Market Roundup
•Finnish Jul Export Price Index (YoY) 1.3%, -0.3% previous
• Finnish Jul Import Price Index (YoY) -0.4%,-0.4% previous
• Finnish Jul PPI (YoY) 0.2%,-0.3% previous
•Swiss Employment Level (Q2) 5.499M, 5.481M previous
•German Aug Business Expectations 86.8, 86.5 forecast, 87.0 previous
•German Aug Current Assessment 86.5,86.5 forecast, 87.1 previous
•German Aug Ifo Business Climate Index 86.6, 86.0 forecast, 87.0 previous
Looking Ahead Economic Data (GMT)
• 12:30 US Jul Core Durable Goods Orders (MoM) 0.0% forecast, 0.5% previous
• 12:30 US Jul Durable Goods Orders (MoM) 4.0%,-6.6% previous
• 12:30 US Jul Durables Excluding Defense (MoM) -7.2% previous
• 12:30 US Jul Goods Orders Non Defense Ex Air (MoM) 0.0% forecast, 1.0% previous
• 12:30 Canada Wholesale Sales (MoM) -0.6% previous
• 13:00 French 12-Month BTF Auction 3.029% previous
• 13:00 French 3-Month BTF Auction 3.502% previous
• 13:00 French 6-Month BTF Auction 3.358% previous
• 14:30 US Atlanta Fed GDPNow (Q3) 2.0% forecast, 2.0% previous
• 14:30 US Dallas Fed Mfg Business Index -17.5 previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro hovered near a multi-month high against the dollar as investors considered the possibility of the Federal Reserve initiating a series of interest rate cuts soon. In a highly anticipated speech at the annual economic conference in Jackson Hole, Wyoming, Fed Chair Jerome Powell supported the imminent beginning of rate reductions, noting that further cooling of the job market would be undesirable. Investors are also awaiting inflation figures from the eurozone, with data from Italy and France already released. Germany and Spain will publish their figures on Thursday. German business sentiment fell to 86.6 in August, slightly above analysts' expectations of 86.0. The euro was trading at $1.1165, not far from its Friday high of $1.1201, a level last seen in July of last year. 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 British pound eased slightly as investors absorbed comments from Bank of England Governor Andrew Bailey. On Friday, Bailey suggested that long-term inflation pressures were easing, but he cautioned against rushing into further interest rate cuts, as it was still too early to be certain that inflation had been fully addressed. In his speech, Bailey expressed hope that Britain might avoid the typical economic hardships associated with high interest rates used to combat inflation. However, he emphasized that the Bank of England would maintain restrictive interest rates for a sufficient period, signaling a gradual approach. Investors are currently pricing in about a one-third chance of a quarter-point rate cut at the BoE's September meeting, and economists expect one more quarter-point reduction later this year. 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 edged lower on Monday but remained close to its 2024 high investors weighed the prospect of the Federal Reserve soon starting on a series of interest rate cuts. The upcoming release of Australia's July CPI report on Wednesday will be pivotal in shaping expectations for RBA rate decisions, as the central bank continues to advocate for maintaining higher rates for an extended period while acknowledging potential inflation risks. Additionally, Q2 capital expenditure data and final July retail sales figures will also be published. 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/CNY stayed near a three-week low, continuing to weaken due to the greenback's broad decline following Fed Chair Jerome Powell's dovish stance. Looking ahead there is moderate U.S. event risk, including July durable goods orders, August consumer confidence, the second estimate of Q2 GDP, and weekly jobless claims. On Friday, key releases will include the University of Michigan sentiment index, inflation expectations, and the U.S. core PCE price index. The Chinese yuan retreated slightly to 7.120 per dollar , after beginning the day by rising as much as 0.13% to 7.115, the strongest level since Aug. 5.Strong resistance can be seen at 7.1254 (Daily high), an upside break can trigger rise towards 7.1361 (50%fib). On the downside, immediate support is seen at 7.1132 (23.6%fib) , a break below could take the pair towards 7.1100 (Psychological level).
USD/JPY: The dollar fell to three week low against the yen on Monday as Federal Reserve Chair Jerome Powell's emphatic dovish shift contrasted sharply with Bank of Japan chief Kazuo Ueda's steadfastly hawkish tone. Earlier on Friday, during parliamentary testimony in Tokyo, Ueda reaffirmed the Bank of Japan's need to adjust its level of easing and indicated that a further increase in the policy rate from its current low level might be necessary. He also downplayed the impact of the July rate hike on market volatility. Key data releases will lead with the services PPI on Tuesday. This will be followed by Tokyo CPI for August, along with preliminary industrial output, employment figures, and retail sales on Friday. 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 remained flat on Monday as investors awaited a series of important economic data scheduled for the week. The technology sector, in particular, helped to limit overall gains.
UK's benchmark FTSE 100 was last up by 0.48 percent, Germany's Dax was last down by 0.10 percent, France’s CAC was last up by 0.26 percent.
Commodities Recap
Oil prices surged on Monday following reports of new production outages in Libya. This added to earlier gains driven by concerns that the escalating conflict in Gaza could potentially disrupt oil supplies in the region.
Brent crude and U.S. West Texas Intermediate (WTI) crude futures both up 2.3%at $80.88/barrel and $76.56/barrel, respectively
Gold held near record highs on Monday, buoyed by a softer dollar and dovish remarks from U.S. Federal Reserve Chair Jerome Powell bolstering expectations of a September interest rate cut.
Spot gold was up 0.6% to $2,524.30 per ounce at 0940 GMT, about $7 shy of the record high of $2,531.60 hit last week. U.S. gold futures also gained 0.6% to $2,560.40.
