Posted at 04 September 2023 / Categories Market Roundups
Market Roundup
•German Jul Trade Balance 15.9B, 18.0B forecast, 18.8B previous
•German Jul Imports (MoM) 1.4%, 0.5% forecast, -3.4% previous
•German Jul Exports (MoM) -0.9%, -1.5% forecast, 0.1% previous
•Swiss GDP (QoQ) (Q2) 0.0%, 0.1% forecast, 0.3% previous
•Spanish Unemployment Change 24.8K, -21.3K forecast, -11.0K previous
Looking Ahead Economic Data(GMT)
•13:00 French 12-Month BTF Auction 3.631% previous
•13:00 French 3-Month BTF Auction 3.664% previous
•13:00 French 6-Month BTF Auction 3.671% previous
Looking Ahead Events And Other Releases(GMT)
•13:00 German Buba President Nagel Speaks
•13:30 ECB President Lagarde Speaks
•14:00 ECB's Panetta Speaks
•14:00 ECB's Lane Speaks
Currency Forecast
EUR/USD: The euro edged higher on Monday as dollar pulled back on prospects that the U.S. Federal Reserve would take a pause from interest rate hikes this year. Data on Friday showed U.S. job growth picked up in August, but the unemployment rate jumped to 3.8% and wage gains moderated, strengthening the case of an interest rate pause this month. According to the CME FedWatch tool, traders now see a 93% chance of the Fed leaving rates unchanged at its September meeting. The euro was up 0.2% at $1.0793, just off a 10-week low touched last week against the dollar. Immediate resistance can be seen at 1.0845(5DMA), an upside break can trigger rise towards 1.0864(38.2%fib).On the downside, immediate support is seen at 1.0773(23.6%fib), a break below could take the pair towards 1.0728(Lower BB).
GBP/USD: The pound rose on Monday, but remained in sight of August’s two-month lows, as traders continued to weigh up the outlook for sterling, which analysts think could be at risk for more weakness over the course of this month. Revised official data on Friday showed the UK economy surpassed its pre-COVID-19 size in the final quarter of 2021, a much earlier recovery from the pandemic than previously estimated and ahead of other big European countries. Money markets show traders believe the Bank of England has at least one, if not two, more rate hikes in the pipeline.The chances of a quarter-point rise when the BoE meets on Sept. 21 are nearly 90%, with another rate hike almost guaranteed in November. Sterling was last up 0.3% at $1.26265 on Monday.Immediate resistance can be seen at 1.2649(5DMA), an upside break can trigger rise towards 1.2670(23.6%fib).On the downside, immediate support is seen at 1.2580 (38.2%fib), a break below could take the pair towards 1.2543(Lower BB).
USD/CHF: The dollar edged lower against the Swiss franc on Monday as investors weighed U.S. jobs data that showed some signs of cooling, boosting bets the Federal Reserve could be at the end of its monetary tightening cycle. Data on Friday showed U.S. job growth picked up in August, but the unemployment rate jumped to 3.8%, while wage gains moderated. The economy created 110,000 fewer jobs than previously reported in June and July. A string of economic data highlighting moderating inflation as well as an easing labour market have added to the impression the U.S. economy is cooling without slowing sharply, reinforcing hopes that the economy is set for a soft landing.Immediate resistance can be seen at 0.8864 (23.6%fib), an upside break can trigger rise towards 0.8880(Higher BB).On the downside, immediate support is seen at 0.8822(5DMA), a break below could take the pair towards 0.8806(38.2%fib).
USD/JPY: The dollar strengthened against Japanese yen on Monday as traders kept an eye out for any signs of intervention to shore up the ailing currency. Japanese officials have rarely escalated verbal warnings since last month against speculators trying to sell off the yen. The weak yen has driven up import bills for fuel and foods, depriving households of purchasing power and prompting Prime Minister Fumio Kashia to scramble for measures to subsidise gasoline retail prices and to mitigate rises in utility bills. The BOJ remains an outlier among global central banks with its loose monetary policy, even as it slowly shifts away from yield curve control. Strong resistance can be seen at 146.64(23.6%fib) an upside break can trigger rise towards 147.17( Higher BB).On the downside, immediate support is seen 146.05 (5DMA), a break below could take the pair towards 145.30(38.2%fib).
Equities Recap
European shares hit three-week highs on Monday, as investors were optimistic that a slew of stimulus measures from China will support its slowing economy, while Novo Nordisk's shares hit a fresh record high.
At (GMT 12:30 ),UK's benchmark FTSE 100 was last trading up at 0.30 percent, Germany's Dax was up by 0.14 percent, France’s CAC was up by 0.20 percent.
Commodities Recap
Gold edged higher on Monday, buoyed by a slight pullback in the U.S. dollar as market participants grew more confident the Federal Reserve may have finished raising interest rates.
Spot gold rose 0.1% to $1,940.80 per ounce by 1200 GMT. U.S. gold futures for December delivery rose 0.03% to $1,967.50 per ounce.
Oil prices were stable on Monday amid expectations that major producers would keep supplies tight, as hopes grew for the Federal Reserve to leave interest rates unchanged to avoid dampening the U.S. economy.
Brent crude futures for November crept 5 cents higher to $88.60 a barrel by 1110 GMT. U.S. West Texas Intermediate crude (WTI) October futures rose 2 cents to $85.57 a barrel.