Open account
☰
Open account
✖

European Open Traders Bet on RBNZ Hike ISM Service PMI in Focus

Article By: ,  Market Analyst
August 4, 2021 1:38 AM

Asian Indices:

  • Australia's ASX 200 index rose by 20.7 points (0.28%) and currently trades at 7,495.20
  • Japan's Nikkei 225 index has fallen by -53.91 points (-0.2%) and currently trades at 37,589.59
  • Hong Kong's Hang Seng index has risen by 427.89 points (1.63%) and currently trades at 26,622.71

UK and Europe:

  • UK's FTSE 100 futures are currently up 12.5 points (0.18%), the cash market is currently estimated to open at 7,118.22
  • Euro STOXX 50 futures are currently up 9 points (0.22%), the cash market is currently estimated to open at 4,126.95
  • Germany's DAX futures are currently up 34 points (0.22%), the cash market is currently estimated to open at 15,589.08

US Futures:

  • DJI futures are currently up 278.24 points (0.8%)
  • S&P 500 futures are currently down -2.5 points (-0.02%)
  • Nasdaq 100 futures are currently down -4.75 points (-0.11%)


Learn how to trade indices


China service PMI softens the blow, ISM services up next

China’s service PMI expanded at a 2-month high of 54.90 in July, softening the blow from the underwhelming (and barely expansive) manufacturing print over the weekend. Yet with covid cases rising across cities in China and signs appearing that tourism is already under pressure, then there are no assurances that either the service or manufacturing PMI’s won’t be under water by the next report.

Share markets in Hong Kong and mainland China led gains with the Hang Seng rising 1.5% and CSI300 currently up 0.4%. The ASX 200 briefly touched a new record high before trading back below 7500. Japan’s share markets remained under pressure as the spread of the Delta variant prompted the head of the Medical Association to call for a nationwide state of emergency.

ISM services PMI is the main calendar event at 15:00 BST. Given the negative response from markets when manufacturing PMI disappointed, it would serve as a double blow to sentiment should the service also fall short of the 60.4 expected (and fall below the 60.1 prior).


FTSE 350: Market Internals


FTSE 350: 4091.24 (0.34%) 03 August 2021

  • 184 (52.42%) stocks advanced and 153 (43.59%) declined
  • 41 stocks rose to a new 52-week high, 1 fell to new lows
  • 76.07% of stocks closed above their 200-day average
  • 62.39% of stocks closed above their 50-day average
  • 25.93% of stocks closed above their 20-day average

Outperformers:

  • + 6.56%   -  Hiscox Ltd  (HSX.L) 
  • + 5.66%   -  Babcock International Group PLC  (BAB.L) 
  • + 5.64%   -  BP PLC  (BP.L) 

Underperformers:

  • -10.02%   -  Smiths Group PLC  (SMIN.L) 
  • -6.95%   -  Rotork PLC  (ROR.L) 
  • -3.77%   -  Flutter Entertainment PLC  (FLTRF.I) 


Forex:

The New Zealand dollar dominated the overnight session after a strong employment report brought forward expectation of rate hike from RBNZ, with some calls for them to rise to 1% (from 0.25%) by the year end. This currently puts them on track for the first central bank from a developed economy to raise rates – after already having halted their QE program.

The Kiwi dollar is up around 0.6% against the yen and 0.5% against USD, although NZD/USD appears to have less in the way of obvious resistance levels nearby.


NZD/USD made hard work of holding below 0.7000 throughout July before eventually finding its low at 0.6900. Whilst the 200-day eMA capped as resistance ahead of today’s employment report, it quickly turned it into support today and prices now trade above the 50-day eMA. Over the near-term we remain bullish above 0.7000 with 0.7100 in sight, although it’s possible prices may not re-test today’s low / 200-day eMA as Europe and US respond to the employment report.


Learn how to trade forex


Commodities:

The Thomson Reuters CRB commodity basket declined for a third day after reaching a fresh four-year high last week. We see this as a wobble in a strong trend as opposed to a reversal, and yesterday’s bullish hammer which closed above the 20-day eMA shows bearish momentum is already waning. We may be a little premature but we’re monitoring for signs that a higher low has formed. Oil prices will likely play a large part in this.

WTI has stabilised back above $70 although found resistance at its 50-day eMA. Whilst we remain uncertain the corrective low is in place, yesterday’s lower wick accounts for around half of yesterday’s range, so we may not be too far from one. Perhaps Friday’s NFP print could be the deciding factor on this.


Up Next (Times in BST)

You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.


How to trade with City Index

Follow these easy steps to start trading with City Index today:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

© City Index 2024