Market Roundup
•New Zealand Current Account (YoY) (Q2) -27.76B, -27.62B previous
• New Zealand Current Account (QoQ) (Q2) -4.83B, -3.95B forecast, -4.36B previous
• New Zealand Current Account % of GDP (Q2) -6.70%, -6.80% previous
•Japan Core Machinery Orders (YoY) (Jul) 8.7%, -1.7% previous
• Japan Core Machinery Orders (MoM) (Jul) -0.1%, 0.4% forecast, 2.1% previous
• Japan Exports (YoY) (Aug) 5.6%, 10.0% forecast, 10.2% previous
• Japan Imports (YoY) (Aug) 2.3%, 13.4% forecast, 16.6% previous
• Japan Trade Balance (Aug) -695.3B, -1,380.0B forecast, -628.7B previous
Looking Ahead Economic Data (GMT)
•09:00 EUR Construction Output (MoM) (Jul) 1.75% previous
•09:00 EUR Core CPI (YoY) (Aug) 2.8% forecast, 2.9% previous
•09:00 EUR Core CPI (MoM) (Aug) 0.3% forecast, -0.2% previous
•09:00 EUR CPI (MoM) (Aug) 0.2% forecast, 0.0% previous
•09:00 EUR CPI (YoY) (Aug) 2.2% forecast, 2.6% previous
•09:00 EUR CPI ex Tobacco (MoM) (Aug) - 0.0% previous
•09:00 EUR CPI ex Tobacco (YoY) (Aug) - 2.5% previous
•09:00 EUR CPI, n.s.a (Aug) 126.74 forecast, 126.54 previous
•09:00 EUR HICP ex Energy & Food (YoY) (Aug) 2.8% forecast, 2.8% previous
•09:00 EUR HICP ex Energy and Food (MoM) (Aug) 0.3% forecast, -0.1% previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro climbed slightly against the dollar on Wednesday as investors adjusted their positions ahead of a crucial policy meeting anticipated to initiate a U.S. easing cycle. The Federal Reserve is expected to announce its first interest rate cut in over four years at 1800 GMT, with markets pricing in a 67% chance of a 50 basis point reduction. Overnight data revealed that U.S. retail sales unexpectedly increased by 0.1% in August, contrary to forecasts of a 0.2% decline, while the Atlanta Fed's GDPNow estimate was raised to 3% from 2.5%, potentially supporting a case for a smaller rate cut. Immediate resistance is noted at 1.1142 (23.6%fib), with a breakout potentially pushing the pair towards 1.1191 (Higher BB). On the downside, immediate support is at 1.1075 (Sep 16th low), a drop below this level could lead the pair towards 1.1000 (Psychological level).
GBP/USD: The British pound strengthened against the dollar on Wednesday as focus shifted to the Federal Reserve's highly anticipated monetary policy decision. Investors are eager to see if the Fed will opt for a 25 or 50 basis point rate cut at the conclusion of its meeting later today. Market expectations have shifted significantly, with a 65% chance now priced in for a 50 basis point reduction, compared to just 35% a week ago, according to the CME's FedWatch Tool. British inflation data is also set to be released today, while the Bank of England is expected to maintain rates at 5% on Thursday, with a 35% likelihood of a cut. Immediate resistance can be seen at 1.3220(23.6%fib), an upside break can trigger rise towards 1.3256(Higher BB).On the downside, immediate support is seen at 1.3121(38.2%fib), a break below could take the pair towards 1.3033(61.8%fib).
AUD/USD: The Australian dollar hovered around two week high on Wednesday as investors cautiously awaited for likely interest rate cut from the U.S. Federal Reserve. Anticipation of a half-point rate reduction by the U.S. Fed later in the day stood at 65%, substantially higher than 34% a week ago, according to CME FedWatch Tool.The Fed's decision will significantly impact Australia's interest rate trajectory. Markets currently see little chance of a cut in the 4.35% cash rate at the Reserve Bank of Australia's meeting next Tuesday. Immediate resistance can be seen at 0.6773 (23.6%fib), an upside break can trigger rise towards 0.6792 (Aug 27th high).On the downside, immediate support is seen at 0.6694 (50%fib), a break below could take the pair towards 0.6660 (Sep 6th low).
NZD/USD: The New Zealand dollar edged higher against the U.S. dollar on Wednesday as the US dollar retreated ahead of the Federal Reserve’s policy decision. The Federal Open Market Committee (FOMC) meeting, which concludes later on Wednesday, is expected to kick off a U.S. easing cycle that could spark volatility in currency pairs.On the data front, Consumer confidence in New Zealand improved in the third quarter .The Westpac-McDermott Miller consumer confidence index rose to 90.8 from 82.2 in the previous quarter. The kiwi dollar held steady at $0.6190, following a 0.7% rally in the previous session. Immediate resistance can be seen at 0.6203(38.2%fib), an upside break can trigger rise towards 0.6277(23.6%fib).On the downside, immediate support is seen at 0.6144(50%fib), a break below could take the pair towards 0.6121(Lower BB).
USD/JPY: The dollar dipped on Wednesday as investors prepared for the highly anticipated monetary policy decisions from both Japan and the US this week. The Federal Reserve is anticipated to announce its first interest rate cut in over four years at 18:00 GMT, with markets pricing in a two-thirds probability of a 50-basis-point reduction. The yen, up more than 12% since July, has been surging because the Bank of Japan - which sets policy on Friday - has been hiking rates at the same time as the Fed prepares to cut .Yen rose about 0.7% to 141.41 per dollar on Wednesday, recouping part of an overnight drop. Top of FormBottom of FormStrong resistance can be seen at 142.60 (38.2%fib), an upside break can trigger rise towards 143.00 (psychological level). On the downside, immediate support is seen at 140.22 (23.6%fib), a break below could take the pair towards 139.23(Lower BB).
Equities Recap
Japan's Nikkei share average rebounded on Wednesday, supported by a recovery among chip-related stocks, although moves were subdued ahead of the Federal Reserve's long-awaited monetary policy decision.
The Nikkei was up 0.7% at 36,461.44 by the midday break, after sliding in the previous two sessions , while the broader Topix rose 0.4% to 2,565.25.
Commodities Recap
Oil prices fell on Wednesday and were set to snap a two-session winning streak ahead of a likely interest rate cut by the U.S. Federal Reserve, as weak macroeconomic data weighed on demand despite the potential for more violence in the Middle East.
Brent crude futures for November were down 45 cents, or 0.6%, at $73.25 a barrel, as of 0458 GMT. U.S. crude futures for October slid 48 cents, or 0.7%, to $70.71 a barrel.
Gold prices remained steady on Wednesday as investors assessed the likelihood of a significant interest rate cut by the U.S. Federal Reserve later in the day.
Spot gold was little changed at $2,567.13 per ounce, as of 0508 GMT. Bullion rose to a record high of $2,589.59 on Monday.U.S. gold futures 1 rose 0.1% to $2,593.60.
