Wall Street is once again on the back foot. Market nervousness has reared its head again. US stocks rose at the opening, but did not fare as well later in the session. Nasdaq Composite ended the day down by 1.1%, the S&P500 lost 0.8%, and Dow Jones fell by 0.6%. Long-term US Treasury yields also rose. In Europe, we observed increases, which could be explained by dovish comments from the Bank of Japan.
Yesterday, a statement from the Deputy Governor of the BoJ, Shinichi Uchida, circulated in the market, stating that the central bank would not continue to raise interest rates due to the unstable situation in the domestic and overseas financial markets. He added that unlike the interest rate cuts in Europe and the United States, the Japanese economy is not in a situation where further immediate tightening of monetary conditions is necessary. These comments injected a bit of optimism into the markets and resulted in the weakening of the Japanese currency. As a result of these words, the USD/JPY pair rose and approached the level of 148.00. In the following hours, however, a drop to the level of 146.00 was visible.
In the US debt market, a decrease in yields at the short end of the yield curve and an increase at the opposite end could be observed. Two-year bonds fell to 3.96% and 10-year treasury notes rose to 3.94%.
In the commodities market, there was a noticeable increase in the price of crude oil. Brent rose by 2.4% to $78.3. The reaction can be explained by the further escalation of tensions in the Middle East. Concerns about the US economy somewhat receded, which was the main reason for recent sharp declines.
Today, preliminary data on the number of new unemployment claims for the week of 3rd of August are scheduled, with the market consensus at 240 thousand compared to 249 thousand previously, and the final reading of wholesale inventories for June, with preliminary estimates at 0.2% m/m. The publication of US labor market data is gaining greater significance in the context of the recent weak NFP report.
On Wednesday, the USD/PLN rate rose slightly from 3.9450 to 3.96 and the euro-dollar rate was stable and hovered around 1.0920. This morning we can see a slight increase in the rate of the main currency pair, resulting in slightly lower USD/PLN levels. However, volatility is limited. It may appear around 14:30. Yesterday we saw a continuation of the moderate weakening of the zloty against the euro. The EUR/PLN rate moved in an upward trend, which began around mid-July. A level of 4.3260 was reached, the rate is currently around 4.32.
Łukasz Zembik, Oanda TMS Brokers
Source: https://ceo.com.pl/wall-street-w-odwrocie-nasdaq-spada-o-11-sp500-traci-08-dow-jones-06-66994
