Market Roundup
•UK Jul Claimant Count Change 135.0K, 14.5K forecast,32.3K previous
•UK Jun Average Earnings Index +Bonus 4.5%, 5.7% previous
•UK Jun Unemployment Rate 4.2%,4.5% forecast,4.4% previous
•UK Jun Employment Change 3M/3M (MoM) 97K,19K previous
•German Aug ZEW Current Conditions -77.3, -68.9 previous
•German Aug ZEW Economic Sentiment 19.2, 32.6 forecast,41.8 previous
•EU Aug ZEW Economic Sentiment 17.9 ,35.4 forecast,43.7 previous
Looking Ahead Economic Data(GMT)
•12:30 US Jul PPI (MoM) 0.2% forecast,0.2% previous
•12:30 US PPI (YoY) 2.3% forecast,2.6% previous
•12:30 US Jul PPI ex. Food/Energy/Transport (MoM) 0.0% previous
•12:30 US Jul Core PPI (MoM) 0.2% forecast,0.4% previous
•12:30 US Jul PPI ex. Food/Energy/Transport (YoY) 3.1% previous
•12:30 US Jul Core PPI (YoY) 2.7% forecast,3.0% previous
•12:55 US Redbook (YoY) 5.1% previous
Looking Ahead Events And Other Releases (GMT)
• 17:15 US FOMC Member Bostic Speaks
Currency Forecast
EUR/USD: The euro was little changed against dollar on Tuesday as investors awaited key U.S. data for more clues on the Federal Reserve's next rate move. The PPI is first out of the traps today, with subdued 0.2% monthly gains expected for both headline and core measures and a retreat in annual headline factory gate inflation to just 2.3%. As always, key components of the PPI basket that feed directly to the Fed's favored PCE gauge healthcare, airfares and fund management fees will be watched closely. The euro dipped 0.1% to $1.0930 , while the dollar index was up 0.1 percent at 103.14. Immediate resistance can be seen at 1.0977(23.6%fib), an upside break can trigger rise towards 1.1000(Psychological level).On the downside, immediate support is seen at 1.0903(38.2%fib), a break below could take the pair towards 1.0839(50%fib).
GBP/USD: The pound rose on Tuesday after data showed Britain's unemployment rate unexpectedly fell in June, although wage growth slowed. Figures showed the UK jobless rate dropped to 4.2% in June, down from 4.4% in May defying expectations for a small rise. The labour market data also showed that job vacancies fell while annual growth in average weekly earnings excluding bonuses slowed to 5.4% in the three months through June, the lowest since August 2022, from 5.8% in May. Sterling was last up 0.22% at $1.2794, from $1.2779 before the data, as investors focused on the strength of the labour market and its potential impact on Bank of England policy . Immediate resistance can be seen at 1.2818(38.2%fib), an upside break can trigger rise towards 1.2865(23.6%fib).On the downside, immediate support is seen at 1.2774(50%fib), a break below could take the pair towards 1.2731(61.8%fib).
USD/CHF: The dollar steadied against the Swiss franc on Tuesday as traders looked to key U.S. inflation data due later this week for more monetary policy cues. Traders are awaiting July U.S. producer price figures due later in the day and consumer price (CPI) numbers on Wednesday. Markets see about 50% chance of a 50-basis point rate cut in September, according to the CME FedWatch Tool. Markets are evenly split between a cut of 25 bps and 50 bps at the next meeting in September. Traders are pricing in a total of 100 bps of cuts this year. Immediate resistance can be seen at 0.8698 (38.2%fib), an upside break can trigger rise towards 0.8789 (50%fib).On the downside, immediate support is seen at 0.8598(23.6%fib), a break below could take the pair towards 0.8511(Lower BB).
USD/JPY: The dollar firmed on Tuesday but gains were limited as investors refrained from making large bets ahead of U.S. producer prices. U.S. producer price data are due later in the day and will likely sway markets before focus switches to consumer price index data for July scheduled for Wednesday. The retail sales report on Thursday rounds up the data dump this week.Investors will parse through the dataset to gauge whether the Federal Reserve will go for a 50 basis point cut or a 25 bps cut in its September meeting. Traders are currently evenly split between the two, the CME FedWatch tool showed . Strong resistance can be seen at 148.45(38.2 %fib), an upside break can trigger rise towards 150.80 (50%fib). On the downside, immediate support is seen at 145.43(23.6%fib), a break below could take the pair towards 143.00(Lower BB).
Equities Recap
Europe's main stock index inched higher on Tuesday after presenting a flat note in the previous session, while investors awaited key U.S. data for more clues on the Federal Reserve's next rate move, although dour corporate earnings limited gains.
UK's benchmark FTSE 100 was last trading up at 0.03 percent, Germany's Dax was up by 0.25 percent, France’s CAC finished was down by 0.12 percent.
Commodities Recap
Gold prices fell on Tuesday as investors locked in profits after the metal closed at an all-time high in the previous session and ahead of key U.S. inflation data that could influence bets around the Federal Reserve's monetary policy path.
Spot gold was down 0.4% at $2,461.75 per ounce by 1052 GMT. Prices rose 1.7% to $2,472, a record high for the closing price, on Monday.
Oil prices were stable on Tuesday as supply risks arising from expectations of widening Middle Eastern conflict were tempered by demand concerns after OPEC on Monday cut its forecast for demand growth in 2024.
Benchmark Brent crude futures were down 8 cents, or 0.10%, at $82.22 a barrel as of 1030 GMT. U.S. West Texas Intermediate crude CLc1 was down 1 cent, or 0.01%, at $80.05.
