Market Roundup
•French CPI (MoM) (Aug) 0.6%forecast, 0.2% previous
•French CPI (YoY) (Aug) 1.9% forecast, 2.3% previous
•French HICP (YoY) (Aug) 2.2% forecast, 2.7% previous
•French HICP (MoM) (Aug) 0.6% forecast, 0.2% previous
•China Industrial Production (YoY) (Jul) -2.7% forecast, -3.9% previous
•EU Jul Industrial Production (YoY) -2.2%,-2.7% forecast, -4.1% previous
•EU Jul Industrial Production (MoM) -0.3%,-0.6% forecast, -0.1% previous
Looking Ahead Economic Data(GMT)
•12:30 US Export Price Index (YoY) (Aug) 1.4% previous
•12:30 US Export Price Index (MoM) (Aug) forecast -0.1%, previous 0.7%
•12:30 US Import Price Index (YoY) (Aug) 1.6% previous
•12:30 US Import Price Index (MoM) (Aug) forecast -0.2%, previous 0.1%
•12:30 Canada Capacity Utilization Rate (Q2) forecast 78.8%, previous 78.5%
•12:30 Canada Wholesale Sales (MoM) (Jul) forecast -1.1%, previous -0.6%
•14:00 US Michigan 1-Year Inflation Expectations (Sep) 2.8% previous
•14:00 US Michigan 5-Year Inflation Expectations (Sep) 3.0% previous
•14:00 US Michigan Consumer Expectations (Sep) 71.0 forecast, 72.1 previous
•14:00 US Michigan Consumer Sentiment (Sep) 68.3 forecast, 67.9 previous
•14:00 US Michigan Current Conditions (Sep) forecast 61.5, 61.3 previous
Looking Ahead Events And Other Releases(GMT)
• No Data Ahead
Currency Forecast
EUR/USD: The euro steadied against the dollar on Friday, supported by the European Central Bank's widely anticipated quarter-point rate cut on Thursday. The ECB cited lower inflation and economic growth as reasons for the adjustment. While the second quarter-point rate cut since June was expected, the path for future rate changes remains uncertain. The ECB did not indicate another rate cut for October and noted that domestic inflation remains elevated. Investors are now focused on the Federal Reserve, which will announce its interest rate decision at the end of its two-day meeting next Wednesday. As of 12:07 GMT, the euro was at $1.1081, following a 0.57% rise on Thursday. Immediate resistance can be seen at 1.1087(38.2%fib), an upside break can trigger rise towards 1.1170(23.6%fib).On the downside, immediate support is seen at 1.1017(38.2%fib), a break below could take the pair towards 1.0993 (Lower BB).
GBP/USD: The British pound gained slightly on Friday as the focus shifted to next week's UK inflation data and central bank meeting. The next key input for the BoE will be UK inflation data released on Wednesday, the day before its policy announcement.On Wednesday this week, data from Britain's Office for National Statistics showed the UK economy stagnated in July, sending the pound to its lowest since Aug. 20. A poll of economists had forecast a 0.2% month-on-month expansion.The Bank of England is widely expected to keep interest rates on hold next week, with futures markets implying around an 80% chance that rates remain unchanged, after a 25 basis-point rate cut last month. Sterling edged up on the day at $1.3146 .Immediate resistance can be seen at 1.3164(38.2%fib), an upside break can trigger rise towards 1.3262(23.6%fib).On the downside, immediate support is seen at 1.3086(38.2%fib), a break below could take the pair towards 1.3000(psychological level).
AUD/USD: The Australian dollar was poised for weekly gains on Friday, driven by a rally in equities and commodities. The currency benefited from a rebound in risk appetite, as reflected in rising global equities and commodity prices, alongside a slight easing of U.S. downturn fears. U.S. producer price data indicated that price pressures continue to ease, bolstering expectations for imminent rate cuts. A significant half-point rate cut by the Federal Reserve this month has gained traction, with the CME FedWatch tool showing a 43% chance for such a move, up from just 14% a day earlier. The Aussie held at $0.6697, having surged 0.7% overnight, moving further away from a one-month low of $0.6620 reached earlier in the week.Immediate resistance can be seen at 0.6739(38.2%fib), an upside break can trigger rise towards 0.6791(Sep 3rd high).On the downside, immediate support is seen at 0.6688(50%fib), a break below could take the pair towards 0.6626(61.8%fib).
USD/JPY: The dollar fell to its lowest level this year against the Japanese yen on Friday, following media reports that reignited speculation about a significant Federal Reserve rate cut next week. Analysts noted that reports from the Wall Street Journal and Financial Times, suggesting that a 50 basis point cut remains a possibility, along with comments from a former Fed official advocating for a larger cut, shifted market expectations. The U.S. currency dropped more than 0.8% to 140.645 yen, the lowest since late December, and was last down 0.7% at 140.8 yen. Traders are now pricing in about a 40% chance of a 50 basis point cut by the Fed next Wednesday, up from around 25% on Thursday and 15% on Wednesday. Strong resistance can be seen at 142.44 (Sep 9th high), an upside break can trigger rise towards 143.00 (Psychological level). On the downside, immediate support is seen at 140.60(23.6%fib), a break below could take the pair towards 140.21 (Lower BB).
Equities Recap
European stocks advanced on Friday and were set for weekly gains, driven by strong performance from miners. Investors shifted their focus to the U.S. Federal Reserve, anticipating a long-awaited monetary easing at its meeting next week.
UK's benchmark FTSE 100 was up by 0.30 percent, Germany's Dax was up by 0.62 percent, France’s CAC finished the was up by 0.28 percent.
Commodities Recap
Gold was on track for its strongest weekly gain since mid-August, rising 2.8% to a record high of $2,570 an ounce, fueled by dollar weakness. It was last up 0.3% at $2,566 an ounce.
Oil prices climbed 1% on Friday, extending their rally and positioning crude for a weekly gain, driven by output disruptions in the U.S. Gulf of Mexico after Hurricane Francine prompted the evacuation of production platforms.
Brent crude futures rose 72 cents, or 1%, to $72.69 a barrel by 1048 GMT. U.S. West Texas Intermediate crude futures were up 80 cents, or 1.2%, at $69.77.
