Posted at 13 September 2023 / Categories Market Roundups
Market Roundup
• US Redbook (YoY) 4.6% ,4.1% previous
• US 10-Year Note Auction4.289%, 3.999% previous
• US API Weekly Crude Oil Stock 1.174M, -2.000M fofecast,5.521M previous
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Currency Summaries
EUR/USD: The euro strengthened on Tuesday as money markets slowly increased their bets on another rate hike by the European Central Bank, if not necessarily at its meeting this week.Investors are almost evenly split on whether the ECB will raise interest rates on Thursday, with euro short-term rate (ESTR) forwards pricing roughly a 50% chance of a 25 basis point (bps) hike, from around 40% the day before.Money markets are close to fully pricing in a 25 basis point ECB move by year-end, with no further tightening afterwards. The dollar index rose 0.15%, with the euro up 0.2% to $1.0759. Immediate resistance can be seen at 1.0799(14DMA), an upside break can trigger rise towards 1.0808(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 was little changed 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/CAD: The Canadian dollar strengthened against the greenback on Tuesday as surging oil prices boosted loonie while investors positioned for the U.S. inflation data on Wednesday. Oil prices rose to a near 10-month high, driven by a tighter supply outlook and a sunny global demand outlook from OPEC, extending the summer-long gains that have resulted in inflationary pressures. Investors are awaiting August consumer price index data due on Wednesday and producer prices reading scheduled for Thursday to gauge the outlook for U.S. interest rates ahead of the Fed's meeting on Sept. 20. Interest rate traders see a 93% chance of rates remaining at the current levels in September but just a 56% likelihood of a pause at the November meeting, according to the CME FedWatch Tool. Immediate resistance can be seen at 1.3599(5DMA), an upside break can trigger rise towards 1.3651(23.6%fib).On the downside, immediate support is seen at 1.3545 (38.2%fib), a break below could take the pair towards 1.3497 (Sep 1st low).
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 147.58(23.6%fib) an upside break can trigger rise towards 148.03 ( Higher BB).On the downside, immediate support is seen 146.76 (14DMA), a break below could take the pair towards 145.78(38.2%fib).
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.
UK's benchmark FTSE 100 closed up by 0.41 percent, Germany's Dax ended down by 0.54 percent, France’s CAC finished the day down by 0.35 percent.
Wall Street ends lower Wall Street stocks ended lower on Tuesday as Oracle shares tumbled more than 13% after a weak forecast and surging oil prices deepened worries about persistent price pressures ahead of crucial inflation readings this week.
Dow Jones ended down by 0.05 percent, S&P 500 ended down by 0.57 percent, Nasdaq ended down by 1.04 percent.
Treasuries Recap
U.S. Treasury yields were range-bound, with the two-year note inching above 5% in advance of the Labor Department's CPI report.
Benchmark 10-year notes last rose 4/32 in price to yield 4.2722%, from 4.288% late on Monday.
The 30-year bond last rose 15/32 in price to yield 4.3492%, from 4.377% late on Monday.
Commodities Recap
Oil prices jumped about 2% to a near 10-month high on Tuesday on a tighter supply outlook and OPEC optimism over the resilience of energy demand in major economies.
Brent futures rose $1.42 or 1.6%, to settle at $92.06 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.55, or 1.8%, to settle at $88.84.
Gold slipped to a more than two-week low on Tuesday as the dollar rebounded, while investors positioned for the U.S. inflation data on Wednesday.
Spot gold was down 0.5% at $1,912.39 per ounce by 1:50 p.m. EDT (1750 GMT), its lowest since Aug. 25. U.S. gold futures settled 0.6% lower at $1,935.10.