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Market Roundup
•Australia MI Inflation Expectations (Oct) 5.3%, 4.9% previous
•Japan 30-Year JGB Auction 4.109%, 4.100% previous
•German Trade Balance (Aug) 19.5B, 19.0B forecast, 21.3B previous
•German Exports (MoM) (Aug) -0.8%, 0.8% forecast, -0.8% previous
•German Imports (MoM) (Aug) 0.9%, 2.8% forecast, -5.7% previous
Looking Ahead Economic Data (GMT)
• 10:00 Irish HICP (MoM) (Sep) 0.2% forecast, 0.6% previous
• 10:00 rish CPI (YoY) (Sep) 3.7% previous
• 10:00 Irish CPI (MoM) (Sep) 0.7% previous
Looking Ahead Events And Other Releases (GMT)
•10:00 EU Eurogroup Meetings
•10:00 EU ECB's Lane Speaks
•10:30 UK BoE MPC Member Pill Speaks
•11:30 EU ECB Publishes Account of Monetary Policy Meeting
Currency Forecast
EUR/USD : The euro traded near 17-month low as dollar firmed on Thursday as investors assessed the likelihood of another US Federal Reserve interest rate hike before year-end.Fed policymakers were divided last month over the rationale for raising interest rates, with "some participants" seeing a hike as needed to keep the impact of energy and other price shocks at bay, but a more hawkish core viewing it as necessary to guard against emerging demand-driven inflation, minutes showed.Traders see only a 19% chance of a rate hike later this month, but are pricing in an 86% likelihood of an increase in December, according to CME's FedWatch tool.Meanwile,IMF Managing Director Kristalina Georgieva warned that elevated energy prices, record public debt and risks tied to the AI investment boom are threatening the global economy, urging governments to strengthen fiscal and monetary safeguards. Immediate resistance can be seen at 1.1294(38.2%fib), an upside break can trigger rise towards 1.1393(50%fib).On the downside, immediate support is seen at 1.1188(23.6%fib), a break below could take the pair towards 1.1111(Lower BB).
GBP/USD: The pound slipped lower on Thursday as greenback steadied as investors assessed the likelihood of another US Federal Reserve interest rate hike this year. Federal Reserve policymakers voted unanimously to raise interest rates by a quarter of a percentage point at the US central bank's September 15-16 meeting, but minutes released on Wednesday indicated divisions over their rationale for doing so.The minutes did little to shift expectations that the Fed will stand pat at its meeting later this month. Fed funds futures are pricing an implied 81.7% probability the US central bank will keep rates on hold at its next two-day meeting ending October 28, nudging up from 80.1% a day earlier, according to the CME Group's FedWatch tool.. Immediate resistance can be seen at 1.3297(38.2%fib), an upside break can trigger rise towards 1.3339(SMA 20).On the downside, immediate support is seen at 1.3165(23.6%fib), a break below could take the pair towards1.3111 (Lower BB).
AUD/USD: The Australian dollar slipped lower from three-day high on Thursday as renewed jitters in global bond markets weighed on investor sentiment and reduced demand for risk-sensitive currencies such as the Australian dollar.The RBA's September meeting minutes, due on Tuesday, will be closely scrutinized for clues about the central bank's future policy path.Traders will focus on policymakers’ assessment of inflation, labour-market conditions and the risks posed by higher energy prices, particularly following the RBA’s recent tightening cycle.Investors will focus on September employment data next week for further guidance on the outlook, following an unexpected rise in the unemployment rate to a five-year high of 4.6% in August.Immediate resistance can be seen at 0.6991(38.2%fib), an upside break can trigger rise towards 0.7063(50%fib).On the downside, immediate support is seen at 0.6937 (Oct 5th low), a break below could take the pair towards 0.6900(23.6% fib)
USD /JPY : The U.S. dollar eased slightly against the yen on Thurday after data released showed Japan's current account surplus widened in August.Japan's current account surplus stood at 4.062 trillion yen ($25.7 billion) in August, higher than economists' median forecast for a surplus of 3.19 trillion yen.Meanwhile, BoJ policymaker Ayano Sato, one of the dissenters to September’s rate hike, said this week that interest rates should be raised gradually in several stages, adding to expectations of another rate increase.The BOJ raised its key rate to a 31-year high last month, with its governor signalling the central bank had entered a phase focused on preventing underlying inflation from overshooting its target, raising the prospect of tighter policy.At the October 29-30 meeting, the BOJ will release fresh quarterly growth and inflation forecasts that will be closely watched by markets for clues on the next rate-hike timing. Immediate resistance can be seen at 158.00(Psychological level), an upside break can trigger rise towards 158.48(50%fib).On the downside, immediate support is seen at 156.46(SMA 20) a break below could take the pair towards 156.13(61.8%fib).
Equities Recap
Asian shares slid on Thursday as strains in sovereign bond markets were aggravated by reports some major tech companies were seeking to raise billions in debt in direct competition for limited funding.
Japan’s Nikkei 225 was down by 1.39% , Hang Seng was down at 1.61%, South Korea’s KOSPI was down at 2.62%
Commodities Recap
Gold prices steadied on Thursday after sliding to a two-month low in the previous session, as investors assessed the likelihood of another US Federal Reserve interest rate hike before year-end.
Spot gold was little changed at $4,116.67 per ounce by 0625 GMT. On Wednesday, bullion prices touched their lowest level since August 5 as a firmer dollar and higher US Treasury yields weighed on the market.
Oil prices rose on Thursday on persistent worries about supply from the key Middle East producing region amid an increase in attacks on shipping in the Gulf and the Strait of Hormuz, while the US cut output as a hurricane menaced offshore production.
Brent crude futures rose $2.28, or 2.28%, to $102.28 a barrel by 0427 GMT. US West Texas Intermediate (WTI) crude futures gained $1.66, or 1.88%, to $89.94.
