Market Roundup
•German Business Expectations (Sep) 86.3,86.3 forecast, 86.8 previous
•German Current Assessment (Sep) 84.4,86.1 forecast, previous, 86.5
•German Ifo Business Climate Index (Sep) 85.4,86.1 forecast, 86.6 previous
Looking Ahead Economic Data (GMT)
•13:00 US House Price Index (MoM) (Jul) 0.2% forecast, -0.1% previous
•13:00 US House Price Index (YoY) (Jul) 5.1% previous
•13:00 US House Price Index (Jul) 424.5 previous
•13:00 US S&P/CS HPI Composite - 20 s.a. (MoM) (Jul) 0.4% previous
•13:00 US S&P/CS HPI Composite - 20 n.s.a. (MoM) (Jul) 0.6% previous
•13:00 USD S&P/CS HPI Composite - 20 n.s.a. (YoY) (Jul) 5.9% forecast, 6.5% previous
•13:00 Belgium NBB Business Climate (Sep) -12.3 forecast, -12.6 previous
•14:00 US CB Consumer Confidence (Sep) 103.9 forecast, 103.3 previous
•14:00 USD Richmond Manufacturing Index (Sep) -13 forecast, -19 previous
•14:00 US Richmond Manufacturing Shipments (Sep) -15 previous
•14:00 US Richmond Services Index (Sep) -11 previous
•17:00 US2-Year Note Auction 3.874% previous
Looking Ahead Events And Other Releases(GMT)
•16:00 German Buba President Nagel Speaks
Currency Forecast
EUR/USD: The euro climbed against the dollar on Tuesday following China's announcement of broad stimulus measures, underscoring the Eurozone's stronger economic ties to China. In an eagerly awaited press conference, China's top financial regulators unveiled a slate of measures, saying it would cut bank reserves by 50 basis points while reducing mortgage rates to try to spur sluggish economic growth. On the data front, German business morale fell for a fourth straight month in September and by more than expected, a survey showed on Tuesday.The euro was steady at $1.1117, having dropped about 0.5% on Monday as business activity reports for the euro zone economy disappointed. Immediate resistance is noted at 1.1198 (23.6%fib), with a breakout potentially pushing the pair towards 1.1218 (Higher BB). On the downside, immediate support is at 1.1111 (38.2%fib), a drop below this level could lead the pair towards 1.1049(50%fib).
GBP/USD: Sterling strengthened against the dollar on Tuesday as diverging rate expectations between the UK and the U.S favored sterling. UK core inflation rose to 3.6% from 3.3% in August, and may have figured into the BoE's decision to keep rates steady on Sept. 19.U.S. core inflation remained steady at 3.2% in August, having fallen consistently, from 3.9% in January 2024, which likely emboldened the Fed to jumpstart its rate-cutting regime with a supersized 50bp cut.Given expectations of a faster and deeper pace of Fed cuts in 2024 and 2025. Immediate resistance can be seen at 1.3368(23.6%fib), an upside break can trigger rise towards 1.3394(Higher BB).On the downside, immediate support is seen at 1.3334(Daily low), a break below could take the pair towards 1.3284(38.2%fib% ).
AUD/USD: The Australian dollar remained close to nine-month highs on Tuesday after the Reserve Bank of Australia (RBA) kept interest rates steady at 4.35% for the seventh consecutive meeting, reiterating a hawkish stance. Sentiment was further boosted by new stimulus measures from China's central bank, which cut reserve requirements and lending rates, including those for existing home loans. The Reserve Bank of Australia (RBA) kept its cash rate at 4.35% for a seventh consecutive meeting and repeated policy would need to stay restrictive to ensure inflation slowed. The Aussie stood at $0.6843 , after reaching its highest for the year so far at $0.6865. Immediate resistance can be seen at 0.6865(23.6%fib), an upside break can trigger rise towards 0.6891(Higher BB).On the downside, immediate support is seen at 0.6815(Daily low), a break below could take the pair towards 0.6794(38.2%fib).
USD/JPY: The dollar edged higher against the yen on Tuesday, bolstered by data indicating that US business activity remained steady in September. S&P Global reported that its flash U.S. Composite PMI Output Index was little changed at 54.4, compared to a final figure of 54.6 in August, with readings above 50 signaling expansion. This data follows last week's larger-than-expected 50 basis point rate cut by the Federal Reserve, which officials said aimed to maintain a healthy balance in the economy. Strong resistance can be seen at 144.73 (38.2%fib), an upside break can trigger rise towards 145.00 (psychological level). On the downside, immediate support is seen at 141.70(23.6%fib), a break below could take the pair towards 140.36(Lower BB).
Equities Recap
European shares traded on a positive note Tuesday, as China's sweeping stimulus measures boosted stocks of luxury companies and miners.
UK's benchmark FTSE 100 was up by 0.32 percent, Germany's Dax was up by 0.80 percent, France’s CAC finished the was up by 1.64 percent.
Commodities Recap
Gold prices surged to a record high on Tuesday as a cocktail of factors, from hopes of further U.S. rate cuts and China stimulus measures to elevated Middle East tensions, lifted demand.
Spot gold steadied at $2,628.63 per ounce as of 0903 GMT after hitting a record high of $2,639.95 earlier in the day.U.S. gold futures were flat at $2,653.30.
Oil prices rose on Tuesday following news of monetary stimulus from top importer China and worries that conflicts in the Middle East could disrupt regional supply. Additionally, another hurricane posed a threat to supply in the United States, the world's largest crude producer..
Brent crude futures were up $1.34, or 1.8%, at $75.24 a barrel by 0853 GMT. U.S. WTI crude futures rose $1.38, or 2%, to $71.75.
