Market Roundup
•Fed keeps rates steady
•Canada Jul Foreign Securities Purchases -8.52B,-13.52B previous
•US Aug Retail Sales (YoY) 2.57%,2.74% previous
•Canada Aug CPI (MoM) -0.1%,0.1%, 0.0% previous
•Canada Common CPI (YoY) 1.5%, 1.3% previous
•Canada Median CPI (YoY) 1.9%,1.9% previous
•Canada Trimmed CPI (YoY) 1.7%,1.7% previous
•Canada Jul Foreign Securities Purchases by Canadians 1.29B , 10.60B previous
•Canada Aug CPI (YoY) 0.4% forecast0.1%,0.1% previous
•US Aug Retail Sales Ex Gas/Autos (MoM) 0.7%,1.5% previous
•US Aug Retail Sales (MoM) 0.6%, 1.0% , 1.2% previous
•US Aug Core Retail Sales (MoM) 0.7%,0.9% forecast, 1.9% previous
•US Aug Retail Control (MoM) 0.5% forecast, 1.4% previous
•Canada Aug Core CPI (MoM) -0.1% previous
•US Sep NAHB Housing Market Index 83,78 forecast, 78 previous
• US Jul Retail Inventories Ex Auto 0.6%, 0.6% previous
• US Jul Business Inventories (MoM) 0.1%, 0.1% forecast, -1.1% previous
•US Crude Oil Inventories -4.389M,1.271M forecast, 2.032M previous
•US Fed Interest Rate Decision 0.25%, 0.25% forecast, 0.25% previous
Looking Ahead - Economic Data (GMT)
•22:45 New Zealand GDP Expenditure (QoQ) (Q2) -13.0% forecast, -1.3% previous
•22:45 New Zealand GDP (QoQ) (Q2) -12.8% forecast, -1.6% previous
•22:45 New Zealand GDP (YoY) (Q2) -13.3%,-0.2% previous
•22:45 New Zealand GDP Annual Average (Q2) -2.3% forecast, 1.5% previous
•23:50 Japan Foreign Bonds Buying 377.9B previous
•01:30 Japan Foreign Investments in Japanese Stocks 11.6B previous
•23:50 Australia Aug Participation Rate 64.7% forecast ,64.7% previous
•23:50 Australia Aug Employment Change -50.0K forecast, 114.7K previous
•23:50 Australia Aug Unemployment Rate 7.7% forecast, 7.5% previous
•23:50 Australia Aug Full Employment Change 43.5K previous
Looking Ahead - Events, Other Releases (GMT)
• 01:30 Australia RBA Bulletin
•02:30 Japan BoJ Interest Rate Decision -0.10% forecast, -0.10% previous
•04:30 Japan BoJ Monetary Policy Statement
Currencies Summaries
EUR/USD: The euro edged lower against dollar on Wednesday after the Federal Reserve kept interest rates pinned near zero and said it expects the U.S. economic recovery from the coronavirus crisis to accelerate with unemployment falling faster than the central bank expected in June. The U.S. central bank said it would keep rates at rock bottom levels until inflation is on track to moderately exceed” the U.S. central bank’s 2% inflation target for some time. The dollar index against a basket of currencies gained 0.07% to 93.19. The euro fell 0.41% to $1.1797.Immediate resistance can be seen at 1.1894(61.8%fib), an upside break can trigger rise towards 1.1967 (18th Aug high).On the downside, immediate support is seen at 1.1787 (Daily low ), a break below could take the pair towards 1.1730 (50%fib).
GBP/USD The British pound held within striking distance of a two-month low on Wednesday before a Bank of England decision on Thursday against the backdrop of a darkening outlook for the economy.BoE is widely expected to hold fire, policymakers are likely to conclude that downside risks to the economy are rising for the economy due to rising Brexit uncertainty and renewed restrictions on social activity. Sterling had its worst week in six months last week, as investors grew more pessimistic about the chances of a Brexit deal being reached before the December 2020 deadline. The pound was 0.1% lower at $1.2877, not far from a late July low of $1.2768 hit last week. Immediate resistance can be seen at 1.3013 (50%fib), an upside break can trigger rise towards 1.3027 (11DMA).On the downside, immediate support is seen at 1.2893 (38.2%fib), a break below could take the pair towards 1.2800 (Psychological level).
USD/CAD: The Canadian dollar rose to its strongest level in nearly one week against the greenback on Wednesday, before giving up some of its gains, bolstered by higher oil prices and the Federal Reserve's promise to keep interest rates pinned near zero. The Fed released new economic projections which showed interest rates on hold through at least 2023, with inflation never breaching 2% over that time. The Canadian dollar was trading 0.1% higher at 1.3169 to the greenback. The currency touched its strongest intraday level since last Thursday at 1.3123. Immediate resistance can be seen at 1.3215(50%fib), an upside break can trigger rise towards 1.3255 (Sep 9th high).On the downside, immediate support is seen at 1.3151(11 DMA), a break below could take the pair towards 1.3112 (38.2%fib).
USD/JPY: The dollar edged higher against Japanese yen on Wednesday after Fed fist interest rate decision since the central bank said that it would pursue average inflation targeting. New economic projections released with the Fed’s policy statement showed rates on hold through at least 2023, with inflation never breaching 2% over that time. Policymakers saw the economy shrinking 3.7% this year, far less steep than the 6.5% decline forecast in June. Unemployment, which registered 8.4% in August, was seen falling to 7.6% by the end of the year. On the data front, U.S. consumer spending slowed in August, with retail sales excluding automobiles, gasoline, building materials and food services sliding 0.1% after a downwardly revised 0.9% increase in July. Strong resistance can be seen at 105.19 (38.2%fib), an upside break can trigger rise towards 106.65 (5 DMA).On the downside, immediate support is seen at 104.77 (Daily low ), a break below could take the pair towards 103.69(23.6%fib).
Equities Recap
The Dow and S&P 500 added to gains on Wednesday after the U.S. Federal Reserve delivered a policy statement that bolstered expectations it will keep interest rates near zero for a prolonged period.
Dow Jones closed up by 0.13% percent, S&P 500 closed down by 0.46 % percent, Nasdaq settled down by 1.25% percent.
Treasuries Recap
Benchmark 10-year Treasuries dipped, pushing yields up to 0.69% from 0.67% the day before, while the S&P 500 lost 0.46%. 30-year Treasuries also dipped, with yields rising to 1.46% from 1.43% the day before.
Commodities Recap
Oil prices jumped more than 4% on Wednesday, following a drawdown in U.S. crude and gasoline inventories and as Hurricane Sally forced a swath of U.S. offshore production to shut.
Brent crude settled at $42.22 a barrel, up $1.69, or 4.2%. U.S. crude finished $1.88, or 4.9%.at $40.16 a barrel.
Gold prices edged higher on Wednesday after the Fed promised to keep rates on hold until inflation is on track to moderately exceed the U.S. central bank’s 2% inflation target “for some time.
U.S. gold futures settled up 0.2% at $1,970.50 an ounce. Spot gold prices rose 0.10% to $1,957.47 an ounce.
