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Market Roundup
• China CPI (MoM) (Aug) 0.4%, 0.3% forecast, -0.1% previous
•China PPI (YoY) (Aug) 3.8%, 3.6% forecast, 3.5% previous
•China CPI (YoY) (Aug) 0.8%, 0.8% forecast, 0.5% previous
Looking Ahead Economic Data (GMT)
•09:00 Greek HICP (YoY) (Aug) 2.7% previous
•09:00 Greek CPI (YoY) (Aug) 3.4% previous
•09:10 Italian 12-Month BOT Auction 2.768% previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD : The euro edged hgher against the U.S. dollar on Wednesday as investors positioned ahead of Thursday’s European Central Bank meeting. The ECB is widely expected to raise interest rates by 25 basis points to 2.50%, with policymakers leaning toward tighter policy as the prolonged U.S.-Iran conflict keeps energy prices elevated and inflationary pressures high.The ECB previously raised its deposit rate to 2.25% in June before pausing in July. The latest inflation data has strengthened the case for another hike, with eurozone inflation accelerating to 3.3% in August from 2.9% in July, while energy inflation surged to 14.3% from 10.3%.The key question for markets will be whether the ECB signals further tightening after September. While the September hike is fully priced, economists generally expect it to be the final increase, although some institutions now see another hike in December if energy-driven inflation persists.Immediate resistance can be seen at 1.1641(38.2%fib), an upside break can trigger rise towards 1.1677(Aug 28th high).On the downside, immediate support is seen at 1.1612(Daily low), a break below could take the pair towards 1.1585(38.2%fib).
GBP/USD: The British pound edged higher on Wednesday as dollar on the defensive as traders grappled with oil prices pushing towards $100 per barrel in the face of a widening war in the Middle East.Iranian-backed Houthis in Yemen launched strikes on several Saudi Arabian cities, further embroiling a U.S. ally in the conflict, while American forces hit multiple Iranian oil tankers and Tehran struck a U.S. base in Jordan.That sent Brent crude futures up more than 1% to $99 per barrel, casting a shadow over global markets ahead of a U.S. inflation report on Friday that will set the stage for central bank meetings next week in the U.S. and Japan. Immediate resistance can be seen at 1.3660(SMA 20 ), an upside break can trigger rise towards 1.3655(Higher BB).On the downside, immediate support is seen at 1.3535(38.2%fib), a break below could take the pair towards1.3462(Lower BB).
AUD/USD: The Australian dollar advanced on Wednesday as increasingly hawkish signals from the Reserve Bank continued to reinforce expectations for another rate hike this month.Markets are pricing a 72.9% probability of a 25-bps RBA rate hike in September, as persistent inflation pressures keep expectations for further policy tightening elevated.RBA Deputy Governor Andrew Hauser said the board will debate a September rate hike, with inflation remaining a key concern. He also highlighted risks from the Middle East conflict, supply constraints and a global AI-driven boom.Attention will shift to U.S. August PPI on Thursday and CPI on Friday, with markets watching closely for evidence that rising energy prices are feeding into inflation. Immediate resistance can be seen at 0.7250(Higher BB), an upside break can trigger rise towards 0.7276(23.6%fib).On the downside, immediate support is seen at 0.7217 (Daily low), a break below could take the pair towards 07168(38.2%fib)
USD /JPY :The U.S. dollar extended declined on Wednesday as the yen continued firm amid growing expectations that the Bank of Japan could accelerate the pace of policy tightening.The Bank of Japan is widely expected to raise its policy rate by 25 basis points to 1.25% from 1.0% at its September 17–18 meeting.The BOJ began its current tightening cycle in 2024 and has since then raised its policy rate by 25-bp increments at a pace of roughly twice a year.In the past, BOJ officials stressed the need to move cautiously to avoid cooling sentiment in an economy that had been mired in deflation for nearly three decades.In recent months, however, more acute price pressures arising from sharp yen declines have created a greater sense of urgency in Japan. Immediate resistance can be seen at 154.04(Daily high), an upside break can trigger rise towards 155.10(38.2%fib).On the downside, immediate support is seen at 152.95(Daily low) a break below could take the pair towards 152.00 (Psychological level).
Equities Recap
Asian stock markets were subdued on Wednesday as intensifying Middle East hostilities pushed oil prices toward $100 a barrel, heightening inflation concerns ahead of key U.S. consumer price data due later this week.
China A50 was up by 0.37% , South Korea’s KOSPI was up at 1.48%, Nikkei was down at 0.19%
Commodities Recap
Gold prices rose 1% on Wednesday as the dollar remained subdued, while renewed U.S.-Iran tensions and upcoming inflation data kept investors focused on the interest-rate outlook.
Spot gold was up 1% at $4,399.45 per ounce, by 0633 GMT. U.S. gold futures edged 0.1% higher to $4,443.20.
Brent crude prices were trading close to $100 a barrel on Wednesday for the first time since July, as escalating attacks across the Middle East fuelled concerns over disruptions to oil supplies from the region.
Brent crude futures rose 1.3% to $99.22 a barrel by 0614 GMT, while U.S. West Texas Intermediate crude was up 1.2% at $94.13 a barrel.
