Daily Market Outlook, July 19, 2023

Daily Market Outlook, July 19, 2023Munnelly’s Market Commentary… Asian equity markets had a mixed performance as ongoing economic concerns in China partially offset positive sentiment from strong bank earnings in the US and dovish commentary from the European Central Bank. The Nikkei 225 outperformed, rising by 0.8% following comments from Bank of Japan Governor Ueda, suggesting that a policy tweak is unlikely at the upcoming monetary policy meeting. However, the Hang Seng and Shanghai Composite were lower, impacted by losses in the tech sector and a non-committal tone in the mainland amid ongoing economic challenges and recent support measures.In the UK, June's CPI inflation data came in lower than expected, marking the first downside surprise in five months. The annual headline rate fell to 7.9% from 8.7% in May, while the core rate of inflation unexpectedly dropped to 6.9% from 7.1%. The decline in overall inflation was primarily driven by lower petrol prices, as well as easing inflation in categories such as food, furniture and household goods, and hotels and restaurants. Despite the decline, UK inflation remains significantly higher than levels seen in the US and the Eurozone. Investor attention will be on Bank of England Deputy Governor Ramsden's speech later today, where he will discuss quantitative tightening (QT), the process of unwinding quantitative easing. Markets will be listening for any indications on the pace of reduction in the Bank's asset holdings in the coming months.In the Eurozone, investors will focus on the final reading of June's CPI is due, providing additional detail compared to the preliminary estimate. The flash estimate showed a decline in headline inflation to 5.5% from 6.1% in May, driven by lower energy and food prices. However, core inflation, excluding energy and food, increased to 5.4%, primarily led by a rebound in services prices. The elevated core inflation rates make it highly likely that the ECB will increase interest rates at the next policy update.Stateside, the housing sector has been impacted by higher interest rates, and today's housing starts and building permits data will provide insights into the sector's recent performance. Yesterday's retail sales report showed resilient consumer demand, and market participants will be interested to see if the housing data support that trend.CFTC Data As Of 14-07-23USD net spec short fell a touch in the Jul 5-11 period as $IDX slid 1.37%Fairly serious moves among majors w/hardly any position changesSuggest a fair amount of position replacement as specs were getting stoppedEUR$ +1.2% in period, specs -2,675 contracts into strength now +140,162$JPY -2.84% in period after breaching 145 last wk, specs buy 738 contractsGBP$ +1.73% as BoE seen a cointoss for +50bp Aug 3, specs +7,798 now +58,063CHF specs relatively active -4,503 contracts now short 7,907$CAD +0.06%, Aussie -0.06% specs sell less than 1k contractsBTC fell a scant 0.74%, specs +221 on dip now short 1,855 contracts(Source: Reuters)FX Options Expiries For 10am New York Cut (1BLN+ represent larger expiries, more magnetic when trading within daily ATR)EUR/USD: 1.1200 (565M), 1.1235 (251M), 1.1250 (1.6BLN), 1.1270-80 (513M)USD/CHF: 0.8550 (710M)GBP/USD: 1.2890 (232M), 1.3000 (346M), 1.3090-1.3100 (335M)AUD/USD: 0.6775 (200M), 0.6800 (200M). EUR/AUD: 1.6400 (1BLN)USD/CAD: 1.3065 (384M), 1.3115 (200M), 1.3180-90(283M), 1.3220-25 (369M)USD/JPY: 138.00 (687M)Overnight Newswire Updates of NoteAsia Stocks Split As US-China Outlooks DivergeNew Zealand Inflation Slows Less Than Forecast In Second QuarterChina’s Slowing Price Growth Doesn’t Mean Deflation – Eco. DailyChina Banks To Gradually Cut Mortgage Rate On PBoC Push – PaperAustralia Jobs Gauges, Pessimistic Households Signal RBA CautionTokyo Traders Eye Key CPI Data As They Mull Bets On BoJ TweaksJapan Companies Less Confident About Business ConditionsADB Trims 2024 Growth Outlook For Asia On Rate Hike EffectsFed's Last Rate Hike Coming At July Meeting, Economists Say – RTRS PollUK-Listed Company Profit Warnings Rise For Seventh Consecutive QuarterJPMorgan Says Market Fails To Reflect Threat To Dollar DominanceMizuho: BoJ Unlikely To Tweak Policy Amid Forward Guidance FocusChina Growth Risks Hurt Asia Stocks; Yen Lower WednesdayASML Reports Q2 Earnings Of 1.9 Billion Euros, Beating ExpectationsMicrosoft To Charge $30 Per Month For Generative AI FeaturesRio Tinto Warns On Global Slowdown Risks, Production Issues(Sourced from Bloomberg, Reuters and other reliable financial news outlets)Technical & Trade ViewsSP500 Intraday Bullish Above Bearish Below 4540Below 4520 opens 4460Primary support is 4370Primary objective is 463020 Day VWAP bullish, 5 Day VWAP bullishEURUSD Intraday Bullish Above Bearsih Below 1.12Below 1.1150 opens 1.1050Primary support is 1.10Primary objective is 1.1320 Day VWAP bullish, 5 Day VWAP bullishGBPUSD: Intraday Bullish Above Bearish Below 1.30 Below 1.2830 opens 1.2710Primary support  is 1.26Primary objective 1.385020 Day VWAP bullish, 5 Day VWAP bullishUSDJPY Bullish Above Bearish Below 139.60Above 139.60 opens 141.80Primary resistance 142Primary objective is 136.2020 Day VWAP bullish, 5 Day VWAP bearishAUDUSD Intraday Bullish Above Bearish Below .6800Below .6795 opens .6750Primary support  is .6448Primary objective is .700020 Day VWAP bearish, 5 Day VWAP bullishBTCUSD Intraday Bullish Above Bearish below 30000 Below 29400 opens 28600Primary support  is 28400Primary objective is 3275020 Day VWAP bullish, 5 Day VWAP bearish