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The US dollar index bears are unable to change its decline! The Zero-axis curse has not been broken, and the technical warning of new decline space is early
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Hello everyone, today XM Foreign Exchange will bring you "[XM Group]: The short-selling US index will not change its decline! The zero-axis curse has not been broken, and the technical warning of new decline space is early." Hope it will be helpful to you! The original content is as follows:
Asian market market
On Thursday, data showed that both U.S. employment and inflation had cooled down, thus supporting the Fed's interest rate cut twice this year. As of now, the US dollar is priced at 98.05.
Trump and Putin will meet in Alaska, USA on August 15. Trump said that the Russian-Ukrainian peace agreement involves "territorial exchange". Zelensky refused to make territorial concessions, saying that he "attention and fully supported" the joint statement of European leaders on peace; it is reported that the White House is considering inviting Zelensky to Alaska to attend the meeting; US Vice President Vance said that efforts are being made to determine the date of Putin's meeting with Zelensky, but meeting the Russian-Ukrainian heads of state before the "Tep Conference" is not constructive.
Netanyahu said Israel had “no choice” to eouu.cnplete the mission and defeat Hamas. The next phase of Israeli military operations will focus on two locations that Hamas is still under control; the European member states of the Security Council strongly condemn the Israeli government's decision to further expand its military operations; Israel's hard-line Finance Minister Smotrich also criticized this, calling it a "stupid" eouu.cnpromise measure.
Trump plans to remove Billy Long from his position as director of the IRS, and Treasury Secretary Becente may be acting director; in addition, it is reported that E.J. Anthony, chief economist of the Heritage Foundation, a conservative think tank, is a popular candidate for director of the U.S. Bureau of Labor Statistics.
Federal Director Bowman: Support the interest rate cuts starting in September, and should cut three times this year. JPMorgan Chase cuts Fed this yearThe interest expectation is changed from one to three times.
U.S. Treasury Secretary Bescent: Trade issues are expected to be resolved before the end of October.
Source: India is willing to reduce oil imports from Russia as part of the tariff settlement; the Indian government denies reports of suspending negotiations with the U.S. defense procurement.
Trump said Armenia and Azerbaijan promised to stop fighting "forever". Azerbaijan and Armenia signed a draft agreement to promote the normalization of relations.
Iran vowed to block the "American Corridor" in the Caucasus region, which connects Türkiye and Azerbaijan through Armenia, and the United States has the right to develop.
According to US media: Nine members of Trump's cabinet will visit all over the United States in the next few weeks to promote the Big and U.S. Act.
Summary of institutional views
UBS: The RBA has a shallow easing cycle and tends to go long on the Australian dollar, with a target of...
We expect the RBA to cut interest rates by 25 basis points next week, which is consistent with the 24 basis points of the money market pricing. However, we expect policy statements and press conferences may continue the tough stance of RBA Chairman Brock's recent speech. In the future, we expect the RBA to cut interest rates again in November and to cut interest rates to 3.1% for the last time in February. Although overall and core inflation remained in the target range for two consecutive quarters, the first in more than a decade, our forecast for the last rate cut of 25 basis points in February is still at risk.
The reason is that key CPI eouu.cnponents such as housing costs and electricity are at an upward risk, while wages continue to strengthen and productivity continue to weaken. In addition, private demand is recovering against the backdrop of rising real household income and supply constraints, which together suggest that the easing cycle is relatively shallow. Therefore, we maintain the expectation that the Australian dollar will rise to 0.70 in 12 months, and we tend to go long at the current level or lower level, and at the same time, we tend to sell downside risk assets to earn returns.
UBS: Even if the CPI is "hot" next week, it is unlikely to dispel the September rate cut expectations
After news about tariffs and trade wars continues for weeks, a weak U.S. labor market report reminds people that economic data remains the main driver of financial markets, prompting the market to significantly reprice the Fed's rate cut expectations. Looking ahead, the focus will turn to July inflation data to be released next Tuesday. As tariff-related effects begin to emerge, the market expects inflation to rise. However, in recent months, the pressure of deflation has continued, resulting in several unexpected downturns in inflation.
In view of the unusually weak labor market reports, we believe that even if inflation exceeds expectations, it is unlikely to dispel market expectations of the Fed's interest rate cut in September. Conversely, if inflation falls below expectations, perhaps due to a potential deflation trend, the dollar may face additional pressure. Overall, we are still optimistic that the euro is currently close to 1.16 against the US dollar, which is considered to be the sell-off level.The US dollar, buying euro is attractive and sets its target price at the end of the year target of 1.21.
Citi: The US job market is still in a "low loss mode", but the unemployment rate is still at risk of rising in the next few months
It can be seen from the number of initial requests that the labor market is still in a low loss mode. The layoff rate remains low, with both the regular initial jobless claims and the federal initial jobless claims generally at low levels. If more people choose not to apply for unemployment benefits or are unaware of the option to apply for unemployment benefits, the number of initial unemployment benefits may underestimate the number of layoffs, but so far, the lower number of initial unemployment benefits matches the low layoff rates in JOLTS data. We believe that if the number of layoffs increases significantly, the number of initial jobless claims will also increase.
However, although the number of initial unemployment benefits is lower than the end of 2021, the number of renewed unemployment benefits is still at its highest level since the end of 2021. This reflects the obvious low hiring rates and downward trends in JOLTS data. Low hiring rates themselves could mean upward pressure on unemployment, as new entrants in the labor market have not been well absorbed, and this dynamic was reflected in the July employment report. While the reduction in labor supply caused by immigration policies may put pressure on unemployment rates, we believe labor demand is slowing at a faster pace, which means the risk of further increase in unemployment in the eouu.cning months.
Bank: The RBA will cut interest rates cautiously, reiterating the Australian and US target of 0.6X, and the stop loss is at...
We expect the RBA to cut interest rates by 25 basis points to 3.6% at next week's meeting, which is consistent with market expectations. Potential inflation rates in the 2%-3% range and a weak labor market show that a 25 basis point rate cut is possible, but rising private demand indicates a shallow easing cycle in the event of supply constraints. We expect economic growth forecasts to be slightly lowered while potential inflation will be raised, reflecting continued weak productivity. Statements and press conferences may indicate that the central bank is cautious and may suppress market expectations of a terminal interest rate of around 3% with a tough tone.
Specifically speaking, since last Friday's non-farm data, U.S. front-end interest rates have fallen, and we are vigilant about the cyclical drivers that may support the US dollar in the short term. However, in terms of interest rate spreads are the short-term driver of US dollar price movement, we believe there is a two-way risk. Given the differences between the Fed and the U.S. government’s expected policy rate path, Fed independence may be weakened, and the risk of the dollar’s downside is unlikely to weaken in the foreseeable future. In the G10, we are bearish on the US dollar's medium-term trend, and the Australian dollar is the bulls we are optimistic about. Next week's RBA resolution could bring further room for the Australian dollar. We continue to be long against the Australian dollar, with the entry price at 0.6546, reiterating the target position of 0.69 and the stop loss at 0.6350.
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