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Market Roundup
• Swiss ZEW Expectations (Aug) 12.1, 10.0 previous
• UK CBI Distributive Trades Survey (Aug) -48, -35 forecast, -26 previous
• US Core PCE Price Index (YoY) (Jul) 3.3%, 3.3% forecast, 3.3% previous
• US Core PCE Price Index (MoM) (Jul) 0.2%,0.2% forecast, 0.1% previous
• US GDP (QoQ) (Q2) 1.5%, 1.5% forecast,2.1% previous
• US PCE Price Index (MoM) (Jul) 0.2%, 0.1% forecast,-0.1% previous
• US Personal Spending (MoM) (Jul) 0.2%, 0.1% forecast ,0.3% previous
• US PCE Price Index (YoY) (Jul) 3.7%,3.6% forecast,3.7% previous
• US GDP Price Index (QoQ) (Q2) 6.4%, 6.3% forecast, 3.6% previous
• US Core PCE Prices (Q2) 3.60% ,3.40% forecast 4.40% previous
• US Durable Goods Orders (MoM) (Jul) 1.1%,0.4% forecast,0.3% previous
• US Core Durable Goods Orders (MoM) (Jul) 0.4%,0.6% forecast , 1.1% previous
• US Personal Income (MoM) (Jul) 0.4%, 0.2% forecast,0.2% previous
• US Real Personal Consumption (MoM) (Jul) 0.0%,0.4% previous
• US Real Consumer Spending (Q2) 3.4% 3.2% forecast 0.5% previous
• US GDP Sales (Q2) 2.2%, 2.2% forecast 1.9% previous
• US PCE Prices (Q2) 5.3%,5.1% forecast, 4.6% previous
• US Goods Orders Non Defense Ex Air (MoM) (Jul) 0.2% , 0.9% forecast 1.7% previous
• US Durables Excluding Defense (MoM) (Jul) 1.3%, 0.3% previous
• US Corporate Profits (QoQ) (Q2) 8.2%, 0.5% previous
Looking Ahead Economic Data (GMT)
• 14:30 US Crude Oil Inventories 1.600M forecast ,4.405M previous
• 14:30 US Cushing Crude Oil Inventories -1.314M previous
• 14:30 US EIA Weekly Refinery Utilization Rates (WoW) 1.0% previous
• 14:30 US Distillate Fuel Production -0.054M previous
Looking Ahead Events And Other Releases (GMT)
• No Events Ahead
Currency Forecast
EUR/USD : The euro dipped against the U.S. dollar on Wednesday as investors digested hotter than expected US inflation data. Annual U.S. inflation unexpectedly held steady in July well above the Federal Reserve's 2% target for the 65th straight month, and the pause in the decline from a recent war-induced peak is likely to intensify the central bank's debate over whether interest rates should be lifted or held steady.The Personal Consumption Expenditures Price Index increased 3.7% in the 12 months through July, unchanged from June, the Commerce Department's Bureau of Economic Analysis said on Wednesday. Economists polled by Reuters had forecast a reading for PCE, which the Fed uses to set its target, of 3.6%.. Immediate resistance can be seen at 1.1680(38.2%fib), an upside break can trigger rise towards 1.1734(Higher BB).On the downside, immediate support is seen at 1.1656(Daily low), a break below could take the pair towards 1.1585(38.2%fib).
GBP/USD: The British pound eased slightly on Wednesday after hotter-than-expected inflation data reinforced bets on another quarter-point Federal Reserve rate hike this year but the pair remains close to its six-and-a-half-month high of 1.3674 reached last Friday . The 12-month gain in the personal consumption expenditures price index, which the Fed targets at 2%, edged up to 3.7% last month from 3.6% in the month prior, the Commerce Department said. Core PCE inflation, which strips out volatile food and energy and is seen as an indicator of underlying inflation pressures, was 3.3% from a year earlier, no better than it had been in June.Fed funds futures prices now reflect about a 44% probability of a September Fed rate hike, versus about 36% immediately before, and show traders are fully convinced that the Fed will have raised the policy rate by the end of the year. Immediate resistance can be seen at 1.3685(23.6%fib), an upside break can trigger rise towards 1.3716(Higher BB).On the downside, immediate support is seen at 1.3624(Daily low), a break below could take the pair towards1.3531(38.2%fib).
AUD/USD: The Australian dollar firmed on Wednesday as stronger-than-expected Australian inflation reinforced expectations that the Reserve Bank of Australia could resume tightening policy.July headline CPI increased 1.0% month-on-month and 3.5% year-on-year, exceeding expectations of 0.8% and 3.3%. The trimmed-mean measure, which is closely watched by the RBA, also remained elevated at 3.6% year-on-year, keeping underlying price pressures above the central bank’s 2%-3% target band.The stronger inflation report has shifted attention back toward the possibility of another RBA rate hike. Markets had previously expected the central bank to remain on hold, but the latest data suggest inflation is proving more persistent than anticipated. Immediate resistance can be seen at 0.7178(Higher BB), an upside break can trigger rise towards 0.7201(23.6%fib).On the downside, immediate support is seen at 0.7093 (38.2%fib), a break below could take the pair towards 07054(SMA 20)
USD/JPY: The U.S. dollar eased against yen slightly on Wednesday as investors digested US inflation data and awaited Federal Reserve Chair Kevin Warsh’s speech later this week. The PCE price index rose 3.7% year-on-year in July, unchanged from June and slightly above economists’ 3.6% forecast, according to the Commerce Department’s Bureau of Economic Analysis. Economists polled by Reuters had forecast a reading of 3.6%.Traders now see a 40% chance of an interest rate hike next month, compared to 36% before the data, and are pricing in a 60% chance that the Fed will leave rates unchanged, according to the CME FedWatch Tool. Immediate resistance can be seen at 159.21(SMA 20), an upside break can trigger rise towards 160.00(Psychological level).On the downside, immediate support is seen at 158.60(Daily low) a break below could take the pair towards 156.16 (Daily low).
Equities Recap
European shares were largely flat on Wednesday as investors braced for Nvidia's earnings report, while hopes that the Strait of Hormuz may reopen soon pushed oil prices lower.
UK's benchmark FTSE 100 was up by 0.23percent, Germany's Dax was up by 0.53 percent, France’s CAC was up by 0.65 percent.
Commodities Recap
Oil prices fell more than 1.5% on Wednesday as investors focused on Iran-Oman talks over the Strait of Hormuz, while ongoing shipping disruptions continued to affect the major oil-exporting region.
Brent crude futures were down $1.65, or 1.86%, to $86.93 a barrel at 1314 GMT. West Texas Intermediate crude futures were down $1.44, or 1.75%, at $80.92.
Gold prices extended losses on Wednesday after U.S. inflation data came largely in line with expectations, boosting bets on a Federal Reserve rate hike next month.
Spot gold fell 1% to $4,611.79 per ounce by 1310 GMT (9:10 a.m. EDT), after prices had climbed to their highest since May 14 on Tuesday. U.S. gold futures dropped 0.6% to $4,667.10.
