Market Roundup
•German Jul Factory Orders (MoM) -1.1%, -0.5% forecast, -0.4% previous
•German Aug IHS S&P Global Construction PMI 42.6 forecast, 43.7 previous
•UK Aug Construction PMI 49.2 , 48.0 forecast, 48.9 previous
Looking Ahead - Economic Data (GMT)
•13:45 US Aug S&P Global Composite PMI 45.0 forecast, 47.7 previous
•13:45 US Aug Services PMI 44.3 forecast, 47.3 previous
•14:00 US Aug ISM Non-Manufacturing PMI 55.1 forecast, 56.7 previous
• 14:00 US Aug CB Employment Trends Index 117.63 previous
•14:00 US Aug ISM Non-Manufacturing Business Activity 59.9 previous
•14:00 US Aug ISM Non-Manufacturing Prices 72.3 previous
•14:00 US Aug ISM Non-Manufacturing Employment 49.1 previous
•14:00 US Aug ISM Non-Manufacturing New Orders 59.9 previous
•15:00 GlobalDairyTrade Price Index -2.9% previous
•15:30 US 3-Month Bill Auction 2.880% previous
•15:30 US 6-Month Bill Auction 3.235% previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Fxbeat
EUR/USD: The euro dipped on Tuesday against dollar as expectations for a massive interest rate raise by the European Central Bank this week eased following media reports that policymakers are considering a smaller hike. Money markets are now pricing in a 67% chance of a 75 bps rate hike, down from almost 90% earlier on Tuesday.Markets also anticipate a further hike worth at least 50 bps at the ECB's October meeting as investors position for front-loaded rate increases before the economic outlook deteriorates further due to the energy shock. 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 a source familiar with the situation has told Reuters that 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. By 0811 GMT, the pound was up 0.38% at $1.1567. Immediate resistance can be seen at 1.1641(9DMA), an upside break can trigger rise towards 1.1674(38.2%fib).On the downside, immediate support is seen at 1.1502 (23.6%fib),a break below could take the pair towards 1.1391(Lower BB).
USD/CHF: The dollar strengthened against the Swiss franc on Tuesday as concerns about rapid interest rate hikes to tame inflation boosted dollar. Focus this week will be on the European Central Bank meeting on Thursday, where it is expected to deliver a 75 basis-point interest rate hike to tame surging prices.Traders also expect a big interest rate hike from the U.S. Federal Reserve at its Sept. 20-21 policy meeting.At 13:32 GMT, the dollar was 0.03 percent higher versus the Swiss franc at 0.9806 . Immediate resistance can be seen at 0.9833(23.6%fib), an upside break can trigger rise towards 0.9881 (Higher BB).On the downside, immediate support is seen at 0.9800(5DMA), a break below could take the pair towards 0.9752(38.2%fib)
USD/JPY: The dollar rose past symbolic 142 against yen on Tuesday as the gap between Japanese monetary policy and that elsewhere becomes ever more stark, weighing on the currency. Japanese Finance Minister Shunichi Suzuki on Tuesday reiterated that sharp yen moves were "undesirable" and that he was watching rising volatility in the exchange market with a great sense of urgency as the currency hit a fresh 24-year low. The dollar climbed 1.05% to 142.1 yen, the first time it has been at this level since August 1998. Strong resistance can be seen at 142.19(23.6%fib), an upside break can trigger rise towards 143.10(Higher BB).On the downside, immediate support is seen at 140.47(5DMA), a break below could take the pair towards 140.16(38.2%fib).
EquitiesRecap
European shares edged higher on Tuesday following a bleak start to the week on worries over a looming energy crisis and recession, while Credit Suisse Group rose after the Swiss bank agreed to sell its global trust business
At (GMT 12:19),UK's benchmark FTSE 100 was last trading up at 0.23% percent, Germany's Dax was up by 0.88 % percent, France’s CAC was up by 0.36% percent
Commodities Recap
Gold prices pared gains on Tuesday under pressure from concerns about rapid interest rate hikes to tame inflation and an overall stronger U.S. dollar.
Spot gold was up 0.1% at $1,712.09 per ounce as of 1018 GMT. Prices hit a one-week high, rising nearly 1%, earlier in the session.U.S. gold futures were little changed at $1,722.40.
Oil fell on Tuesday after a two-day rally as concern returned about weaker demand and the prospect of more interest rate hikes, trumping support from OPEC+'s first output target cut since 2020.
Brent crude was down $2.67, or 2.8%, to $93.07 at 1210 GMT. U.S. West Texas Intermediate (WTI) fell from Monday's trading to $86.61, down 26 cents from Friday's close.
