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America’s Roundup: Dollar resumes rally, Wall Street ends lower, Gold slips, Oil sinks as demand fears take steam out of OPEC-led rally-September 7th,2022

Market Roundup

• ISM services sector data beats estimates

• Dow down 0.55%, S&P 500 down 0.41%, Nasdaq down 0.74%

• US Aug S&P Global Composite PMI   44.6, 45.0 forecast, 47.7 previous

• US Aug Services PMI  43.7, 44.3 forecast, 47.3 previous

• US Aug ISM Non-Manufacturing PMI  56.9, 55.1 forecast, 56.7 previous

• US  Aug CB Employment Trends Index 119.06,  117.63 previous

• US Aug ISM Non-Manufacturing Business Activity 60.9, 59.9 previous

• US Aug ISM Non-Manufacturing Prices  71.5, 72.3 previous

• US Aug ISM Non-Manufacturing Employment 50.2,  49.1 previous

• US Aug ISM Non-Manufacturing New Orders  61.8, 59.9 previous

• GlobalDairyTrade Price Index 4.9%, -2.9% previous

• US  3-Month Bill Auction  2.965%, 2.880% previous

• US 6-Month Bill Auction 3.320%, 3.235% previous

Looking Ahead - Economic Data (GMT)

• 01:30 Australia GDP (YoY) (Q2) 3.5%, forecast, 3.3% previous

• 01:30 Australia GDP Chain Price Index (Q2) 4.9% previous

• 01:30 Australia GDP Capital Expenditure (Q2) 0.7% previous

• 01:30 Australia GDP (QoQ) (Q2) 1.0% forecast, 0.8% previous

• 03:00 China Aug Trade Balance (USD)  92.70B forecast, 101.26B previous

• 03:00 China Aug Imports (YoY) 1.1% forecast, 2.3% previous

• 05:00 Japan Jul Leading Index (MoM) -0.3% previous

• 05:00  Japan Jul Coincident Indicator (MoM)  3.7% previous

Looking Ahead - Economic events and other releases (GMT)

•03:00   Australia RBA Assist Gov Ellis Speaks

Currency Summaries

EUR/USD: The euro dipped against dollar on Tuesday after data showed the U.S. services industry picked up again in August. A survey from the Institute for Supply Management (ISM) showed the U.S. services industry picked up in August for the second straight month amid stronger order growth and employment, while supply bottlenecks and price pressures eased. The ISM non-manufacturing PMI edged up to a reading of 56.9 last month, beating economists' expectations. The dollar index rose 0.6%, while the euro was sliding again, having failed to get back above parity against the dollar. The euro was last down 0.27% to $0.9894. Immediate resistance can be seen at 0.9974(5DMA), an upside break can trigger rise towards 1.0049(38.2%fib).On the downside, immediate support is seen at 0.9892(23.6%fib), a break below could take the pair towards 0.9814(Lower BB).

GBP/USD: Sterling lifted on Tuesday as media reports offered new details on how incoming Prime Minister Liz Truss is planning to tackle Britain’s growing energy crisis. Household bills are due to jump by 80% in October, but   Truss is looking at freezing bills this winter, in a plan that could cost more than the COVID-19 furlough scheme.After winning a leadership race to take over from Boris Johnson, Truss must now tackle an economy heading for recession, soaring prices on fuel and consumer goods, and a currency that is among the world’s worst performing this year. Immediate resistance can be seen at 1.1533(5DMA), an upside break can trigger rise towards 1.1628(38.2%fib).On the downside, immediate support is seen at 1.1459(23.6%fib),a break below could take the pair towards 1.1377(Lower BB).

USD/CAD: The Canadian dollar was little changed against its broadly stronger U.S. counterpart on Tuesday as investors assessed encouraging U.S. services industry data and awaited a Bank of Canada policy announcement this week. Money markets expect the BoC to raise its policy rate by three-quarters of a percentage point on Wednesday to a level of 3.25% in an effort to cool inflation. Further hikes are then expected that would lift the policy rate to a peak between 3.75% and 4% next year. The Canadian dollar was nearly unchanged at 1.3154 to the greenback , after trading in a range of 1.3097 to 1.3170.Immediate resistance can be seen at 1.3170 (Higher BB), an upside break can trigger rise towards 1.3228 (Higher BB).On the downside, immediate support is seen at 1.3090 (38.2%fib), a break below could take the pair towards 1.3066 (14 DMA).

 USD/JPY: The dollar rose past symbolic 143 against yen on Tuesday after a report on the U.S. services industry in August reinforced the view that the United States was not in recession, while the euro and rate-sensitive Japanese yen tumbled further against the greenback. The surprise reading    in a   poll had forecast it would slip to 54.9  followed the ISM's manufacturing survey last week that showed U.S. factory activity grew steadily in August in contrast to other major economies. The yen weakened further, down 1.56% at 142.82 per dollar. The dollar is up 24% against the Japanese currency so far this year. Strong resistance can be seen at 143.46(23.6%fib), an upside break can trigger rise towards 144.00(Psychological level).On the downside, immediate support is seen at 142.68(Daily low), a break below could take the pair towards 141.36(38.2%fib).

Equities Recap

European shares ended higher in volatile trading on Tuesday following a bleak start to the week on worries over a looming energy crisis and recession, while Delivery Hero climbed to the top of the STOXX 600 index after a positive brokerage action.

 UK's benchmark FTSE 100 closed up by  0.09 percent, Germany's Dax ended down by 2.22 percent, France’s CAC finished the day down by 1.20 percent.                 

Wall Street's main indexes closed lower on Tuesday, the first session after the U.S. Labor Day holiday and summer vacations, as traders assessed fresh economic data in volatile trading.

Dow Jones closed down by 1.07 percent, S&P 500 closed down by 1.07 percent, Nasdaq settled down   by 1.31 percent.

Treasuries Recap

Benchmark U.S. Treasury yields rose on Tuesday to their highest levels since June on expectations that the Federal Reserve will keep hiking interest rates to battle soaring prices and as a slew of corporate debt supply weighed on the market.

Benchmark 10-year note yields   were last 3.336%, the highest since June 16. They have risen from a four-month low of 2.516% on Aug. 2, but are holding below the 11-year high of 3.498% reached on June 14.

Commodities Recap

Gold prices on Tuesday slipped from a one-week high hit earlier in the session as the dollar and Treasury yields climbed amid expectations for aggressive monetary policy tightening by major central banks.

Spot gold fell 0.6% to $1,699.70 per ounce by 3:02 p.m. ET (1902 GMT), after hitting its highest since Aug. 30 at $1,726.49 in the Asia trading session.U.S. gold futures settled down 0.6% at $1,712.9.

Oil prices fell on Tuesday as concern returned about the prospect of more interest rate hikes and COVID-19 lockdowns weakening fuel demand, reversing a two-day rally on OPEC+'s first output target cut since 2020.

Brent crude settled at $92.83 a barrel, losing $2.91, or 3%. U.S. West Texas Intermediate (WTI) fell from Monday's trading to settle at $86.88 a barrel, up 1 cent from Friday's close.

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