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On August 3rd, the China Automobile Dealers Association (CADA) released its latest "Automobile Dealer Inventory Warning Index Survey," showing that the inventory warning index for July 2026 was 61.1%, a year-on-year increase of 3.9 percentage points and a month-on-month increase of 3.9 percentage points. The index remains above the boom-bust line. Dealers expect the car market to continue its weak off-season performance in August. High temperatures and sweltering heat in most parts of the country are suppressing offline customer traffic, and consumer hesitancy is not expected to improve significantly. However, the concentrated release of pent-up demand during the graduation and back-to-school season will have a certain stimulating effect on market demand, and sales are expected to be better than in July.On August 3rd, the highest 7-day annualized yield of Tencent Wealth Managements "Current Account +" was 1.4550%, and the lowest was 0.7350%. The highest 7-day annualized yield of WeChat Pays "Lingqian Tong" was 1.0090%, and the lowest was 0.9130%. The highest 7-day annualized yield of Alipays "Yuebao" was 1.0130%, and the lowest was 0.9030%.According to Futures News on August 3, as of 09:30 Beijing time, WTI crude oil futures fell 7.37%, while US natural gas futures rose 0.76%.On Monday, August 3, the Hong Kong Hang Seng Index opened 102.88 points higher, or 0.4%, at 25,987.31; the Hang Seng Tech Index opened 32.7 points higher, or 0.68%, at 4,861.92; the H-share Index opened 46.97 points higher, or 0.55%, at 8,659.12; and the Red Chip Index opened 3.68 points higher, or 0.09%, at 4,196.8.The Peoples Bank of China (PBOC) conducted 63 billion yuan of 7-day reverse repurchase operations today, with both the bid and winning bids amounting to 63 billion yuan. The interest rate for the operation was 1.40%.

Despite a reduction in oil prices, USD/CAD falls to 1.3550; US PCE inflation is forecast

Daniel Rogers

Oct 28, 2022 15:25

 截屏2022-10-28 上午10.30.48.png

 

During Friday's Asian session, the USD/CAD accepts bids to retest the intraday low near 1.3550, reversing the previous day's recovery from the monthly low.

 

Thus, the Loonie pair disregards the recent decline in Canada's key export item, WTI crude oil, as the US Dollar Index (DXY) consolidates its gains from the previous day in response to the recent decline in hawkish Fed wagers.

 

Despite this, the DXY dips to 110.50, following Thursday's recovery from the five-week low, as Fed hawks receive contradictory information regarding the overall strength of US data. In the third quarter, the Gross Domestic Product (GDP) of the United States climbed 2.6% on an annualized basis, exceeding estimates (Q3). Nevertheless, a fifth consecutive decline in private consumption presented a challenge to Fed hawks, as it demonstrated that policymakers are gradually approaching the target of slowing down private domestic demand. This may favor easy rate hike discussions for December at the Federal Open Market Committee (FOMC) meeting the following week.

 

Notable obstacles to the US dollar are the sluggish US Treasury yields and the mood of risk aversion. US 10-year Treasury rates reached a two-week low on Thursday and are heading for their first weekly loss in eleven weeks, which encouraged equities to enjoy a decent week despite the most recent decline in the statistics.

 

At home, the Bank of Canada's (BOC) 0.50 percent rate hike, as opposed to the 0.75 percent expected, joins the optimism of officials to keep USD/CAD bears upbeat.

 

The US Core PCE Price Index for September, which is expected to increase to 5.2% from 4.9% previously, will be crucial for the future direction of the USD/CAD pair. A better reading of the Fed's preferred inflation indicator might increase interest rates and hawkish Fed bets, which will benefit pair buyers.

 

In conjunction with the pair's prolonged trading below the 21-DMA barrier near 1.3700, bearish MACD signals encourage sellers. To imply more losses, however, a daily close below the support zone of 1.3505-3495 is required.


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