“While market pricing has shifted more toward another 75 bps hike in September, it is far from locked in and with CPI data set for release midweek, the yellow metal has been able to hold firm. Nonetheless, the post-FOMC short covering has likely run out of steam, particularly amid the stronger data and continued pushback against a pivot in Fedspeak.” 

“After briefly hitting CTA triggers to spark another round of short covering, the jobs report has quickly put a cap on the move and the buying flow has turned to modest selling.”

“Prop traders still hold a significant amount of long positions, and a continuation of strong economic data could be the catalyst needed to see an unwind. In this sense, we have yet to see capitulation in gold, suggesting the pain trade is still to the downside, and we expect the recent rally will ultimately fade.”

The EU August Sentix Investor Confidence printed at -25.2, worse than anticipated. Easing government bond yields and firmer equities weigh on the greenback. EUR/USD is neutral in the near term, although failure to regain 1.0200 skews the risk to the downside.

EUR/USD is little changed from Friday’s close as early spot gains above 1.02 in European trade were quickly erased. Economists at Scotiabank look for more range trading in the short run, with the EUR retaining a soft undertone.

EUR/JPY remains on recovery-mode and already flirts with the 138.00 area at the beginning of the week.

Considering the ongoing price action, further upside in the cross appears likely for the time being. That said, the next temporary target aligns at the 55-day SMAs, today at 139.54.

While above the 200-day SMA at 133.79, the outlook for the cross is expected to remain constructive.

USD/CAD witnesses fresh selling on Monday amid modest USD weakness. Retreating US bond yields, the risk-on impulse weighs on the safe-haven USD. Bearish oil prices could undermine the loonie and help limit any further losses.

Magic Empire takes investors for a wild ride on its first day of trading. MEGL was priced at $4 and sold 5 million shares. MEGL closed at $97 after trading up to $235.

Tesla stock falls 6% on Friday as rally starts to stall. TSLA stock is up 31% in the past month. Elon Musk said a recession is likely to last 18 months but be mild.

EUR/USD has traded fairly choppily this morning around the 1.02 level. Looking ahead, economists at Rabobank continue to see further downside potential for the EUR on a one to three-month view.

Magic Empire takes investors for a wild ride on its first day of trading. MEGL was priced at $4 and sold 5 million shares. MEGL closed at $97 after trading up to $235.

Tesla stock falls 6% on Friday as rally starts to stall. TSLA stock is up 31% in the past month. Elon Musk said a recession is likely to last 18 months but be mild.

“Our expectation for USD/IDR to dip below 55-day exponential moving average support last week was incorrect as it popped briefly to 14,900 before pulling back.”

“The outlook for this week is mixed and USD/IDR is likely to trade sideways, expected to be within a range of 14,825/14,990.”

"We are looking for core prices to have stayed strong on a m/m basis despite our expectation of slowing vs June."

"Apart from the inflation data, market participants are likely to focus on the preliminary release of the University of Michigan survey for August. We expect the recent improvement in gasoline and equity prices to lead to a new gain in sentiment."

"Separately, turning to Fedspeak, we look for Fed officials this week to double down on concerns about inflation and a tight labor market, and that they remain top of mind over those for growth."

“A move above 1.21 earlier today failed to trigger any follow-through buying. We believe GBP/USD is still on track to break below the July 29 low near 1.2065.”

“Despite the gloomy outlook, the Bank of England is set to continue tightening as inflation spirals ever higher.”

AMC stock closes up 19% on Friday amid heavy volatility. AMC Entertainment to introduce a preferred stock unit, ticker APE. Preferred stocks could be dilutive to shareholders but are for now being issued as a bonus.

"Markets are still digesting last week’s blockbuster jobs report.  Nearly a million jobs were added in the past two months, driving the unemployment down to a new cycle low of 3.5%.  More importantly, wages continue to grow nicely and should help support consumption.  While a strong labor market does not preclude  a recession, it does drive home the point that the Fed will have more confidence to continue tightening policy in order to bring inflation down. " 

Fed tightening expectations continue to adjust.  WIRP is now showing over 75% odds of a 75 bp hike at the September 20-21 FOMC meeting.  Looking ahead, the swaps market is now pricing in a 3.75% terminal rate vs. 3.5% at the start of last week."

" We think this is the correct read and if the market gives the Fed 75 bp next month, the Fed will take it.  However, the market is still pricing in a quick turnaround by the Fed to move into an easing cycle in H1 2023....

A spokesperson for the German government told reports on Monday that they have ruled out the approval of the shelved Nord Stream 2 gas pipeline, as reported by Reuters.

"We face difficult months ahead," the spokesperson added. "But it is clear that we stand firmly on the side of Ukraine and we stand behind the sanctions that we agreed together with the European Union and the international community."

AMC stock closes up 19% on Friday amid heavy volatility. AMC Entertainment to introduce a preferred stock unit, ticker APE. Preferred stocks could be dilutive to shareholders but are for now being issued as a bonus.

“We highlighted last Monday (01 Aug, spot at 4.4480) that USD/MYR ‘could drift lower but is unlikely to threaten the rising trend-line support at 4.4300’. USD/MYR dropped briefly to 4.4450 on Friday before rebounding. While USD/MYR extended its advance during Asian hours today, upward momentum is not strong.”

“That said, there is scope for USD/MYR to edge higher but for this week, a break of 4.4700 is unlikely (there is another resistance at 4.4650). Support is at 4.4450 followed by the rising trend-line support at 4.4350. The rising trendline support is unlikely to come under threat this week.”

EUR/USD regains marginal upside traction around 1.0200. EMU Sentix index improves a tad for the current month. Next risk event in the pair will be the release of the US CPI.

Palantir stock is set to report earnings on Monday before the market opens. PLTR is a former retail favourite but has slumped as the retail army suffers. Palantir could benefit from increased security spending, but stock compensation issues dog performance.

USD/JPY witnesses a modest pullback from over a one-week high touched earlier this Monday. Retreating US bond yields keep the USD bulls on the defensive and act as a headwind for the pair. The Fed-BoJ policy divergence should help limit the downside amid a bullish technical setup.

Palantir stock is set to report earnings on Monday before the market opens. PLTR is a former retail favourite but has slumped as the retail army suffers. Palantir could benefit from increased security spending, but stock compensation issues dog performance.

GBP/USD surrenders a major part of its intraday gains and turns neutral below the 1.2100 mark. The BoE’s bleak economic outlook continues to weigh on the GBP and act as a headwind for the pair. Investors now look forward to the US CPI and the UK GDP this week for a fresh directional impetus.