Wednesday,24 July 2024 16:48:22

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Wednesday,24 July 2024 at 15:47

The dollar fell to its lowest in more than two months against the yen on Wednesday as short-yen carry trades were unwound ahead of next week’s Bank of Japan meeting, with investors girding for a hawkish move to begin removing monetary stimulus.

The Fed holds its meeting the same days and, while few expect it to begin lowering rates this month, there is a good chance the messaging for a pivot in September will become stronger, given months of declining inflation and slower growth.

U.S. crude oil futures rebounded more than 1% on Wednesday, breaking a three-day losing streak as stockpiles fell, gasoline demand rose and wildfires in Canada raise the risk of supply disruptions.

U.S. crude stockpiles fell by 3.7 million barrels and gasoline inventories decline by 5.6 million barrels for the week ending July 19, according to the Energy Information Administration. Gasoline supplied to the market, a proxy for demand, increased by 673,000 barrels per day.

Gold prices rose on Wednesday as the dollar slipped with investors’ focus shifting to U.S. economic data due this week for fresh signals on the timing of the central bank’s interest rate cuts. “The main thing helping gold right now is market expectations that the Fed may actually decide to cut earlier than September,” said Chris Gaffney, president of world markets at EverBank.

“Also, India cutting the import taxes on gold and silver also helps as that’s going to increase demand,” Gaffney added.

In corporate news, Tesla stock fell as much as 9% in pre-market trade Wednesday following the softer-than-expected earnings report. In response to this news, analysts at Cantor Fitzgerald and New Street Research slashed their ratings on TSLA to Neutral, citing valuation and margin concerns.

Analysts at Cantor Fitzgerald downgraded Tesla (NASDAQ:TSLA) stock on near-term valuation concerns, “given the recent run-up in the share price.” At the same time, the financial services firm lifted its price target to $245 from $230.

They also raised their Tesla revenue estimate for the fiscal year 2024 (FY24) to $101.2 billion from the previous $100.6 billion, driven by an increased projection for energy storage and deployment.

Similarly, New Street Research analysts argue that "margins will take time to recover," hence the downgrade move.

Markets

market close

FTSE 100 8150 (-0.21%)

FTSE 250 20,984 (-0.51%)

DAX 18,367 (-1.03%)

16:37

Dow Jones 39,962 (-0.99%)

S&P 500 5,460 (-1.71%)

NASDAQ 17,522 (-2.63%)

Fixed Income

UK 10-YR YIELD 4.157

Exchange Rates

GBP/USD 1.2926

GBP/EUR 1.1904

Commodities

Gold $2,425 (+0.69%)

Brent $81.97 (+0.53%)

Important - No news or research item should be construed as a recommendation to trade. The inclusion of securities within this report does not necessarily imply their suitability for individual portfolios or situations in respect of which further advice should be sought. Information contained in this report has been compiled from sources believed to be reliable but is not warranted to be accurate or complete.