Posted at 13 September 2023 / Categories Market Roundups
Market Roundup
•US Aug CPI, n.s.a (MoM) 0.44%, 0.19% previous
•US Aug Real Earnings (MoM) -0.1%, 0.0% previous
•US Aug CPI Index, s.a 306.27, 304.35 previous
•US Aug Core CPI Index 309.66, 308.80 previous
•US Aug Core CPI (MoM) 0.3%,0.2% forecast, 0.2% previous
•US Aug CPI (YoY) 3.7% ,3.6% forecast, 3.2% previous
•US Aug CPI CPI Index, n.s.a. 307.03,306.98 forecast, 305.69 previous
•US Aug CPI (MoM) 0.6%, 0.6% forecast,0.2% previous
•US Aug Core CPI (YoY) 4.3%,4.3% forecast, 4.7% previous
•US Crude Oil Inventories 3.954M,-1.912M forecast, -6.307M previous
Looking Ahead Economic Data(GMT)
•01:00 Australia MI Inflation Expectations 4.9% previous
•01:00 Australia Aug Participation Rate 66.7% forecast, 66.7% previous
•01:00 Australia Aug Unemployment Rate 3.7% forecast, 3.7% previous
•01:00 Australia Aug Employment Change 24.3K forecast,-14.6K previous
•01:00 Australia Aug Full Employment Change -24.2K previous
•04:30 Japan Jul Capacity Utilization (MoM) 3.8% previous
•04:30 Japan Jul Industrial Production (MoM) -2.0% forecast, -2.0% previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Summaries
EUR/USD: The euro dipped on Wednesday as traders were cautious ahead of an expected European Central Bank rate hike on Thursday. The ECB has lifted its deposit rate to 3.75% from minus 0.50 in a span of 14 months, the fastest pace of tightening on record, all in the hope that it would arrest runaway price growth. The ECB begins a two-day meeting on Wednesday, with persistently high inflation and rising recession fears pulling policymakers in opposing directions and keeping market expectations equally divided between a pause and another 25-basis-point hike. Current market pricing reflects nearly a 75% chance the central bank will raise rates by 25 basis points, up from around 40% on Monday.Immediate resistance can be seen at 1.0750(5DMA), an upside break can trigger rise towards 1.0780(50%fib).On the downside, immediate support is seen at 1.0734(38.2%fib), a break below could take the pair towards 1.0682(23.6%fib).
GBP/USD: The pound edged lower against the dollar on Wednesday as investors assessed an unexpectedly poor reading that signalled British economic output had contracted more than expected in July. British economic output contracted by a larger-than-expected 0.5% in July from June, data showed, worse than what economists had forecast in a Reuters poll that pointed to a 0.2% contraction in gross domestic product (GDP). The data underlined signs that the economy is weakening, perhaps by more than the Bank of England (BoE) had expected ahead of its policy meeting on September 22, where the central bank is expected to raise interest rates by 25 basis points (bps) to 5.5%.Immediate resistance can be seen at 1.2522(5DMA), an upside break can trigger rise towards 1.2533(38.2%fib).On the downside, immediate support is seen at 1.2455 (23.6%fib), a break below could take the pair towards 1.2411(Lower BB).
USD/CAD: The Canadian dollar edged lower against its U.S. counterpart on Wednesday, pulling back from an earlier 12-day high, as oil prices dipped and investors assessed U.S. inflation data. U.S. consumer prices rose month-over-month at the fastest pace in 14 months in August, and while that was driven largely by volatile energy costs, a measure of underlying inflation also accelerated unexpectedly, keeping alive prospects of an additional interest rate hike by the Federal Reserve. Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to the signal that the Fed policy outlook sends about prospects for the global economy. The loonie was trading 0.1% lower at 1.3563 to the greenback.Immediate resistance can be seen at 1.3572(5DMA), an upside break can trigger rise towards 1.3600 (23.6% fib).On the downside, immediate support is seen at 1.3522(38.2% fib), a break below could take the pair towards 1.3450 (50% fib).
USD/JPY: The dollar strengthened against Japanese yen on Wednesday after US consumer prices data for August showed the biggest increase in more than a year, which could keep interest rates higher for longer and support the dollar. The U.S. consumer price index increased by 0.6% last month, the largest gain since June 2022, the Labor Department said on Wednesday. The CPI had risen by 0.2% for two straight months. Traders’ expectations for the Fed leaving interest rates remain unchanged at its Sept. 19-20 policy meeting only got stronger after the data, while pricing around a 44% chance of another hike before 2024, according to the CME FedWatch tool. Strong resistance can be seen at 147.81(23.66%fib) an upside break can trigger rise towards 148.43 ( Higher BB).On the downside, immediate support is seen 147.23 (5DMA), a break below could take the pair towards 146.4000(38.2%fib).
Equities Recap
European shares fell on Wednesday with investors bracing ECB’s rate decision on Thursday .
UK's benchmark FTSE 100 closed down by 0.02 percent, Germany's Dax ended down by 0.39 percent, France’s CAC finished the day down by 0.42 percent.
Wall Street closed mixed on Wednesday, and U.S. Treasuries oscillated within a tight range after data showed underlying inflation remained on its slow, downward trajectory, cementing the likelihood that the Federal Reserve will let interest rates stand for now.
Dow Jones ended down by 0.20 percent, S&P 500 ended up by 0.12 percent, Nasdaq ended up by 0.29 percent.
Commodities Recap
Gold inched lower on Wednesday due to a stronger dollar, although growing expectations that the Federal Reserve would leave interest rates unchanged at its policy meeting next week limited downside for the bullion.
Spot gold was down 0.2% at $1,909.83 per ounce at 1:51 p.m. EDT (1751 GMT), paring losses after a 0.4% drop following the release of August U.S. consumer price index (CPI) data.
U.S. gold futures settled 0.1% lower at $1,932.50 per ounce.
Oil prices edged lower on Wednesday, after earlier hitting a 10-month high, as a surprise build in U.S. crude inventories offset expectations of tight crude supply for the rest of the year.
International benchmark Brent futures dipped 18 cents to settle at $91.88 a barrel. Its session high of $92.84 a barrel was the highest since November.
U.S. West Texas Intermediate crude (WTI) dropped 32 cents lower to $88.52. Its session high of $89.64 a barrel was also the highest since November.