Market Roundup
• UK Average Earnings ex Bonus (Jul): 5.1%,5.4% previous
• UK Average Earnings Index + Bonus (Jul): 4.0%,4.1%, 4.6% previous
• UK Claimant Count Change (Aug): 23.7K,95.5K, 135.0K previous
• UK Employment Change 3M/3M (MoM) (Jul): 265K,115Kforecast, 97K previous
•UK Unemployment Rate (Jul): 4.1%, 4.1% forecast, 4.2% previous
•German CPI (YoY) (Aug): 1.9% ,1.9%forecast, 2.3% previous
•German CPI (MoM) (Aug): -0.1%,-0.1%forecast, 0.3% previous
•German HICP (MoM) (Aug): -0.2%,-0.2%forecast, Previous 0.5% previous
•German HICP (YoY) (Aug): 2.0%,2.0%forecast, 2.6% previous
Looking Ahead Economic Data (GMT)
•12:55 US Redbook (YoY) 6.3% previous
•20:30 US API Weekly Crude Oil Stock 0.700M forecast, -7.400M previous
Looking Ahead Events And Other Releases (GMT)
• 14:00 US Fed Vice Chair for Supervision Barr Speaks
• 16:15 US FOMC Member Bowman Speaks
Currency forecast
EUR/USD: The euro edged lower against the dollar on Tuesday as investors awaited the European Central Bank’s policy meeting on Thursday. Focus will be on the ECB’s decision, with markets anticipating a 25 basis point reduction and looking for any hints from ECB President Christine Lagarde about potential further cuts this year. Additionally, U.S. inflation figures will be scrutinized for clues on whether the Federal Reserve, which meets later this month, will opt for a 25 basis point or a 50 basis point rate cut. Traders are pricing in 63 bps of easing this year from the ECB. The euro was last at$1.1039 after dropping nearly 0.5% on Monday. Immediate resistance can be seen at 1.1118(38.2%fib), an upside break can trigger rise towards 1.1185(Aug 20th high).On the downside, immediate support is seen at 1.1032(50%fib), a break below could take the pair towards 1.0958 (61.8%fib).
GBP/USD: The British pound gained slightly against the dollar following UK labor data that suggested the British economy remains robust. Data revealed that pay growth eased to its lowest level in over two years for the three months ending in July, while employment surged. This could reinforce expectations that the Bank of England might lower interest rates again before the year’s end. Investors are keenly awaiting the gross domestic product figures set to be released on Wednesday, as well as the new Labour government's first fiscal event on October 30. In response to the data, sterling rose by 0.1% to $1.3085, having earlier peaked at $1.3107. Immediate resistance can be seen at 1.3153(38.2%fib), an upside break can trigger rise towards 1.3240(Sep 6th high).On the downside, immediate support is seen at 1.3060(50%fib), a break below could take the pair towards 1.2949(61.8%fib).
USD/CHF: The dollar dipped slightly against the Swiss franc on Tuesday ahead of key U.S. inflation data and the televised presidential debate. This week’s major events include the consumer price index (CPI) report, set for release on Wednesday morning, and the first debate between Democratic candidate Kamala Harris and Republican incumbent Donald Trump on Tuesday night, ahead of the November 5 election. Investors anticipate that a victory for Trump could strengthen the dollar, as increased tariffs might support the currency and higher fiscal spending could lead to higher interest rates. At 12:30 GMT, the dollar was 0.23 percent lower versus the Swiss franc at 0.8473 . Immediate resistance can be seen at 0.8500(Aug 30th high), an upside break can trigger rise towards 0.8573(38.2% fib).On the downside, immediate support is seen at 0.8434(23.6% fib), a break below could take the pair towards 0.8386(Sep 6th low).
USD/JPY: The dollar edged up against the yen as on Tuesday as investors prepared for upcoming U.S. inflation data and reassessed expectations for a substantial interest rate cut by the Federal Reserve next week. A mixed labor report on Friday did not provide a definitive signal on whether the Fed would implement a standard 25 basis point (bps) cut or a larger 50 bps reduction at its September 17-18 policy meeting. Traders are now looking to Wednesday's U.S. consumer price index (CPI) report for additional guidance, although the Fed has emphasized that employment is currently a more critical focus than inflation. The headline CPI is projected to have increased by 0.2% month-on-month in August, unchanged from the previous month, according to a recent poll.. Strong resistance can be seen at 143.71 (Sep 9th high), an upside break can trigger rise towards 145.00 (Psychological level). On the downside, immediate support is seen at 141.90(23.6%fib), a break below could take the pair towards 141.49 (Lower BB).
Equities Recap
European shares advanced on Tuesday, driven by gains in the real estate sector. Investors were also anticipating a likely rate cut by the European Central Bank later in the week.
At (GMT 12:00 ),UK's benchmark FTSE 100 was last trading down at 0.55 percent, Germany's Dax was down by 0.40 percent, France’s CAC finished was up by 0.15 percent.
Commodities Recap
Gold prices were little changed on Tuesday as investors exercised caution ahead of a key U.S. inflation reading on Wednesday that could influence the Federal Reserve's policy decision next week.
Spot gold was steady at $2,506.59 per ounce by 1031 GMT. U.S. gold futures were little changed at $2,535.20.
Oil prices gave up the previous day's gains as weak Chinese demand offset U.S. supply disruptions from Tropical Storm Francine and continued global oil oversupply risks that weigh on the market.
Brent crude futures were down 79 cents, or 1.1%, at $71.05 a barrel by 0948 GMT. U.S. West Texas Intermediate crude lost 82 cents, or 1.2%, to $67.89.
