Market Roundup
•UK Jul Construction Output (MoM) 0.27%, 1.30% previous
•German 12-Month Bubill Auction 1.585%,0.724% previous
Looking Ahead - Economic Data (GMT)
•12:30 Canada Aug IPPI (YoY) 11.9% previous
•12:30 Canada Aug RMPI (MoM) 3.2% forecast, -7.4% previous
•12:30 Canada Aug IPPI (MoM) 0.2% forecast,-2.1% previous
•12:30 Canada Aug RMPI (YoY) 19.1% previous
• 13:00 French 12-Month BTF Auction 1.450% previous
• 13:00 French 3-Month BTF Auction 0.648% previous
• 13:00 French 6-Month BTF Auction 0.747% previous
• 15:30 US 3-Month Bill Auction 3.075% previous
•15:30 US 6-Month Bill Auction 3.465% previous
Looking Ahead - Events, Other Releases (GMT)
•13:00 German Buba Vice President Buch Speaks
Fxbeat
EUR/USD: The euro dipped against dollar on Monday as investors braced for the outcome of the Federal Reserve policy meeting later this week in a market which has already priced in more tightening, even through a recession. Chief economist Philip Lane said that the European Central Bank (ECB) could raise interest rates next year, causing pain for consumers as it tries to depress demand that is increasingly adding to sky-high inflation. The Fed is widely expected to raise rates by 75 basis points, but some traders are betting on a 100 basis points increase, according to CME Group’s FedWatch tool. Money markets see a 20% chance of a full-point hike. Immediate resistance can be seen at 1.0002(9DMA), an upside break can trigger rise towards 1.0094 (38.2%fib).On the downside, immediate support is seen at 0.9956 (23.6%fib), a break below could take the pair towards 0.9902(Lower BB).
GBP/USD: Sterling was weaker against a robust dollar on Monday, hovering near last week's 37-year low, with sentiment towards the British currency remaining weak given a darkening economic outlook. Currency trade was generally subdued with London markets closed for the Queen's funeral. While the Bank of England is expected to raise rates by at least 50 basis points (bps) this week, the prospect of further tightening has failed to shore up the pound. The Federal Reserve is also meeting this week and expectations for an even bigger hike of at least 75 bps has bolstered the dollar.The pound was last trading at $1.1381 , down about 0.5% on the day and within sight of the 37-year low hit on Friday at $1.1351. Immediate resistance can be seen at 1.1458(5DMA), an upside break can trigger rise towards 1.1501 (38.2%fib).On the downside, immediate support is seen at 1.1364 (23.6%fib), a break below could take the pair towards 1.1283 (Lower BB).
USD/CHF: The dollar strengthened against the Swiss franc on Monday ahead of a slew of central bank meetings that include one by the U.S. Federal Reserve that is likely to deliver another hefty rate hike. Markets have entertained the possibility of a 100 bps rate hike when the Fed concludes its two-day meeting on Wednesday. Markets fully price in a 75 basis point Fed rate hike this week and a roughly 20% chance of a 100 bps increase The dollar index , which measures the currency against six counterparts, was up 0.4% at 110.06, heading back towards a 20-year high of 110.79 hit on Sept. 7. Immediate resistance can be seen at 0.9696 (38.2%fib), an upside break can trigger rise towards 0.9776 (23.6%fib).On the downside, immediate support is seen at 0.9632 (50%fib), a break below could take the pair towards 0.9521(61.8%fib).
USD/JPY: The dollar strengthened against the Japanese yen on Monday as investors prepared for a packed week of central bank meetings which will see borrowing costs rise globally, with the chance of a super-sized hike in the United States. Markets are fully priced for a rise in interest rates of 75 basis points from the Federal Reserve, with futures showing a 20% chance of a full percentage point.They also indicate a real chance that rates could hit 4.5% as the Fed is forced to tip the economy into recession to subdue inflation. The dollar rose 0.34 to 143.45 yen on Monday , having backed away from the recent 24-year peak of 144.99 in the face of increasingly strident intervention warnings from Japanese policymakers. Strong resistance can be seen at 143.54 (5DMA), an upside break can trigger rise towards 144.77(23.6%fib).On the downside, immediate support is seen at 142.63 (Daily low), a break below could take the pair towards 142.01 (38.2%fib).
Equities Recap
French shares dragged European markets lower on Monday after two major TV groups fell on abandoning their merger plans, in a dour start to a week that could see a large interest rate hike by the Federal Reserve and a host of other central bank meetings.
At (GMT 12:21),UK's benchmark FTSE 100 was last trading down at 0.62 %percent, Germany's Dax was down by 0.41 % percent, France’s CAC finished was down by 1.04% percent.
Commodities Recap
Gold prices slipped on Monday, pressured by a firmer dollar as investors braced for aggressive interest rate hikes by the U.S. Federal Reserve and other central banks this week in an effort to tame high inflation.
Spot gold was down 0.8% at $1,661.65 an ounce at 0724 GMT. U.S. gold futures fell 0.8% to $1,670.80.
Oil fell by more than 2% on Monday, pressured by expectations of weaker global demand and by U.S. dollar strength ahead of possible large increases to interest rates, though supply worries limited the decline.
Brent crude for November delivery fell $2.24, or 2.5%, to $89.11 a barrel by 1213 GMT. U.S. West Texas Intermediate (WTI) for October dropped $2.32, or 2.7%, to $82.79.
