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Stocks saw strong gains while bonds declined, driven by positive GDP growth in Japan and the UK, along with solid US retail sales and initial jobless claims data, easing recent recession concerns. The S&P 500 rose 1.6%, while in Europe, the Euro Stoxx 50 and FTSE 100 increased by 1.7% and 0.8%, respectively. The yield on the US 10-year climbed 9 bps to 3.93%.
US retail sales surged in July by the most since early 2023, with the value of retail purchases, unadjusted for inflation, rising by 1%. However, US industrial production dropped by 0.6%, largely due to shutdowns in petrochemical industries caused by Hurricane Beryl. Strong retail sales and low jobless claims boosted expectations of a soft landing for the US economy.
Market has now reduced their expectations for a large Fed rate cut in September, now pricing in less than 30 bps of easing, and 92 bps of cuts in 2024. Federal Reserve Bank of St. Louis President Alberto Musalem indicated that the time to reduce interest rates is approaching.
The USD is sharply higher, in line with rising US Treasury yields.
Mid market rates.
| Currency Pair | Mid-market rate |
| AUD/USD | 0.6613 |
| AUD/NZD | 1.1054 |
| AUD/JPY | 98.63 |
| AUD/CNY | 4.7500 |
| AUD/EUR | 0.6025 |
| AUD/GBP | 0.5134 |
AUD/USD 24 Hour
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