Market Roundup
•New Zealand Performance of Services Index 45.5, 45.2 previous
• Switzerland CHF PPI (YoY) (Aug) -1.2% ,-1.7%
• Switzerland PPI (MoM) (Aug) 0.2%,0.1% forecast, 0.0% previous
Looking Ahead Economic Data (GMT)
• 08:00 Italian CPI (YoY) (Aug) 1.1% forecast, 1.3% previous
•08:00 Italian CPI (MoM) (Aug) 0.2% forecast, 0.4% previous
•08:00 Italian CPI Ex Tobacco (YoY) (Aug) 1.1% previous
•08:00 Italian HICP (MoM) (Aug) -0.1% forecast, -0.9% previous
•08:00 Italian HICP (YoY) (Aug) 1.3% forecast, 1.6% previous
•09:00 Italian Trade Balance (Jul) 4.450B forecast, 5.065B previous
•09:00 Italian Trade Balance EU (Jul) -1.05B previous
•09:00 EU Wages in Euro Zone (YoY) (Q2) 5.30% previous
•09:00 EU Labor Cost Index (YoY) (Q2) 5.10% previous
•09:00 EU Trade Balance (Jul) 14.9B 22.3B previous
Looking Ahead Events And Other Releases (GMT)
•08:10 ECB's De Guindos Speaks
•12:00 ECB's Lane Speaks
Currency Summaries
EUR/USD: The euro gained strengthed against the dollar on Monday, bolstered by a weakening dollar and expectations of a significant interest rate cut by the U.S. Federal Reserve later this week. Fed fund futures indicate a 59% probability of a 50-basis point cut at the September meeting, with traders anticipating a total of 125 basis points in rate cuts for 2024, according to CME FedWatch. Looking ahead, Eurozone data releases will include the final August HICP, flash September consumer confidence, and the German ZEW survey. Additionally, several European Central Bank officials, including President Lagarde, are scheduled to speak. Immediate resistance can be seen at 1.1111(32%fib), an upside break can trigger rise towards 1.1157(Sep 6th high).On the downside, immediate support is seen at 1.1044(Daily low), a break below could take the pair towards 1.0983 (50%fib).
GBP/USD: The pound strengthened against the dollar on Monday as the focus shifted to this week's UK inflation data and central bank meeting. The Bank of England is anticipated to keep rates unchanged at 5.00% on Thursday. Markets are pricing in a 69% chance of no change this month, with expectations for a 30 basis point cut in November and a 51 basis point cut by December. Attention will be on the monetary policy summary and the press conference. Additionally, UK CPI and PPI data will be released on Wednesday, potentially influencing expectations, while retail sales figures are due on Friday. Sterling edged higher by 0.23% to $1.3155, and briefly scaled $1.31625, a 10-day high. Immediate resistance can be seen at 1.3178(38.2%fib), an upside break can trigger rise towards 1.3223(Aug 29th high).On the downside, immediate support is seen at 1.3092(38.2%fib), a break below could take the pair towards 1.3052(61.8%fib).
AUD/USD: The Australian dollar steadied on Monday as dollar weakened ahead substantial interest rate cut by the U.S. Federal Reserve later this week. Odds are narrowing for the Federal Reserve to kick start its easing cycle with a 50 basis point cut on Wednesday, with a 59% probability priced in for such a move, after media reports revived the prospect of a more aggressive easing.Looking ahead ,Australia will release the jobs data for August on Thursday. The data series have been smashing expectations in recent months, and economists expect the labour market to have added another 30,000 jobs, with the unemployment rate holding steady at 4.2%.The Aussie held at $0.6725, having finished last week with a modest gain of 0.5%. Immediate resistance can be seen at 0.6739(38.2%fib), an upside break can trigger rise towards 0.6791(23.6%fib).On the downside, immediate support is seen at 0.6697(Daily low), a break below could take the pair towards 0.6671(38.2%fib).
USD/JPY: The dollar dipped to lowest level in a year against the yen on Monday in trading thinned by a holiday in Japan, as market participants increasingly expected an oversized rate cut by the Federal Reserve later this week. Market participants increasingly anticipate an aggressive rate cut by the Federal Reserve later this week. The Fed's meeting on September 17-18 is a key event in a busy week that also includes policy announcements from the Bank of England and the Bank of Japan on Thursday and Friday. Trading in Asia was subdued, with markets in Japan, China, and South Korea closed for holidays. The dollar was down 0.47% at 140.15 yen, drifting further from the 140.285 low it hit in late December 2023, reaching levels last seen in July 2023.Top of FormBottom of FormStrong resistance can be seen at 141.31(Daily high), an upside break can trigger rise towards 142.20(38.2%fib). On the downside, immediate support is seen at 140.00 (Psychological level), a break below could take the pair towards 139.66(Lower BB).
Equities Recap
Asian equities climbed on Monday in light holiday trading, with attention centered on this week's Federal Reserve policy meeting.
Commodities Recap
Oil prices edged up in early trade on Monday amid expectations of a U.S. interest rate cut this week, though gains were capped by weaker China data and persistent demand worries.
Brent crude futures for November were up 3 cents at $71.64 a barrel at 0402 GMT. U.S. crude futures for October were up 16 cents, or 0.2%, at $68.81 a barrel.
Gold prices surged to record highs on Monday, fueled by a weaker dollar and growing expectations of a significant interest rate cut by the U.S. Federal Reserve this week.
Spot gold was up 0.5% at $2,588.29 per ounce, as of 0551 GMT, after hitting an all-time high of $2,589.23 earlier in the session.U.S. gold futures edged 0.2% higher to $2,615.80.
