Gold, FTSE 100 Analysis: European open – 18th July 2023

Asian Indices:

• Australia’s ASX 200 index fell by -19.8 points (-0.27%) and currently trades at 7,278.70
• Japan’s Nikkei 225 index has risen by 69.66 points (0.22%) and currently trades at 32,461.24
• Hong Kong’s Hang Seng index has fallen by -382.41 points (-1.97%) and currently trades at 19,031.37
• China’s A50 Index has fallen by -44.57 points (-0.35%) and currently trades at 12,601.28

UK and Europe:

• UK’s FTSE 100 futures are currently down -0.5 points (-0.01%), the cash market is currently estimated to open at 7,405.92
• Euro STOXX 50 futures are currently up 5 points (0.11%), the cash market is currently estimated to open at 4,361.79
• Germany’s DAX futures are currently up 4 points (0.02%), the cash market is currently estimated to open at 16,072.65

US Futures:

• DJI futures are currently down -8 points (-0.02%)
• S&P 500 futures are currently down -2.75 points (-0.06%)
• Nasdaq 100 futures are currently down -19.75 points (-0.12%)

The RBA released their July monetary policy minutes which seemed to be a little more hawkish than some expected, given AUD rose to the occasion and the ASX 200 pulled back to a 2-day low. But even taking those moves into account, volatility has been very low and getting to levels we are usually accustomed to this time of year. Overnight ranges for FX majors are all below 50% of their 200-day averages and implied volatility for FX majors are between 56% – 82% of their 20-day MA’s which suggests we could be in for a slightly less exciting session. Unless we see some surprise numbers for US retail sales and Canada’s CPI data at 13:30 BST today.

As thing currently stand, the Fed are expected to hike in July but may need more convincing that there’ll be another hike in August. And whilst markets currently favour another 25bp hike for the BOC, they do not meet again until September which leaves a lot more room for the BOC to change their mind one way or another. And today’s CPI report for Canada could certainly move the dial for CAD traders if it comes in soft (or got) enough. US retail sales are expected to rise 0.5% m/m from 0.3% previously, and core retail sales is expected to rise to 0.3% from 0.1%. The BOC’s preferred inflation gauges are the Trimmed Mean and Median reads, with trimmed expected to soften to the relatively high level of 5% y/y (5.1% prior) and median at 3.7% (3.9% prior).