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Market Roundup
• US Core Retail Sales (MoM) (Aug) 1.4%, 0.6% forecast, -0.2% previous
•US Retail Sales (MoM) (Aug) 1.2%, 0.8% forecast, -0.5% previous
•US Retail Control (MoM) (Aug) 1.4%, 0.4% forecast, -0.4% previous
•US Export Price Index (MoM) (Aug) 0.6%, 0.5% forecast, -1.4% previous
•US Import Price Index (MoM) (Aug) 0.7%, 0.4% forecast, -0.3% previous
•US Retail Sales Ex Gas/Autos (MoM) (Aug) 1.2%, -0.3% previous
•US Retail Sales (YoY) (Aug) 6.01%, 5.03% previous
•US Export Price Index (YoY) (Aug) 8.6%, 8.1% previous
•US Import Price Index (YoY) (Aug) 7.0%, 5.9% previous
•Canada Building Permits (MoM) (Jul) -17.3%, -4.7% forecast, 18.3% previous
•US Retail Inventories Ex Auto (Jul) 0.8%, 0.7% forecast, -0.4% previous
•US Business Inventories (MoM) (Jul) 0.8%, 0.6% forecast, 0.1% previous
•US NAHB Housing Market Index (Sep) 32, 34 forecast, 35 previous
•US Crude Oil Inventories -0.640M, -1.600M forecast, -0.391M previous
•US Fed Interest Rate Decision 4.00%, 4.00% forecast, 3.75% previous
Looking Ahead Economic Data (GMT)
• 23:50 Japan Foreign Bonds Buying 111.9B previous
• 23:50 Japan Foreign Investments in Japanese Stocks 690.0B previous
•01:30 Australia Reserve Assets Total (Aug) 1,17,358.0B previous
Looking Ahead Events And Other Releases (GMT)
• No Events Ahead
Currency Forecast
EUR/USD : The euro fell sharply against the dollar on Wednesday after the Federal Reserve raised interest rates and signalled further increases in borrowing costs in the coming months.
The Fed raised its benchmark rate to 3.75%-4.00%, with new Chair Kevin Warsh joining a unanimous decision. New projections showed 16 of 18 policymakers expect at least one more 25-basis-point hike by year-end, while two see rates remaining unchanged. Warsh apparently did not submit a rate projection again.The Fed’s latest policy statement and projections opened the door to tighter monetary policy through next year, with the policy rate seen rising to 4.00%-4.25% by year-end and remaining at that level through 2027. The euro was 0.3% lower at $1.1502.Immediate resistance can be seen at 1.1553(50%fib), an upside break can trigger rise towards 1.1604(SMA20).On the downside, immediate support is seen at 1.1448 (38.2%fib), a break below could take the pair towards 1.1328(23.6%fib).
GBP/USD: The British pound fell sharply against the dollar on Wednesday after the Federal Reserve raised interest rates and signalled further increases in borrowing costs in the coming months.New Fed Chair Kevin Warsh joined the unanimous decision, while new projections showed 16 of 18 policymakers expect at least one more 25-basis-point rate hike by year-end. Only two policymakers see rates remaining unchanged.Speaking in Washington after the decision, Warsh echoed the Fed’s policy statement, saying the central bank would remain focused on delivering price stability. Meanwhile, the Bank of England is expected to hold interest rates steady at Thursday’s meeting as markets assess still-elevated UK inflation. Immediate resistance can be seen at 1.3498(Daily high ), an upside break can trigger rise towards 1.3528(38.2%fib).On the downside, immediate support is seen at 1.3367(Lower BB), a break below could take the pair towards1.3315(61.8%fib).
USD/CAD: The Canadian dollar weakened to a six-week low against its U.S. counterpart on Wednesday as expectations grew for further Federal Reserve rate hikes after the U.S. central bank tightened policy for the first time in three years.The Fed raised its benchmark rate by 25 basis points to 3.75%-4.00% and signalled further increases, seeking a faster return of inflation to its 2% target.The Bank of Canada could also raise rates in coming months, with swap markets pricing further tightening. Minutes from its Sept. 2 meeting showed policymakers expected inflation to remain elevated in the near term.Oil prices, a key Canadian export, fell after reports that Saudi Arabia was offering additional crude cargoes via Oman, easing concerns over Middle East supply disruptions. U.S. crude settled 3.2% lower at $102.43 a barrel. Immediate resistance can be seen at 1.4011(Higher BB), an upside break can trigger rise towards 1.4056(38.2%fib).On the downside, immediate support is seen at 1.3912(50%fib), a break below could take the pair towards 1.3861(SMA 20).
USD /JPY : The U.S. dollar rose against the yen on Wednesday after the Federal Reserve raised interest rates and signalled further increases in borrowing costs in the coming months.The Fed raised its benchmark overnight rate by 25 basis points to 3.75%-4.00%, with Chair Kevin Warsh joining a unanimous decision.Speaking after the decision, Warsh echoed the Fed’s policy statement, saying policymakers would remain focused on delivering price stability.The Fed’s latest policy statement and projections signalled scope for tighter monetary policy through next year, with the policy rate seen rising to 4.00%-4.25% by year-end and remaining at that level through 2027. Immediate resistance can be seen at 156.32(50%fib), an upside break can trigger rise towards 157.07(SMA20).On the downside, immediate support is seen at 155.00(Psychological level) a break below could take the pair towards 153.27 (61.8%fib).
Equities Recap
European shares edged higher on Wednesday as easing oil prices lifted risk appetite after a three-month low.
UK's benchmark FTSE 100 closed up by 0.28 percent, Germany's Dax ended up 0.53%, France’s CAC finished the day up by 0.62 percent.
US stocks whipsawed lower on Wednesday after the Federal Reserve raised interest rates for the first time in more than three years, as it battled persistent inflation fueled by surging crude oil prices amid the U.S.-Israeli war with Iran.
Dow Jones closed down by 1.21 % percent, S&P 500 closed down by 0.44% percent, Nasdaq settled down by 0.01% percent.
Commodities Recap
Gold prices fell more than 1% as the Fed raised rates and signalled further hikes, lifting the dollar.
Spot gold was down 1.2% at $4,240.1 per ounce as of 3:10 p.m. ET (1910 GMT), after having climbed more than 1% to a session high of $4,365.57 earlier. U.S. gold futures for December delivery settled 1.3% higher at $4,387.50.
Oil prices fell as increased Saudi crude availability eased supply concerns, while weaker-than-expected U.S. inventory draws added downward pressure.
Brent crude futures fell $2.92, or 2.7%, to settle at $105.83 a barrel. U.S. West Texas Intermediate futures fell $3.40, or 3.2%, to close at $102.43.
