Market Roundup
• ECB’s growth, inflation forecasts to show slight changes- Bloomberg
• Canada Aug Housing Starts 262.4K, 220.0K forecast, 245.6K previous
• US Redbook (MoM) -1.0% ,5.8% previous
• US Redbook (YoY) 4.6% previous
• Brazilian Aug IPCA Inflation Index SA (MoM) 0.32%, 0.44% previous
• Brazilian CPI (MoM) 0.24%, 0.23%,0.36% previous
• Russia GDP Quarterly (YoY) (Q2) -8.0%, -8.5% forecast, 1.6% previous
• Canada BoC Interest Rate Decision 0.25%, 0.25% forecast, 0.25% previous
• US Jul JOLTs Job Openings 6.618M, 6.000M forecast,, 5.889M previous
Looking Ahead - Economic Data (GMT)
•22:45 New Zealand Aug Electronic Card Retail Sales (MoM) 1.1% previous
•22:45 New Zealand Aug Electronic Card Retail Sales (YoY) 11.4% previous
•23:50 Japan Jul Core Machinery Orders (MoM) 1.9% forecast, -7.6% previous
•23:50 Japan Core Machinery Orders (YoY) -18.3% forecast, -22.5% previous
•23:50 Japan Foreign Investments in Japanese Stocks-590.5B previous
•01:00 Australia MI Inflation Expectations 3.3% previous
Looking Ahead - Events, Other Releases (GMT)
•No significant events
Fxbeat
EUR/USD: The euro initially declined against dollar on Wednesday but recovered some lost ground as focus shifted to ECB meeting. While no change is expected to the bank’s policy, its forecasts and messaging around its willingness to deploy bond purchases will be closely watched. The ECB’s growth and inflation projections will only show slight changes compared with June forecasts. The euro was up 0.28% at $1.8105. Immediate resistance can be seen at 1.1810 (50%fib), an upside break can trigger rise towards 1.1843 (11 DMA).On the downside, immediate support is seen at 1.1754 (Daily low), a break below could take the pair towards 1.1732 (38.2% fib ).
GBP/USD: Sterling hit a six-week low below $1.29 on Wednesday before bouncing back above $1.30 as Britain unveiled draft legislation for post-Brexit life, stoking concern that trade talks with the European Union could be derailed. The text of the legislation - called the Internal Market Bill - acknowledged “inconsistency” with international law and prompted a rapid rebuke from the EU’s chief executive.It also raised the possibility of Britain exiting the EU single market in four months with no replacement trade agreement in place. Britain and the EU have until next month to agree a free trade deal. That would ease the worries of companies who fear disruption at the borders and of supply chains. Immediate resistance can be seen at 1.2950 (38.2%fib), an upside break can trigger rise towards 1.3045 (50% fib).On the downside, immediate support is seen at 1.2886 (Daily low), a break below could take the pair towards 1.2800 (Psychological level).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Wednesday as oil and stock prices rallied and the Bank of Canada stopped short of additional stimulus measures, with the loonie rebounding from a three-week low. The BoC held its key interest rate steady at 0.25% but left the door open on possible future changes to its bond-buying program. It said that the third-quarter rebound was looking to be faster than anticipated but the economy will continue to require extraordinary support as it moves to a recuperation phase. The Canadian dollar was trading 0.6% higher at 1.3153 to the greenback. Immediate resistance can be seen at 1.3257(Daily high), an upside break can trigger rise towards 1.3327 (50%fib).On the downside, immediate support is seen at 1.3114(38.2% fib), a break below could take the pair towards 1.3027 (Lower BB).
USD/JPY: The dollar declined against the Japanese yen on Wednesday as concerns over a delay in the development of a coronavirus vaccine drove investors toward the safe-haven yen. Global trials of AstraZeneca’s experimental COVID-19 vaccine were paused due to an unexplained illness in a study participant. The news had unnerved investors as they were hoping that the quick introduction of a vaccine would accelerate the recovery for global economies ravaged by the pandemic . Strong resistance can be seen at 106.43 (55DMA), an upside break can trigger rise towards 106.82 (50%fib).On the downside, immediate support is seen at 105.79 (Daily low), a break below could take the pair towards 105.54 (38.2%fib).
Equities Recap
European shares bounced back on Wednesday, on the eve of the European Central Bank’s policy meeting, as AstraZeneca reversed declines after a report that it may resume its COVID-19 vaccine trial next week.
UK's benchmark FTSE 100 closed up by 1.39percent, Germany's Dax ended down by 2.07 percent, France’s CAC finished the day up by 1.44 percent.
Wall Street’s main indexes jumped on Wednesday as investors took advantage of a three-day sell-off to buy cheaper technology-related stocks, a day after the Nasdaq confirmed correction territory.
Dow Jones closed up by 1.50% percent, S&P 500 closed up by 2.01% percent, Nasdaq settled up by 2.71% percent.
Treasuries Recap
U.S. Treasury yields rose on
Wednesday after the government sold $35 billion in 10-year notes to slightly soft demand, and ahead of a 30-year bond auction on Thursday.
The 10-year notes sold at a high yield of 0.704%, around on basis point higher than where the debt traded before the auction.
Commodities Recap
Gold prices rose to their highest level in nearly a week on Wednesday, as the dollar weakened and concerns over a delay in the development of a coronavirus vaccine drove investors toward the safe-haven metal.
Spot gold rose 0.7% to $1,945.20 per ounce by 2:00 pm EDT (1800 GMT), shaking off initial declines. U.S. gold futures settled up 0.6% at 1,954.90.
Oil futures on Wednesday clawed back some of the losses they sustained in the previous session, but a rebound in COVID-19 cases in some countries undermined hopes for a steady recovery in global demand.
Brent crude rose $1.01, or 2.5%, to settle at $40.79 a barrel. The benchmark dropped more than 5% on Tuesday to fall below $40 for the first time since June.
U.S. crude rose $1.29, or 3.5% to settle at $38.05 a barrel, having fallen nearly 8% in the previous session.
