Skip to content

CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Elevated Treasury yields, weaker Wall Street handover kept wait-and-see in place: US Financial Sector, USD/SGD, USD/JPY

Despite a resilient start to the week, Wall Street did not manage to find much follow-through overnight, as elevated Treasury yields and the lack of further heavy-lifting by Nvidia kept a cautious tone in place.

Wall Street Source: Bloomberg

Market Recap

Despite a resilient start to the week, Wall Street did not manage to find much follow-through overnight (DJIA -0.51%; S&P 500 -0.28%; Nasdaq +0.06%), as elevated Treasury yields and the lack of further heavy-lifting by Nvidia (-2.8%) kept a cautious tone in place. The US two-year yields have edged above the 5% level, while the 10-year yields continue to consolidate around its 16-year high.

There was not much of a trigger for the calibration in yields yesterday, except for a caution from Richmond Fed President Thomas Barkin that the reacceleration in demand may make the case for further tightening. More broadly, it seems that the series of resilient US economic data are providing a reckoning for rates to be kept high for longer, with the US economic surprise index hovering at its highest level since March 2021.

The day ahead will leave a series of flash purchasing manager’s index (PMI) data in focus. Previous month’s readings have seen further weakening in global economic activities across the board, but expectations are for the US economy to hold up in July. Consensus are looking for the US flash PMI figures to stay largely unchanged from the previous month (52.0), with a more lukewarm outcome preferred by pointing to softer demand but also keep hopes of a soft landing in place.

Perhaps one to watch may be the Financial Select Sector SPDR Fund (XLF), in which recent S&P’s downgrade of five US regional banks has put the sector down by 0.9% overnight. That brought the XLF back towards a trendline support, which coincides with its Ichimoku cloud support zone on the daily chart. However, a break below its 200-day moving average (MA) overnight does not provide much conviction for the bulls, who now face the task of having to reclaim the MA line. Any break below the trendline support could place the 32.50 level on watch next.

Financial Select Sector SPDR Fund Source: IG charts

Asia Open

Asian stocks look set for a subdued open, with Nikkei +0.11%, ASX +0.47% and KOSPI -0.03% at the time of writing. Elevated US yields and the weaker handover from Wall Street may put on some wait-and-see in the region in the lead-up to Nvidia’s result release today, which may determine if the artificial intelligence (AI) hype and tech rally could find another round of invigoration. On another note, Chinese equities saw a late-afternoon bounce in yesterday’s trading session, with one to watch for any follow-through today.

The economic calendar today saw Australia’s flash composite PMI dipping further into contractionary territory (47.1 versus previous 48.2) on softer services activities, while a slightly firmer footing is found in Japan’s PMI data (52.6 versus previous 52.2). The day ahead will leave Singapore’s Consumer Price Index (CPI) data on the radar next.

Thus far, the series of policy tightening by the Monetary Authority of Singapore (MAS) has been working its way into economic conditions, with headline inflation receding from its earlier peak of 7.5% to the current 4.5%, while the core aspect softened below 5% for the second straight month. Expectations are for the moderating trend in inflation to continue, with headline inflation to further ease to 4.1% and core CPI to head below the 4% mark at 3.8% in July.

The USD/SGD continues to hover around its year-to-date high at the 1.360 level. Trading above its 200-day MA for the first time since November 2022 could still place buyers in control, while its weekly relative strength index (RSI) heads above the 50 level. Any softer read in Singapore’s inflation numbers could support the pair further, with any break above the 1.360 level potentially paving the way to retest the 1.376 level next.

USD/SGD Mini Source: IG charts

On the watchlist: USD/JPY attempting to defend 145.00 level

Despite a firmer US dollar overnight, the USD/JPY continues to face a near-term test of resistance at the 145.00-145.80 level, where an earlier yen-buying intervention by the Bank of Japan (BoJ) was executed in September 2022. Some signs of exhaustion are displayed for now, with lower highs in the daily RSI on recent tops, as sentiments are kept in check for fresh clues on the Federal Reserve (Fed)'s policy outlook ahead of the key Jackson Hole Symposium. The 145.00 level will have to see some defending from the bulls, failing which could call for a retest of the 141.80 level next, while the 146.25 level will be an immediate resistance to overcome.

USD/JPY Mini Source: IG charts

Tuesday: DJIA -0.51%; S&P 500 -0.28%; Nasdaq +0.06%, DAX +0.66%, FTSE +0.18%


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Act on stock opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.