Good morning, traders! We hope you're having a fantastic morning. Today's trading brief is here to provide you with valuable insights for your day trading activities.
First and foremost, we would like to extend our warm wishes to those celebrating the 4th of July in the United States. As it is a national holiday, we anticipate lighter trading activity, with many market participants taking time off. Nevertheless, there are still potential day trading opportunities worth considering.
1. **RBA Interest Rate Decision:** The Reserve Bank of Australia (RBA) holds the spotlight today, with economists leaning slightly toward a 25 basis point increase in the benchmark cash rate to 4.35%. Keep a close eye on the RBA's decision and subsequent market reactions, as they can significantly impact the Australian dollar (AUD) and related currency pairs.
2. **South Korean Inflation Data:** Despite the U.S. July 4th holiday potentially leading to lighter trading, it's important to pay attention to South Korean consumer price inflation for June. Unexpected developments can have an impact on the South Korean won (KRW) and currency pairs involving the KRW.
3. **Market Sentiment and Risk Appetite:** At the start of this new trading quarter, investors have demonstrated an aggressive appetite for risk. Throughout the day, monitor market sentiment for potential trading opportunities and stay alert to any shifts in risk appetite.
4. **High-Yield Bond Indexes and U.S. Yield Curve:** Keep a watchful eye on high-yield bond indexes, particularly U.S. junk bond prices, as they approach their highest levels in months. Additionally, note the inverted U.S. yield curve, which may signal an impending recession. Observe how these developments impact the U.S. dollar and other financial instruments.
5. **China's Trade Conflict:** Be on the lookout for any market fallout resulting from China's escalation of the technology trade conflict with the U.S. and its allies. China's restrictions on exports of gallium and germanium can impact related sectors and currencies.
6. **Global Stock Performance:** World stocks have been on the rise, with pan-Asian stocks (excluding Japan) experiencing their best day in a month. Staying updated on global stock performance can provide valuable insights into market trends and potential trading opportunities.
7. **Bitcoin Miners Selling Amid Price Rebound:** As the price of Bitcoin has been rising, keep an eye on the percentage of miner revenue sent to exchanges. This metric can indicate market dynamics and potential impacts on the cryptocurrency market.
8. **Oil Prices and OPEC+ Supply Cuts:** Assess the impact of recent supply cuts announced by OPEC+ members, including Saudi Arabia and Russia, on oil prices. Continuously monitor price movements and patterns, considering the ongoing efforts to stabilize oil markets.
While it's important to enjoy the holiday, it's equally crucial to stay informed about upcoming events and data releases, especially as we approach the end of the week. One key data point to watch out for is the Nonfarm Payrolls report, scheduled for release on Friday. This report provides valuable insights into the U.S. labour market and can significantly impact various financial instruments, including currencies, equities, and bonds.
The Nonfarm Payrolls data is closely monitored by traders and investors as it reflects the overall health of the U.S. economy. Positive employment data can boost market sentiment and potentially strengthen the U.S. dollar, while weaker-than-expected figures may lead to market volatility and impact risk appetite.
As trading volumes are expected to be lower today, it's crucial to stay updated on any relevant news and events that could affect the markets. Monitor geopolitical developments, trade tensions, central bank actions, and economic indicators from major economies. Although the trading environment may be quieter, unexpected developments or news releases can still create short-term market movements and present day trading opportunities.
Remember to practice proper risk management techniques, conduct thorough analysis, and adapt your strategies as needed. Enjoy the holiday and stay prepared for potential trading opportunities ahead.
Conduct thorough analysis, manage risks, and adapt your trading strategies to changing market conditions. Stay informed, monitor key events and indicators, and execute your trades with caution. Wishing you a successful day of trading!
Tuesday, July 4
- U.S. Markets Closed (Independence Day)
Wednesday, July 5
- Factory Orders (May)
- IBD/TIPP Economic Optimism Index (Jul)
- FOMC Meeting Minutes
Thursday, July 6
- Coca-Cola Europacific Partners (CCEP) and Levi Strauss & Co. (LEVI) report earnings
- U.S. Trade Balance (May)
- Challenger Job Cuts (Jun)
- ADP National Employment Report (Jun)
- Job Openings and Labour Turnover Survey (JOLTS) Report (May)
- S&P Global Composite PMI - Final Reading (Jun)
Friday, July 7
- U.S. Nonfarm Payrolls (Jun)
Overall, staying informed about global economic trends, geopolitical events, and market developments is crucial for making well-informed investment decisions. Monitoring key economic indicators, central bank actions, and geopolitical risks can help navigate the ever-changing landscape of the global economy and financial markets.