Market Roundup
•US MBA Purchase Index 131.8, 130.6 previous
•US Mortgage Market Index 226.9 ,225.8 previous
•US Mortgage Refinance Index 753.8, 754.4 previous
•US Crude Oil Inventories -0.846M,-2.700M forecast,-4.649M previous
•US EIA Refinery Crude Runs (WoW) 0.175M,0.222M previous
•US Crude Oil Imports 0.282M ,0.078M previous
•US Cushing Crude Oil Inventories -0.668M,-0.560M previous
•US Gasoline Inventories -2.203M,-1.600M forecast, -1.606M previous
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Foreign Bonds Buying 1,854.0B previous
• 23:50 Japan Foreign Investments in Japanese Stocks -47.9B previous
•01:00 New Zealand Aug ANZ Business Confidence 27.1 previous
•01:00 New Zealand Aug NBNZ Own Activity 16.3% previous
•01:30 Australia Building Capital Expenditure (MoM) (Q2) -0.9% previous
•01:30 Australia Plant/Machinery Capital Expenditure (QoQ) (Q2) 3.3% previous
•01:30 Australia Private New Capital Expenditure (QoQ) (Q2) 0.9%forecast, 1.0% previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
EUR/USD: The euro dipped against the dollar on as the euro came under selling pressure ahead of the Eurozone's August inflation data release later in the week. A crucial inflation report for the Eurozone is scheduled for Friday, with investors closely watching for insights on future monetary policy.The European Central Bank meets in two weeks to take a call on borrowing costs, and markets have fully priced in a 25-basis-point cut. The euro slid 0.5% to $1.1118, but was not far from a 13-month peak touched at the start of the week. Immediate resistance can be seen at 1.1165(Aug 22nd high), an upside break can trigger rise towards 1.1200(23.6%fib).On the downside, immediate support is seen at 1.1095(38.2%fib), a break below could take the pair towards 1.1009 (50%fib).
GBP/USD: The British pound retraced from two-year highs against the dollar as investors shifted their attention to the differing monetary policies of the United States and the United Kingdom. The Bank of England cut its main interest rate by 25 basis points to 5% in early August, with traders anticipating additional reductions totalling 41 basis points by the end of the year. In contrast, the Federal Reserve is expected to lower rates by 103 basis points over the remaining three policy meetings of the year, with market pricing also considering the possibility of a significant 50 basis point cut next month. The pound slipped 0.3% to $1.3218, retreating from its peak of $1.3269 on Tuesday, its highest level since March 22. Despite this dip, the pound is on track for a 3.2% gain in August, marking its largest monthly increase since November 2022.Immediate resistance can be seen at 1.3258(Daily high), an upside break can trigger rise towards 1.3297(23.6%fib).On the downside, immediate support is seen at 1.3156(38.2%fib), a break below could take the pair towards 1.30586(50%fib).
USD/CAD: The Canadian dollar weakened against the U.S. dollar on Wednesday as oil prices declined and investors reassessed recent gains that had pushed the currency to a five-month high . Canada's second-quarter GDP data, set to be released on Friday, is expected to show the economy growing at an annualized rate of 1.6%, falling short of the Bank of Canada's estimated potential growth rate of around 2.4%.If this outcome materializes, it could solidify expectations for another interest rate cut when the BoC announces its policy decision next Wednesday. The central bank has already implemented two rate cuts since June, bringing the benchmark rate down to 4.50%. The loonie was trading 0.3% lower at 1.3480 per U.S. dollar , after earlier touching its strongest since March 8 at 1.3438.Immediate resistance can be seen at 1.3495 (38.2 fib), an upside break can trigger rise towards 1.3536 (50 %fib).On the downside, immediate support is seen at 1.3437(23.6%fib), a break below could take the pair towards 1.3400 (Psychological level).
USD/JPY: The dollar rebounded against the yen on Wednesday as dollar rebounded ahead of key economic data that could determine the pace of the Federal Reserve's imminent easing cycle. A preliminary estimate for U.S. gross domestic product (GDP) for the second quarter is expected later this week, along with the core Personal Consumption Expenditures (PCE) index. Investors across the board expect the Fed to begin cutting interest rates next month following Chair Jerome Powell's dovish tilt last week, with the debate now centred on whether or not it will be a super-sized 50-basis point cut, or the standard 25-bp easing. Strong resistance can be seen at 145.00(Psychological level), an upside break can trigger rise towards 146.56(38.2 %fib). On the downside, immediate support is seen at 143.75(23.6 %fib), a break below could take the pair towards 142.28(Lower BB).
Equities Recap
The benchmark European stock index climbed to its highest level since July on Wednesday, driven by gains in insurance and chemical stocks, as investors anticipated closely-watched Nvidia results and key economic data.
UK's benchmark FTSE 100 closed down by 0.02 percent, Germany's Dax ended up by 0.54 percent, France’s CAC finished the day up by 0. 16 percent.
U.S. stocks declined on Wednesday as investors awaited Nvidia's quarterly report, the week's main event on Wall Street, which could either dampen or further ignite a rally fueled by optimism surrounding artificial intelligence.
Dow Jones closed down by 0.39 percent, S&P 500 ended down by 0.60 percent, Nasdaq finished the down by 1.14 percent.
Commodities Recap
Gold prices fell on Wednesday, pressured by a stronger U.S. dollar as investors looked to key inflation data from the world's largest economy for hints on the potential size of the Federal Reserve's interest rate cut in September.
Spot gold was down 0.8% at $2,505.03 an ounce by 01:41 p.m. ET (1741 GMT), having slipped as much as 1.1% earlier in the session. U.S. gold futures settled 0.6% lower at $2,537.80.
Oil prices declined by 1% on Wednesday, following a smaller-than-anticipated reduction in U.S. crude stockpiles and persistent concerns about Chinese demand. However, the losses were tempered by ongoing supply risks in the Middle East and Libya.
Brent crude futures settled down 90 cents, or 1.13%, at $78.65 a barrel. U.S. West Texas Intermediate crude futures fell $1.01, or 1.34%, to $74.52.
