Today, it is anticipated that trading will be relatively subdued as investors await the release of the US Consumer Price Index for July, scheduled for tomorrow. Economic indicators to be announced in the later overseas markets include the US MBA Mortgage Applications Index (07/29 – 08/04), Canada’s Housing Construction Permits (June), Brazil’s Retail Sales (June), and Mexico’s Consumer Price Index (CPI) for July. These indicators are likely to have minimal impact on the overall market. Especially during the European trading hours, no significant economic indicators are scheduled for release, leading to a lack of substantial market-moving catalysts.
China’s Consumer Price Index and Producer Price Index, released during the morning session in Tokyo, both showed negative year-on-year growth. While this was expected and therefore not shocking to the market, the content is considered negative for market sentiment. Presently, Hong Kong and Shanghai stocks are struggling with upside resistance. There is a possibility that this sentiment could carry over to the European and London markets.
The US MBA Mortgage Applications Index is released on a weekly basis. It has recently seen a consecutive two-week decline. The 30-year fixed mortgage rate, which serves as a reference for housing loan rates, has risen again to 6.93%. Given the current trend of rising US bond yields, it is likely that loan interest rates will continue to increase based on today’s announcement. This is a negative situation for the housing market.
There are not many significant speech events scheduled for today. Major financial authorities’ participation in speaking engagements is not planned. Aside from the announcement of the US Weekly Petroleum Inventory Statistics, it is also advisable to monitor the strength of the US 10-year bond auction ($38 billion).
Italian bank stocks are rebounding. The success of implementing a restriction that limits new bank taxation to no more than 0.1% of assets has resulted in a positive response, causing the EUR to rise as well.
Although there were expectations of more USD selling following the downgrade of ten small and medium-sized US banks yesterday, the current situation suggests that there hasn’t been a significant reaction.
Today, fluctuations in crude oil prices are likely due to the US Weekly Petroleum Inventory Statistics, and the Canadian Dollar (CAD), which has a high correlation, should be watched closely.