Market Roundup
•US Sep Manufacturing PMI (Sep) 47.0,48.6 forecast, 47.9 previous
•US Sep S&P Global Composite PMI (Sep) 54.4,54.3 forecast, 54.6 previous
•US Sep Services PMI 55.4,55.3 forecast, 55.7 previous
Looking Ahead Economic Data(GMT)
• 00:30 Japan Manufacturing PMI (Sep) 49.9 forecast, 49.8 previous
• 00:30 Japan Services PMI (Sep) 53.7 previous
Looking Ahead Events And Other releases(GMT)
•04:30 Australia Sep RBA Interest Rate Decision 4.35% forecast, 4.35% previous
•04:30 Australia RBA Rate Statement previous
Currencies Summaries
EUR/USD: The euro fell against the dollar on Monday following disappointing business activity reports from the euro zone, contrasted with steady activity data from the U.S. This weak performance raised expectations for further interest rate cuts by the European Central Bank, with markets now pricing in about a 77% chance of at least a 25 basis point cut at the central bank's October meeting. According to a survey by S&P Global, euro zone business activity contracted significantly this month, with the services sector stagnating and a worsening decline in manufacturing. The downturn was widespread, with Germany seeing a more pronounced drop, while France slipped back into contraction after a temporary boost in August from the Olympic Games. Immediate resistance is noted at 1.1198 (23.6%fib), with a breakout potentially pushing the pair towards 1.1218 (Higher BB). On the downside, immediate support is at 1.1111 (38.2%fib), a drop below this level could lead the pair towards 1.1049(50%fib).
GBP/USD: Sterling dipped against the dollar on Monday as sterling attracted sellers after downbeat UK PMI data. British businesses experienced a growth slowdown this month, with concerns about potential tax increases, according to a survey. The findings also indicated easing price pressures, which might prompt the Bank of England to consider another interest rate cut. The preliminary UK S&P Global Composite Purchasing Managers' Index dropped to 52.9 from 53.8, falling short of all forecasts in a poll, yet remaining comfortably above the 50 mark that signifies growth over contraction. Immediate resistance can be seen at 1.3331(23.6%fib), an upside break can trigger rise towards 1.3361(Higher BB).On the downside, immediate support is seen at 1.3269(Daily low), a break below could take the pair towards 1.3196(38.2%fib%fib).
AUD/USD: The Australian dollar strengthened against the US dollar on Monday, driven by expectations of a hawkish interest rate decision from the Reserve Bank of Australia (RBA). The RBA is widely expected to maintain rates at 4.35% on Tuesday and push back against discussions of rate cuts this year. Following a strong jobs report, investors have reduced the likelihood of a rate cut in December to 64%, down from 75%. Additionally, inflation data for August is anticipated to show a return to the target band of 2%-3%, with economists forecasting a 2.7% annual increase, influenced by government electricity rebates. Immediate resistance can be seen at 0.6820(23.6%fib), an upside break can trigger rise towards 0.6847(Aug 27th high).On the downside, immediate support is seen at 0.6761(38.2%fib), a break below could take the pair towards 0.6707(50%fib).
USD/CAD: The Canadian dollar strengthened against the US dollar on Monday, supported by positive economic data that suggested a less dovish stance from the Bank of Canada. Retail sales rose by 0.9% in July, driven by higher sales at motor vehicle and parts dealers, with further growth expected in August. Crude oil prices experienced volatility, initially rising on Middle East tensions and optimism about US economic growth, but later declining due to disappointing eurozone business activity and signs of a weakening Chinese economy. Focus will be on the Fed's core personal consumption expenditures (PCE) inflation gauge and Canada’s GDP numbers for July, both due on Friday. Immediate resistance can be seen at 1.3567 (38.2%fib), an upside break can trigger rise towards 1.3626 (50%fib).On the downside, immediate support is seen at 1.3499(38.2%fib), a break below could take the pair towards 1.3465 (Lower BB).
USD/JPY: The dollar steadied against the yen on Monday after data showed U.S. business activity was steady in September . S&P Global said its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, was little changed at 54.4 this month compared to a final figure of 54.6 in August.The data comes after the Federal Reserve cut rates by an outsized 50 basis point cut last week, which several officials commented on Monday that the move was intended to sustain an emerging and healthy balance in the economy. The dollar index , which tracks its performance against a basket of currencies, including the yen and the euro, rose 0.05% to 100.83. Strong resistance can be seen at 144.63 (38.2%fib), an upside break can trigger rise towards 145.00 (psychological level). On the downside, immediate support is seen at 141.70(23.6%fib), a break below could take the pair towards 140.36(Lower BB).
Equities Recap
European shares closed higher on Monday, boosted by a weak business activity reading that reinforced expectations for further monetary policy easing by the European Central Bank this year. Rate-sensitive sectors like real estate and utilities saw notable gains.
UK's benchmark FTSE 100 closed up by 0.36 percent, Germany's Dax ended up by 0.68 percent, France’s CAC finished the day up by 0.10 percent.
U.S. stocks closed modestly higher on Monday as investors weighed the potential for a trend to emerge following the Federal Reserve’s recent rate cut.
Dow Jones closed up by 0.15% percent, S&P 500 closed up by 0.28% percent, Nasdaq settled up by 0.14% percent.
Commodities Recap
Oil prices closed lower on Monday, driven by concerns over demand following disappointing eurozone business activity and a weakening Chinese economy.
Brent crude futures for November settled 59 cents lower, or 0.8%, to $73.90 a barrel, while U.S. crude futures for November fell 63 cents, or 0.9%, to $70.37.
