Posted at 03 October 2023 / Categories Market Roundups
Market Roundup
•Swiss Sep CPI (YoY) 1.7%,1.8% forecast,1.6% previous
•Swiss Sep CPI (MoM) -0.1%,0.0% forecast, 0.2% previous
•French Aug Government Budget Balance -187.9B forecast, -169.0B previous
•Spanish Unemployment Change 19.8K, -12.2K forecast,24.8K previous
•Spanish 12-Month Letras Auction 3.862% forecast, 3.670% previous
•Spanish 6-Month Letras Auction 3.823% forecast, 3.654% previous
Looking Ahead Economic Data (GMT)
•12:55 US Redbook (YoY) 3.8% previous
• 14:00 US Aug JOLTs Job Openings 8.800M forecast, 8.827M previous
• 14:00 US IBD/TIPP Economic Optimism 41.6 forecast, 43.2 previous
• 15:00 GlobalDairyTrade Price Index 4.6% previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro declined on Tuesday as dollar gained after Federal Reserve officials served a reminder that borrowing costs won't drop any time soon. The latest catalyst was two Fed officials saying on Monday monetary policy will need to stay restrictive for "some time" to bring inflation back down to the central bank's 2% target. Strong economic data on Monday boosted the dollar to 11-month highs and the 10-year Treasury yield to a fresh multi-year peak. Traders are attaching a 26% chance of another U.S. rate hike in November and a 45% chance of an increase by December, according to CME Group's FedWatch Tool. Immediate resistance can be seen at 1.0518 (5DMA), an upside break can trigger rise towards 1.0546(38.2%fib).On the downside, immediate support is seen at 1.0460 (23.6%fib), a break below could take the pair towards 1.0427(Lower BB).
GBP/USD: Sterling fell to a new 6-1/2-month low against the dollar on Tuesday on concerns about the economic outlook and expectations that the Bank of England might be done with rate hikes. The gloom around the U.K. economy cleared a bit last week, as growth for the year's first quarter was revised significantly upwards. Still, concerns about the state of the economy recently supported the pound selloff.Britain's economy displayed apparent recession signals a couple of weeks ago, a day after the Bank of England called to halt its long run of interest rate increases. Sterling hit $1.2061, its lowest level since mid-March, and was last down 0.1% at $1.2075. Immediate resistance can be seen at 1.2144(5DMA), an upside break can trigger rise towards 1.2177 (38.2%fib).On the downside, immediate support is seen at 1.2066 (23.6%fib), a break below could take the pair towards 1.2033(Lower BB).
USD/CHF: The U.S. dollar steadied against Swiss franc on Tuesday after Swiss inflation dipped and came in slightly below expectations. Switzerland’s inflation rate dipped slightly in September, the government said on Tuesday, the latest economy to show a slowdown in price rises as tighter monetary policy takes effect. The consumer price index decreased by 0.1% in September compared to the level recorded by the Federal Statistics Office for August and was 1.7% higher compared to September 2022. The dollar was up 0.5% against the Swiss franc at 0.9215 at a six month high, Immediate resistance can be seen at 0.9233 (23.6%fib), an upside break can trigger rise towards 0.9252(Higher BB).On the downside, immediate support is seen at 0.9182(5DMA ), a break below could take the pair towards 0.9140(38.2%fib).
USD/JPY: The dollar just shy of the 150 level on Tuesday as traders were cautions that Japanese authorities might intervene to prop up the currency. Japanese currency on the brink of weakening past the psychological 150 per dollar level, as surging U.S. Treasury yields kept the dollar firmly on the front foot. Japanese Finance Minister Shunichi Suzuki said on Tuesday authorities were watching the currency market closely and stood ready to respond, but also said any decision on currency market intervention would be based on volatility, not specific yen levels. Strong resistance can be seen at 149.89(23.6%fib) an upside break can trigger rise towards 150.09 (Higher BB).On the downside, immediate support is seen 149.04(5DMA), a break below could take the pair towards 148.18 (38.2%fib).
Equities Recap
European shares slipped lower on Tuesday, with gains in banks and insurers offsetting losses in rate-sensitive utilities as bets that U.S. interest rates would remain higher for longer boosted Treasury yields and the dollar.
At (GMT 12:13 ),UK's benchmark FTSE 100 was last trading down at 0.22 percent, Germany's Dax down by 0.83 percent, France’s CAC was down by 0.81 percent.
Commodities Recap
Gold extended losses on Tuesday, hitting a seven-month low as expectations around the Federal Reserve keeping interest rates high boosted the dollar and bond yields, while focus turned to U.S. job openings data due later in the day.
Spot gold was down 0.1% at $1,825.50 per ounce by 0944 GMT, dropping to its lowest since March 9. Bullion was down for a seventh consecutive session.U.S. gold futures shed 0.3% to $1,841.80.
Oil prices stabilised on Tuesday, after falling to a three-week low in the previous session, on a stronger U.S. dollar, a darkening global macroeconomic outlook and mixed supply signals.
Brent futures crept up 2 cents to $90.73 a barrel by 1006 GMT, while U.S. West Texas Intermediate crude (WTI) , edged 12 cents higher to $88.94 per barrel. Earlier in the session, prices fell by more than 1%.