Market Roundup
• German GDP (QoQ) (Q2) 0.0% ,-0.1% forecast, 0.2% previous
• German GDP (YoY) (Q2) -0.1% ,-0.1% forecast, -0.2% previous
• German Sep GfK German Consumer Climate -22.0 ,-18.4 previous
•UK Aug CBI Distributive Trades Survey -11 forecast, -43 previous
Looking Ahead Economic Data (GMT)
• 12:55 Redbook (YoY) 4.9% previous
•13:00 US Jun House Price Index (MoM) 0.1% forecast,0.0% previous
•13:00 US Jun House Price Index (YoY) 5.7% previous
•13:00 US Jun House Price Index 424.6 previous
•13:00 US Jun S&P/CS HPI Composite - 20 s.a. (MoM) 0.3% forecast, 0.3% previous
•13:00 US Jun S&P/CS HPI Composite - 20 n.s.a. (MoM) 1.0% previous
•13:00 US Jun S&P/CS HPI Composite - 20 n.s.a. (YoY) 6.2% forecast, 6.8% previous
•14:30 US Aug Dallas Fed Services Revenues 7.7 previous
•14:30 US Aug Texas Services Sector Outlook -0.1 previous
Looking Ahead Events And Other Releases (GMT)
• 14:00 German Buba President Nagel Speaks
Currency Forecast
EUR/USD: The euro eased against the dollar on Tuesday as lingering concerns over tensions in the Middle East partially offset investors' optimism for imminent U.S. interest rate cuts. Geopolitical risks kept early currency moves subdued, though fears of an escalating conflict following Israel and Hezbollah's major missile exchange over the weekend petered out. Major currencies were trading near milestone highs, with the dollar approaching its lowest level in over a year. This shift was supported by the anticipated U.S. rate cut in September, following Federal Reserve Chair Jerome Powell's hints at such a move in his Jackson Hole speech on Friday. Markets will closely watch the European Union's inflation print that is set to drop on Friday, for signals on the policy path for the European Central Bank. Immediate resistance can be seen at 1.1184(Daily high), an upside break can trigger rise towards 1.1200(Higher BB).On the downside, immediate support is seen at 1.1098(38.2%fib), a break below could take the pair towards 1.1070 (Aug 20th low).
GBP/USD: The pound rose to its highest level against the U.S. dollar in over two years, and other major currencies also strengthened. This was partly due to a pause in the rise of oil prices, which led investors to shift away from the dollar after the previous session's movements. Market sentiment continues to be influenced by the anticipation of upcoming U.S. rate cuts, which have pressured the dollar recently. Investors largely expect a rate cut at the Federal Reserve's September meeting, with current discussions centering on whether it will be a 50-basis-point cut or a smaller 25-basis-point reduction.Sterling has been one beneficiary of the weakness in the U.S. currency, and on Tuesday the pound hit its highest since March 2022, and was last up 0.25% at $1.32195. Immediate resistance can be seen at 1.3107(23.6%fib), an upside break can trigger rise towards 1.3128(Higher BB).On the downside, immediate support is seen at 1.3006(38.2%fib), a break below could take the pair towards 1.2936(50%fib).
AUD/USD: The Australian dollar steadied against dollar on Tuesday as investors were cautious ahead of key domestic inflation data. The key risk is the July inflation report due on Wednesday, which is expected to show a marked slowdown in headline inflation to 3.4% from 3.8%.Australian retail sales for July are due on Friday and will be scrutinised to see if consumers spent additional income after the government's tax cuts, potentially adding to the inflation challenge.With headline inflation expected to be back in the target band of 2% to 3% later this year, the RBA will be under pressure to ease policy. The Aussie held at $0.6773, having recoiled from a 2024 high of $0.6798. Immediate resistance can be seen at 0.6799 (23.6%fib), an upside break can trigger rise towards 0.6829(Higher BB).On the downside, immediate support is seen at 0.6733 (July 10th low), a break below could take the pair towards 0.6705(38.2%fib).
USD/JPY: The dollar eased slightly against the yen on Tuesday as sentiment remained fragile with investors assessing the risks from rising tensions in the Middle East following Hezbollah and Israel's clash over the weekend. Hezbollah launched hundreds of rockets and drones at Israel early on Sunday, prompting Israel's military to respond with airstrikes involving approximately 100 jets to counter a larger assault. This confrontation marked one of the most significant clashes in over 10 months of border conflict. The yen was a shade higher at 144.49 per dollar. Strong resistance can be seen at 145.00(Psychological level), an upside break can trigger rise towards 146.56(38.2 %fib). On the downside, immediate support is seen at 143.56(23.6 %fib), a break below could take the pair towards 142.45(Lower BB).
Equities Recap
European shares advanced on Tuesday after a quiet start to the week, buoyed by gains in heavyweight mining stocks.
UK's benchmark FTSE 100 was last trading up at 0.38 percent, Germany's Dax was up by 0.50 percent, France’s CAC finished was up by 0.05 percent.
Commodities Recap
Gold prices eased on Tuesday, consolidating near record highs reached last week, as investors sought clarity on the magnitude of an imminent interest rate cut from the Federal Reserve ahead of an inflation report due this week.
Spot gold fell 0.3% to $2,510.02 per ounce, as of 1118 GMT. U.S. gold futures fell 0.4% to $2,545.40.
Oil prices slipped slightly on Tuesday after rebounding more than 7% over the previous three sessions on supply concerns prompted by fears of widening Middle East conflict and a potential shutdown of most of Libya's oil fields.
Brent crude futures were down 36 cents, or 0.4%, at $81.07 a barrel by 1130 GMT. U.S. West Texas Intermediate crude futures dropped 40 cents, or 0.5%, to $77.02.
