Posted at 12 September 2023 / Categories Market Roundups
Market Roundup
•German Aug WPI (MoM) 0.2%, -0.1% forecast, -0.2% previous
•UK Aug Claimant Count Change 0.9K, 17.1K forecast, 29.0K previous
•UK Jul Unemployment Rate 4.3%,4.3% forecast,4.2% previous
•UK Jul Average Earnings Index +Bonus 8.5%, 8.2% forecast, 8.2% previous
•UK Jul Employment Change 3M/3M (MoM) -207K, -185K forecast, -66K previous
•UK Jul Average Earnings ex Bonus 7.8%, 7.8% forecast, 7.8% previous
•German Sep ZEW Economic Sentiment -11.4, -15.0 forecast, -12.3 previous
•EU Sep ZEW Economic Sentiment -8.9, -6.2 forecast, -5.5 previous
•German Sep ZEW Current Conditions -79.4, -75.0 forecast, -71.3 previous
Looking Ahead Economic Data(GMT)
•12:55 US Redbook (YoY) 4.1% previous
•16:00 US WASDE Report previous
•16:00 US EIA Short-Term Energy Outlook
•17:00 US 10-Year Note Auction 3.999% previous
•18:00 US Aug Federal Budget Balance -221.0B previous
•20:30 US API Weekly Crude Oil Stock -2.000M forecast,-5.521M previous
Looking Ahead Events And Other Releases (GMT)
•No data ahead
Currency Forecast
EUR/USD: The euro dipped on Tuesday as dollar resumed its rise across the board after a blip a day earlier on the back of moves in Asian currencies. The week's two big macroeconomic events, U.S. CPI and the European Central Bank meeting are still to come however. Markets are expecting the U.S. figures, due on Wednesday, to show annualised core inflation falling to 4.3% in August though the headline number is seen ticking up to 3.6%. The European Central Bank meanwhile meets on Thursday. Markets think it is more likely the central bank will keep rates steady, than hike by 25 basis points, though the latter remains firmly on the table. Immediate resistance can be seen at 1.0744(5DMA), an upside break can trigger rise towards 1.0788(38.2%fib).On the downside, immediate support is seen at 1.0693(23.6%fib), a break below could take the pair towards 1.0672(Lower BB).
GBP/USD: The pound fell against dollar on Tuesday after a mixed UK labour market report that showed more signs of cooling in the three months to July, but wage growth continued to rise quickly, and above the rate of inflation. Average weekly earnings growth in the three months to July rose to 8.5% in annual terms, up from 8.4% a month earlier and marking a new high, excluding distortions during the COVID-19 pandemic, in records dating back more than 20 years, the Office for National Statistics (ONS) said. The jobless rate is already higher than the 4.1% the BoE had pencilled in for the third quarter as a whole, when it published its last set of forecasts in early August.Employment dropped by a greater-than-expected 207,000 in the three months to July. Immediate resistance can be seen at 1.2546(5DMA), an upside break can trigger rise towards 1.2588(38.2%fib).On the downside, immediate support is seen at 1.2455 (23.6%fib), a break below could take the pair towards 1.2426(Lower BB).
USD/CHF: The dollar strengthened against the Swiss franc on Tuesday as investors awaited U.S. inflation figures that could provide an updated view on interest rates after the Federal Reserve kept the door open to further policy tightening. Market activity is likely to be broadly subdued until U.S. Consumer Price Index (CPI) data is out on Wednesday, which could provide guidance on U.S. interest rates after a widely expected pause by the Fed next week. Markets are pricing-in a 93% chance of the Fed holding rates steady at the Sept. 19-20 policy meeting, but there’s a 42% chance of a hike in November, according to the CME FedWatch tool. Immediate resistance can be seen at 0.8936 (23.6%fib), an upside break can trigger rise towards 0.8955(Higher BB).On the downside, immediate support is seen at 0.8844(5DMA), a break below could take the pair towards 0.8865(38.2%fib).
USD/JPY: The dollar strengthened against Japanese yen on Tuesday as yen slipped after its biggest daily rise since mid-July the day before after comments from Japan's top central banker on a possible end to its negative interest rate policy reverberated throughout markets. Bank of Japan (BOJ) Governor Kazuo Ueda told a newspaper interview over the weekend the bank could get enough data by year-end to determine whether it can end negative rates, remarks that on Monday saw the yen clock its largest daily gain against the dollar since July 12. The yen has come under immense pressure against the dollar as a result of growing interest rate differentials with the United States, since the Federal Reserve began its aggressive rate-hike cycle last year while the BOJ remains a dovish outlier. Strong resistance can be seen at 146.82(9DMA) an upside break can trigger rise towards 147.43 ( 23.6%fib).On the downside, immediate support is seen 145.83 (38.2%fib), a break below could take the pair towards 145.00(Psychological level).
Equities Recap
European shares were flat on Tuesday as losses in technology stocks offset gains by healthcare companies, while Germany's biggest software maker SAP fell after U.S. peer Oracle's disappointing revenue forecast.
At (GMT 12:10 ),UK's benchmark FTSE 100 was last trading up at 0.46 percent, Germany's Dax was down by 0.40 percent, France’s CAC was down by 0.17 percent.
Commodities Recap
Gold prices slipped to a more than two-week low on Tuesday, weighed down by an uptick in the dollar ahead of widely watched U.S. inflation print that could provide more clarity on the Federal Reserve’s interest rate trajectory.
Spot gold was down 0.5% at $1,911.70 per ounce by 1133 GMT, its lowest since Aug. 25. U.S. gold futures dipped 0.6% to $1,934.90.
Oil prices rose about 1% on Tuesday, boosted by a tighter supply outlook, while investors awaited macroeconomic data that could indicate whether interest rates will rise further in the United States and Europe.
November Brent crude futures rose 67 cents, or 0.7%, to $91.31 a barrel at 0949 GMT, while U.S. West Texas Intermediate crude futures for October firmed by 76 cents, or 0.9%, to $88.05.