Posted at 28 August 2023 / Categories Market Roundups
Market Roundup
•French 12-Month BTF Auction 3.631% , 3.639% previous
•French 3-Month BTF Auction 3.664%,3.684% previous
•French 6-Month BTF Auction 3.671%,3.658% previous
•US Aug Dallas Fed Mfg Business Index -17.2,-21.6 forecast, -20.0 previous
•US 3-Month Bill Auction 5.340%, 5.300% previous
•US 6-Month Bill Auction 5.350%, 5.295% previous
•US 2-Year Note Auction 5.024%,4.823% previous
•US 5-Year Note Auction 4.400%,4.170% previous
Looking Ahead Economic Data(GMT)
•23:00 Japan Jul Unemployment Rate 2.5% forecast,2.5% previous
•23:00 Japan Jul Jobs/applications ratio 1.30 forecast, 1.30 previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Summaries
EUR/USD: The euro edged higher on Monday as investors awaited data from the bloc and the U.S. later this week after central bankers in Jackson Hole did not provide additional cues about the direction of monetary policy. Remarks from ECB policymakers remain in focus, with Vice President Luis de Guindos and Isabel Schnabel a prominent policy hawk and the head of the ECB’s market operation - due to speak later this week, along with more Fed officials. Germany and Spain will release inflation data on Wednesday. France, Italy and the euro area’s aggregate numbers are due on Thursday. The euro, which has fallen 1.7% so far in August, rose 0.17% to $1.0824 . Immediate resistance can be seen at 1.0825(5DMA), an upside break can trigger rise towards 1.0841(38.2%fib).On the downside, immediate support is seen at 1.0762(23.6%fib), a break below could take the pair towards 1.0751(Lower BB).
GBP/USD: The British pound edged higher on Monday as U.S. Treasury yields slipped from early session high , providing a boost for the pound as above-target UK inflation and continued BoE hikes are likely to remain key supports amid the current high-for-longer Fed rate outlook.Fed Chair Jerome Powell's comments at Jackson Hole on Friday, while clearly hawkish in the near-term, have done relatively little to shift rate expectations. Going into Friday's speech U.S. front-end rate futures had priced no change in rates in September where they remained on Monday and a near coin-toss for a 25 bp hike in November, which is now at a 65% chance.In both instances the peak Fed rate is expected to top out near 5.5%, versus 5.83% in February 2024 for the UK.Immediate resistance can be seen at 1.2628(38.2%fib), an upside break can trigger rise towards 1.2643(5DMA).On the downside, immediate support is seen at 1.2566 (Lower BB), a break below could take the pair towards 1.2548(23.6%fib).
USD/CAD: The Canadian dollar was unchanged against the greenback on Monday as investors awaited key U.S. economic data this week for further guidance on Fed rate outlook. A barrage of high-profile economic data is expected, including the August employment report, PCE inflation, ISM PMI and the Commerce Department's second take on April-June GDP, all of which could provide insight regarding the Fed's next policy move. Markets anticipate an 80% chance of the Fed's standing pat next month, FedWatch tool showed, but the probability of a rate hike in November is now seen at roughly 56%.The loonie was trading is unchanged at C$1.3602 to the greenback, after trading in a range of 1.3571 to 1.3611. Immediate resistance can be seen at 1.3624 (23.6%fib), an upside break can trigger rise towards 1.3658(Higher BB).On the downside, immediate support is seen at 1.37559(5 DMA), a break below could take the pair towards 1.3509 (50%fib).
USD/JPY: The dollar briefly hit a nine-month high against the Japanese yen as investors waited on key data due later this week and kept an eye out for potential intervention to shore up the struggling Japanese currency. Traders are watching out for any signs of intervention in the currency market from Japanese authorities as the yen weakens.Bank of Japan Governor Kazuo Ueda said on Saturday that the bank will maintain the current approach to monetary policy, as underlying inflation in Japan remains "a bit below" its 2% target.The greenback has gained in recent weeks from expectations that the Fed will hold rates higher for longer as the economy remains resilient. The greenback hit 146.75 Japanese yen, the highest since Nov. 9, and last traded at 146.51, up 0.05% on the day. Strong resistance can be seen at 146.78(23.6%fib) an upside break can trigger rise towards 147.48(Higher BB).On the downside, immediate support is seen 145.82(5DMA), a break below could take the pair towards 144.81(38.2%fib).
Equities Recap
European stocks closed lower on Wednesday, extending recent losses, as global growth concerns, European shares advanced on Monday, with technology stocks leading gains following an upbeat close on Wall Street and a rise in China-exposed industrials after Beijing announced measures to aid its ailing stock market.
The UK's benchmark FTSE 100 closed up by 0.07 percent, Germany's Dax ended up by 1.03 percent, and France’s CAC finished the up by 1.32 percent.
Wall Street ended higher and U.S. Treasury yields retraced earlier gains on Monday, capping the first session of a week likely to be light in volume but heavy with economic data that could affect whether the Federal Reserve will take a rate-hike breather in September.
Dow Jones closed up by 0.62 percent, S&P 500 was up 0.63 percent, Nasdaq was up by 0.84 percent.
Treasuries Recap
U.S. Treasury yields were modestly lower on Monday, pulling back from their highs last week, as investors awaited key U.S. economic data, led by the non-farm payrolls report for August on Friday that should help determine the path of interest rates this year and next.
The two-year yield , which reflects interest rate expectations, was last down 1.7 basis points (bps) at 5.039%.
Commodities Recap
Gold prices edged higher on Monday, helped by a retreat in the dollar and bond yields, while investors awaited a slew of U.S. economic data this week for more clues on interest rate outlook.
Spot gold rose 0.3% to $1,919.41 per ounce by 1:45 p.m. EDT (1745 GMT). U.S. gold futures settled 0.4% higher at $1,946.80.
Oil rose on Monday after China took steps to bolster its flagging economy, though investors remained worried about the pace of growth as well as further U.S. interest rate hikes that could dampen demand.
Brent crude rose 65 cents, or 0.8%, to $85.13 a barrel by 1350 GMT, breaking above the $85 mark after failing to do so earlier in the session. U.S. West Texas Intermediate crude gained 45 cents, or 0.6%, to $80.28.