Daily Market Outlook, August 9, 2023

Daily Market Outlook, August 9, 2023Munnelly’s Market Commentary… Asian equity markets are predominantly trading lower against the backdrop of a flurry of earnings releases. Participants are also processing the latest inflation data from China, which presented a mixed picture by indicating consumer prices in deflationary territory for the first time in over two years.The Nikkei 225 index is experiencing uncertain trading as a result of an influx of corporate earnings releases. The index's most significant gainers and losers are influenced by corporate performance, including SoftBank, which finds itself closer to the bottom of the spectrum following an unexpected loss. Both the Hang Seng index and the Shanghai Composite index are subdued, with the markets reflecting on China's conflicting inflation data. The data revealed that the Consumer Price Index (CPI) year-on-year slipped into deflation territory. However, the drop in prices was narrower than anticipated, and monthly consumer prices unexpectedly increased. On the other hand, China's factory gate prices continued to decline at a more pronounced pace than forecast.The remainder of the day's data docket lacks noteworthy economic releases in the UK, US, or the Eurozone, and is devoid of any planned addresses from economic policymakers as the summer lull in activity takes hold.Therefore, while the calendar for today seems light, the market's focus will turn to tomorrow's release of US CPI inflation data. This marks the first of two US inflation reports to be disclosed prior to the next US monetary policy announcement, which holds paramount importance in determining the possibility of a Fed interest rate hike. Following closely, on Friday, there will be a consequential release of UK GDP data. Looking further ahead into the next week, an eventful calendar includes UK reports on inflation and the labour market, both of which will significantly influence the BoE's forthcoming rate decision.CFTC Data As Of 25-07-23USD spec net short pared in Jul 26-Jun 1 period, $IDX -0.72%EUR$ -0.58% in period specs -5,168 contracts, now short 172,062$JPY +1.75% in period, specs -1,464 contracts into strength now -79,216GBP$ -0.95% in period, specs -9,433 contracts, specs sell into dipAUD$ -2.61% in period spec -591; $CAD +0.82% specs +835- just noiseBTC -0.05% in period, specs +106 contracts now -539Prevailing theme was more-dovish c.bank guidance, USD firm amid high-for-longer vibe (Source: Reuters)FX Options Expiries For 10am New York Cut(1BLN+ represent larger expiries, more magnetic when trading within daily ATR)EUR/USD: 1.0890-1.0905 (2.3BL), 1.0930-40 (577M), 1.0980 (673M), 1.10 (251M)GBP/USD: 1.2600 (683M), 1.2650 (355M), 1.2800 (200M), 1.2825 (277M)AUD/USD: 0.6500 (426M), 0.6620 (300M), 0.6640 (566M)NZD/USD: 0.6215 (339M).EUR/NOK: 11.20 (280M), 11.25 (248M), 11.40 (1.1BLN)USD/JPY: 142.00 (1.5BLN), 142.35-45 (1BLN), 142.75 (1.8BLN), 143.00 (2.2BLN)143.25 (325M), 144.50 (730M).USD/CAD: 1.3385 (655M)FX Options PositioningFX option implied volatility experienced a decrease due to anticipated reduced volatility in August, aligning with historical patterns. However, the USD saw a slight increase in value as the market approached Thursday's release of US Consumer Price Index (CPI) data, which prevented more significant drops for the time being. Traders displayed a tendency to purchase declines in AUD/USD implied volatility. This suggests that concerns are present regarding potential further declines in the currency pair towards the 2023 lows situated at 0.6459. These concerns emerged after the 0.6500 barrier options were erased on Tuesday. The EUR/USD currency pair finds itself confined within a range of 1.0900 to 1.1050, characterised by a region of long gamma. This situation serves to limit the movement of the spot rate while also influencing implied volatility. Despite testing the lower boundary of this range, the 1-month implied volatility has managed to hold its ground above the level of 6.5 for the time being.Overnight Newswire Updates of NoteChina Stocks Fall As Consumer Prices Drop For First Time In More Than 2 YearsChina Slides Into Deflation As Consumer, Factory Prices DropJapan’s Defense Ministry To Seek More Than JPY7 Tln BudgetItaly Backtracks With Cap On Windfall Tax After Bank Shares SlideNIESR: Risk Of UK Recession At Next General Election Is 60%US Set To Limit Scope Of China Investment Ban With Revenue RuleDollar Firm On Safe-Haven Demand As Markets Fret Over China, BanksOil Prices Slip As Bearish China Data Fuels Demand ConcernsNvidia Unveils Faster Chip Aimed At Cementing AI DominanceAmazon In Talks To Become Anchor Investor In Arm Ahead Of IPO(Sourced from Bloomberg, Reuters and other reliable financial news outlets)Technical & Trade ViewsSP500 Intraday Bullish Above Bearish Below 4520Below 4480 opens 4460Primary support is 4370Primary objective is 463020 Day VWAP bearish, 5 Day VWAP bullishEURUSD Intraday Bullish Above Bearsih Below 1.1020Below 1.890 opens 1.0830Primary support is 1.830Primary objective is 1.1320 Day VWAP bearish, 5 Day VWAP bullishGBPUSD: Intraday Bullish Above Bearish Below 1.28Below 1.2750 opens 1.2650Primary support  is 1.26Primary objective 1.385020 Day VWAP bearish, 5 Day VWAP bullishUSDJPY Bullish Above Bearish Below 139.60Above 143.50 opens 145Primary resistance 143.40Primary objective is 136.2020 Day VWAP bullish, 5 Day VWAP bearishAUDUSD Intraday Bullish Above Bearish Below .6660Above .6750 opens .6820Primary resistance  is .6730Primary objective is .646620 Day VWAP bearish, 5 Day VWAP bearsihBTCUSD Intraday Bullish Above Bearish below 30000Below 29400 opens 28300Primary support  is 28300Primary objective is 3275020 Day VWAP bearish, 5 Day VWAP bullish