sentiment surveys. The EURUSD flirted with 1.09 yesterday, as investors trimmed their long dollar positions after the weak JOLTS data. The AUDUSD rebounded, even though the latest CPI print showed that inflation in Australia slowed below 5% in July, a 17-month low. In the UK, shop prices fell to a 10-month low. But it won’t be enough for central bankers to cry victory just yet, because the positive pressure in energy prices remains a major concern for the months ahead.

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The week started in a relatively good mood. The S&P500 posted its first back-to-back gains this month, even though the US 2-year yield advanced to a fresh high since July with the 2 and 5-year treasury auctions hitting the highest yields since before the 2008 crisis. One would think that the Chinese stimulus measures have lifted up the sentiment across global equities, but the CSI 300 closed yesterday just around 1% higher. As such, yesterday was just another day the Chinese stimulus measures didn’t get the attention Chinese officials were hoping for.

Elsewhere, the softer US dollar gave some breathing room to other currencies yesterday. The EURUSD bulls won a battle near the 200-DMA, the USDJPY is steady around 146.50 and crude oil steadied above the $80pb with the news that the tropical storm Idalia could interrupt crude production in the Gulf Coast and put an additional positive pressure on oil prices. Gold is better bid above the $1900 thanks to a retreat in the US 10-year yield. But silver is even better bid!

Today, the US JOLTS data is expected to post a third month below 10mio job openings. A number lower than expectations would point to loosening jobs market and could soften the hawkish Federal Reserve (Fed) expectations, while a strong figure will keep the economists and the Fed officials in a state of confusion.

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The Federal Reserve (Fed) Chair Jerome Powell’s Jackson Hole speech was predictably cautious regarding inflation and interest rate policy. Short-term yields pushed higher, but major US indices closed the session, and the week higher.

This week will be busy with some important economic data from the US and beyond. Investors will focus on US growth and jobs data, and euro-area’s CPI estimate.

In China, the week started upbeat after the government announced measures to boost appetite for Chinese equities. Beijing halved the stamp duty on stock trades, while Hong Kong said it plans a task force to boost liquidity. The CSI 300 rallied more than 2% and HSI jumped more than 1.5%. But gains remain.

Energy traders remain little impressed with China stimulus measures. The barrel of US crude trades around the $80pb level, yet the failure to break below a major Fibonacci support last week – major 38.2% Fibonacci retracement on the latest rally, keeps oil bulls timidly in charge of the market despite the weak China sentiment. Oil trading volumes show an unusual fall since July when compared to volumes traded in the past two years.

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BRICS – which includes the world’s major energy-hungry nations like China and India, invited five countries - which happen to be the world’s top oil producers Saudi Araba, Iran, UAE, Egypt and Argentina - to join the bloc. This is an important step towards weakening the petro-dollar, though there are some important geopolitical barriers before BRICS becomes a solidly united union to challenge the Western dominance.

In the markets, those who expected the US dollar to tumble because BRICS are enlarging their alliance with top oil producers were disappointed yesterday. The US dollar extended gains to the strongest levels since the beginning of summer, as traders positioned for a hawkish speech from the Federal Reserve despite two Fed members hinting that the end of the Fed tightening is certainly near.

All eyes are on the Federal Reserve (Fed) Chair Jerome Powell’s speech at the Jackson Hole meeting today. Any hint of a higher neutral rate could wreak havoc in bond markets.

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Nvidia announced STUNNING results when it released its Q2 earnings yesterday after the bell. The company reported $13.5bn sales last quarter and said that it expects $16bn sales for next quarter, up from $12.6bn forecast last quarter. Earnings jumped to $2.70 per share, versus $2.09 expected by analysts, and the most-loved chipmaker of the year approved $25bn in share buybacks. Shares rallied 10% in the afterhours.

Elsewhere, the morose PMI data from Europe and the US pushed yields lower yesterday and kept US crude below the $80pb level, even though the US inventories dived more than 6 mio barrels for the second consecutive week. Trend and momentum indicators remain comfortably negative, and the market conditions are far from the oversold territory, meaning that there is room for a deeper downside correction in oil prices.

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The market mood turned sour again, and the S&P500 fell after a short relief. S&P’s bank rating downgrades weighed on bank stocks.
Elsewhere, the rising rates and declining purchasing power finally start showing in some retailers’ quarterly announcements. Macy’s for example sank 14% yesterday as Dick’s Sporting Goods slumped more than 24% on ‘elevated inventory shrink – in particular theft. Both companies gave a morose outlook for consumer demand moving forward.

The US 2-year yield pushes higher above the 5% mark, while the 10-year yield struggles near 4.30%, where it sees decent resistance, as Chinese efforts to prop up the yuan also weighs on US Treasuries.

The dollar index remains bid above its 200-DMA, the EURUSD is on a decidedly bearish path. The USDJPY is steady a touch above the 145 mark, while Cable sees resistance at its 50-DMA, a touch below the 1.28 mark.

Today, all eyes are on Nvidia earnings due after the closing bell. Investors will focus on whether Nvidia’s Q2 sales meet the $11bn estimate. Anything less than absolutely fantastic could trigger a sharp downside correction in Nvidia’s stock price which rallied 345% since the October dip.

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