Market Roundup
• US Export Price Index (MoM) (Aug) -0.7%, -0.1% forecast, 0.5% previous
• US Import Price Index (YoY) (Aug) 0.8%, 1.7% previous
• US Import Price Index (MoM) (Aug) -0.3%, -0.2% forecast, 0.1% previous
• Canada Capacity Utilization Rate (Q2) 79.1%, 78.8% forecast, 78.6% previous
• Canada Wholesale Sales (MoM) (Jul) 0.4%, -1.1% forecast, -0.6% previous
• US Michigan 1-Year Inflation Expectations (Sep) 2.7%, 2.8% forecast, 2.8% previous
• US Michigan 5-Year Inflation Expectations (Sep) 3.1%, 3.0% forecast, 3.0% previous
• US Michigan Consumer Expectations (Sep) 73.0, 71.0 forecast, 72.1 previous
• US Michigan Consumer Sentiment (Sep) 69.0, 68.3 forecast, 67.9 previous
• US Michigan Current Conditions (Sep) 62.9, 61.5 forecast, 61.3 previous
Looking Ahead Economic Data(GMT)
•No data
Looking Ahead Events And Other Releases(GMT)
• No Events Ahead
Currency Forecast
EUR/USD: The euro steadied against the dollar on Friday, supported by the European Central Bank's widely anticipated quarter-point rate cut on Thursday. The European Central Bank cut interest rates by 25 bps, but ECB President Christine Lagarde tempered expectations for another cut next month. The euro's gains pushed the dollar index 0.2% lower to 100.97. The dollar later trimmed losses after U.S. consumer sentiment improved in September, with the University of Michigan's preliminary index coming in at 69.0, up from 67.9 in August and exceeding the forecast of 68.5. The euro rose 0.2% versus the greenback to $1.1071 Immediate resistance can be seen at 1.1087(38.2%fib), an upside break can trigger rise towards 1.1170(23.6%fib).On the downside, immediate support is seen at 1.1017(38.2%fib), a break below could take the pair towards 1.0993 (Lower BB).
GBP/USD: The British pound gained slightly on Friday as the focus shifted to next week's UK inflation data and central bank meeting. The next key input for the BoE will be UK inflation data released on Wednesday, the day before its policy announcement.On Wednesday this week, data from Britain's Office for National Statistics showed the UK economy stagnated in July, sending the pound to its lowest since Aug. 20. A poll of economists had forecast a 0.2% month-on-month expansion.The Bank of England is widely expected to keep interest rates on hold next week, with futures markets implying around an 80% chance that rates remain unchanged, after a 25 basis-point rate cut last month.Immediate resistance can be seen at 1.3164(38.2%fib), an upside break can trigger rise towards 1.3262(23.6%fib).On the downside, immediate support is seen at 1.3086(38.2%fib), a break below could take the pair towards 1.3000(psychological level).
USD/CAD: The Canadian dollar edged lower against the U.S. dollar on Friday as investors increased bets on a significant interest rate cut by the Federal Reserve. This move could heighten speculation about the Bank of Canada potentially easing policy more aggressively. The Canadian central bank has cut three times since June, moving in quarter-point increments. Its benchmark rate is at 4.25%.Canadian consumer price index data for August, due on Tuesday, could also guide expectations for the pace of BoC rate cuts. Analysts forecast inflation slowing to an annual rate of 2.1% from 2.5% in July.Friday's domestic data was more upbeat than expected. It showed wholesale trade growing by 0.4% in July from June, compared with forecasts for a 1.1% decline. The loonie was trading 0.1% lower at 1.3595 per U.S. dollar .Immediate resistance can be seen at 1.3620 (50%fib), an upside break can trigger rise towards 1.3686 (61.8%fib).On the downside, immediate support is seen at 1.3560(38.2%fib), a break below could take the pair towards 1.3486(23.6%fib).
USD/JPY: The U.S. dollar fell on Friday to its lowest level since late December against the Japanese yen after media reports reignited discussions about a 50 basis-point rate cut at next week’s policy meeting. Reports from the Wall Street Journal and Financial Times on Thursday, suggesting a 50-bp rate cut is still an option, along with comments from a former Fed official advocating for a larger cut, shifted market expectations. The U.S. rate futures market now indicates a 45% chance of a 50-bp cut by the Fed at the end of the September meeting on WednesdayInvestors are also eyeing the Bank of Japan's interest rate decision next Friday, with expectations that rates will remain steady at 0.25%.The dollar fell 0.7% to 140.77 yen , after earlier dropping to 140.285, the lowest since late December. On the week, it fell 1%. Strong resistance can be seen at 142.44 (Sep 9th high), an upside break can trigger rise towards 143.00 (Psychological level). On the downside, immediate support is seen at 140.60(23.6%fib), a break below could take the pair towards 140.21 (Lower BB).
Equities Recap
European stocks ended the week on a high, buoyed by gains in technology, real estate, and mining sectors. Investors are now turning their attention to the U.S. Federal Reserve, anticipating a long-awaited monetary easing in its upcoming meeting.
UK's benchmark FTSE 100 closed up by 0.39 percent, Germany's Dax ended up by 0.98 percent, France’s CAC finished the day up by 0.41percent.
Wall Street's main indexes closed higher on Friday as investors honed in on the chance of a bigger interest rate cut by the Federal Reserve next week, with rate-sensitive small cap stocks outperforming.
Dow Jones closed up by 0.72% percent, S&P 500 closed up by 0.54% percent, Nasdaq settled up by 0.64% percent.
Commodities Recap
Gold prices surged to record highs on Friday, driven by optimism that the U.S. Federal Reserve might cut interest rates soon, alongside fund inflows and a weaker dollar.
Spot gold was trading at record levels, up 0.9% at $2,582.04 per ounce by 1:45 p.m ET (1745 GMT).U.S. gold futures settled 1.2% higher to $2,610.70.
Oil prices dropped on Friday as crude production in the U.S. Gulf of Mexico resumed after Hurricane Francine, and data showed an increase in the weekly U.S. rig count.
Brent crude futures settled at $71.61 a barrel, down 36 cents, or 0.5%. U.S. West Texas Intermediate crude (WTI) settled at $68.65 a barrel, down 32 cents, or 0.5%.
