There was no major news coming out of the Fed chatter. Most of the focus was on interest rates, and stocks. Bitcoin fell toward technical support. Crude oil prices rebounded off of low levels and closed higher on the day, but down on the week.
On Friday, if you were to look at the price changes of the major currency pairs outside the JPY and CHF, they were all within 0.11% of the prior close.
Looking at the changes of the major currencies vs each other, the JPY was the strongest. The CHF was the weakest. The rest had small net gains or losses vs each other with up and down volatility.
For the trading week, the USD is closing mostly higher helped by rising yields and safe haven flows into the USD on the back of China concerns. The only currency, the greenback lost value against was versus the GBP. (a modest -0.34% decline). The weakest currency was the AUD and NZD as China weighed most on those currencies.
Below are the % change of the USD for the week vs the major currencies:
- EUR, +0.68%
- JPY, +0.26%
- GBP, -0.34%
- CHF, +0.66%
- CAD, +0.80%
- AUD+ 1.36%
- NZD, +0.95%
The USD also rose vs the offshore yuan with the USD rising:
- CNH, +0.65%
Looking at rates, yields were lower today after gains earlier this week:
- 2-year 4.942%, -1.8 basis points
- 5-year yield 4.385%, -5.4 basis points
- 10-year yield 4.252% -5.5 basis points
- 30-year yield 4.375% -3.7 basis points
For the trading week:
- The 2-year yield moved to a high of 5.024% at the weeks high, which was about 4 pips short of it 2023 high yield of 5.085%. The yield did come off high levels but is still closing higher by around 4.4 basis points
- The 10-year yield traded 2 new 2023 highs of 4.328%. That pretty much equaled the high price going back to October 2022 at 4.335%. The yield rose by 9.5 basis points this week
- The 30-year yield rose to a high of 4.426%. Like the 10 year that more or less equaled the October 2022 high at 4.423%. For the week, the 30-year yield rose 11.0 basis points
Looking around other markets today to wrap up the trading week:
- Crude rose $0.22 or 0.27% at $80.62. For the trading week crude oil fell -3.09% and broke a 7 week up streak
- Gold fell to the lowest level since March this week. For the day, it is down $0.61 or -0.03% at $1899. For the trading week, the price fell $-24.06 or -1.26%
- Silver is trading up 4.7 cents or 0.21% at $22.73. For the week, the price is up a modest 0.25% or 6.6 cents
- Bitcoin is trading at $26,168 after reaching a low of $25,601. For the trading week, the price is down 11% or $-3116
in the US stock market today, the Dow snapped a 3 day decline but the S&P and NASDAQ index fell for the 4th consecutive day. Both the S&P and the NASDAQ closed lower for the 3rd consecutive week:
- Dow Industrial Average rose 25.83 points or 0.07% at 34500.67. For the trading week, the index fell -2.21%
- S&P index fell -0.65 points or -0.01% at 4369.72. For the trading week, the price fell -2.11%.
- NASDAQ index fell -26.17 points or -0.20% at 13290.77. For the trading week, the price index fell -2.59%.
Next week the highlight will be the Jackson Hole Summit with Fed chair Powell speaking on Friday, August 25 at 10:05 AM ET. Last year’s 8-minute speech was short and quick and effective as he outlined the hawkish Fed policy that took rates from 2.5% to the current level of 5.5%. The dollar index moved higher and peaked on September 28, before starting its rotation back to the downside.
Other key data next week includes:
- Flash PMI data out of Europe and the UK on Wednesday
- Flash PMI data out of the US also on Wednesday
- Weekly unemployment claims on Thursday
- German LIFO business climate data on Friday
- Final University of Michigan consumer sentiment index on Friday
Also of note next week is Nvidia will announce their earnings on Wednesday after the close. Given its shocking announcement last quarter (rise of forward guidance revenues to $11 billion from $7 billion estimate), the market will be watching what they announce and project for this quarter and going forward.
Thank you for your support this week. Hope you have a good weekend.