July 2021 Macro Market Commentary

Bitcoin -

Bitcoin held the lower part of the range between $30,000 and $42,000 and traded towards $29,000 for the first three weeks of July setting an intra monthly low of $29,337 on 20th July. Price moved towards $40,000 in the final week of July.

  • Clients of large institutional wealth management banks continue to express interest in holding digital assets including Bank of America, which started allowing selected clients access to bitcoin futures. JPMorgan began giving its wealth management clients access to five cryptocurrency funds in July while Goldman Sachs’ recently surveyed family offices where more than half expressed interest in investing in crypto assets.
  • With increased attention being given to crypto assets, traditional hedge funds have acquired bitcoin for their portfolios such as GoldenTree Asset Management with $45 billion assets under management. Existing crypto hedge funds including Off The Chain Capital are opening their funds to new capital, as reported by The Street.

US Dollar -

The U.S. Dollar closed -0.3% in July at 92.11, cancelling the month's gains having reached a three month high of 93.20 on 21st July. The month started positive as speculators continued to back the dollar against currencies such as Euro and the Yen according to CFTC figures, a move strengthened by positive Nonfarm Payrolls, CPI and Retail Sales data.

  • Data published by the U.S. Bureau of Labor Statistics showed Nonfarm Payrolls rose by 850,000 in June helped the U.S. Dollar to extend its rally to a new three month high of 92.76 before falling.
  • The U.S. Federal Reserve announced no change in interest rates and remained cautious due to rising Covid cases. Further announcements on asset purchases are likely at the next Federal Open Market Committee (FOMC) in September. On this news the market struggled to break the previous day’s high of 92.84.

Singapore Dollar -

The Singapore Dollar closed the month at $1.3536 and ended slightly weaker against the U.S. Dollar after taking advantage of the U.S. Dollar decline from the highs against major currencies in the last week of July.

  • The Singapore Dollar took advantage of its safe haven status against other Southeast Asian currencies amid concerns over the prevalence of the Delta variant in the region and the impact this will have on economic growth. The Singapore Dollar closed at a key support and resistance area around 1.3525 - 1.3540.

Chinese Yuan -

The Chinese Yuan Renminbi closed at $6.4614 after the U.S. Dollar had the largest two-day drop in the past six months, ending the month almost where it began.

  • The People’s Bank of China (PBOC) lowered the Reserve Requirement Ratio (RRR) by 50 basis points creating short-term move up.
  • Concerns around domestic recovery saw the Interest Rate announcement by PBOC remain unchanged at 3.85%.
  • PBOC set the midpoint at 6.4602 yuan per U.S. Dollar on 30th July, the highest in a month as confidence was restored in the markets.

Asia Tech -

Technology stocks in Asia followed their Chinese counterparts lower in July after the Chinese government took action unfavorable to Chinese technology and education companies.

  • Didi Global Inc. the biggest ride-hailing company in China is the latest technology company to be reined in by Chinese regulators citing data security concerns around the massive amount of data generated as well as concerns over illegal drivers and vehicles. Didi’s share price reached $18.00 at its initial public offering debut on the New York Stock Exchange on 30th June and fell to a low of $7.17 on 26th July and closed the month at $10.30.

Oil -

Brent crude oil traded lower for the first three weeks of July after peaking at $76.80 and eventually recovered from the low set at $66.91 to end the month 1.9% higher versus June at $75.22.

  • Brent crude oil rose at the end of July on continued increase in demand expectations as tight supply remained given OPEC+ had not been able to reach an agreement on production levels in their July meeting and kept production levels in place for August. The latest agreement is for 400,000 barrels per day to increase in August after a compromise reached by Saudi Arabia and the United Arab Emirates.
  • The potential return of oil supplies from Iran is not expected any time soon as the nuclear deal with the United States remained unresolved with the sixth round of indirect talks between Tehran and Washington having adjourned on 20th June.

Key Figures -

Source: ICE Connect, ~30 Days

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TRADDICTIV · Research Team

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