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Market Roundup
• US Core PCE Price Index (YoY) (Jul), 3.3%, 3.3% forecast, 3.3% previous
• US Core PCE Price Index (MoM) (Jul), 0.2%, 0.2% forecast, 0.1% previous
• US GDP (QoQ) (Q2), 1.5%, 1.5% forecast, 2.1% previous
• US PCE Price Index (MoM) (Jul), 0.2%, 0.1% forecast, -0.1% previous
• US Personal Spending (MoM) (Jul), 0.2%, 0.1% forecast, 0.3% previous
• US PCE Price Index (YoY) (Jul), 3.7%, 3.6% forecast, 3.7% previous
• US GDP Price Index (QoQ) (Q2), 6.4%, 6.3% forecast, 3.6% previous
• US Core PCE Prices (Q2), 3.60%, 3.40% forecast, 4.40% previous
• US Durable Goods Orders (MoM) (Jul), 1.1%, 0.4% forecast, 0.3% previous
• US Core Durable Goods Orders (MoM) (Jul), 0.4%, 0.6% forecast, 1.1% previous
• US Personal Income (MoM) (Jul), 0.4%, 0.2% forecast, 0.2% previous
• US Real Personal Consumption (MoM) (Jul), 0.0%, 0.4% previous
• US Real Consumer Spending (Q2), 3.4%, 3.2% forecast, 0.5% previous
• US GDP Sales (Q2), 2.2%, 2.2% forecast, 1.9% previous
• US PCE Prices (Q2), 5.3%, 5.1% forecast, 4.6% previous
• US Goods Orders Non Defense Ex Air (MoM) (Jul), 0.2%, 0.9% forecast, 1.7% previous
• US Durables Excluding Defense (MoM) (Jul), 1.3%, 0.3% previous
• US Corporate Profits (QoQ) (Q2), 8.2%, 0.5% previous
• US Atlanta Fed GDPNow (Q3), 4.6%, 4.0% forecast, 4.0% previous
• US Crude Oil Inventories, 0.095M, 1.600M forecast, 4.405M previous
• US Cushing Crude Oil Inventories, 1.176M, -1.314M previous
Looking Ahead Economic Data (GMT)
•01:30 Australia Private New Capital Expenditure (QoQ) (Q2), 0.8%forecast, 6.5% previous
•01:30 Australia Plant/Machinery Capital Expenditure (QoQ) (Q2), 18.1% previous
•01:30 Australia Building Capital Expenditure (MoM) (Q2), -3.8% previous
Looking Ahead Events And Other Releases (GMT)
• No Events Ahead
Currency Forecast
EUR/USD : The euro dipped on Wednesday as dollar strengthened after U.S. data, including hotter-than-expected PCE inflation, slightly boosted expectations for a Fed rate hike ahead of the Jackson Hole symposium.U.S. PCE inflation rose 3.7% year-on-year in July, above the 3.6% forecast, while monthly PCE increased 0.2% versus expectations of 0.1%. Separately, other U.S. data showed the updated reading of second-quarter economic growth came in at 1.5%, unchanged from the initial estimate.Meanwhile, ECB policymaker Isabel Schnabel said rates may need to rise further as Middle East tensions and a strong euro-zone economy create upside risks to inflation. Markets already expect an ECB hike in September, though policymakers are seen as reluctant to signal further tightening beyond that.. Immediate resistance can be seen at 1.1680(38.2%fib), an upside break can trigger rise towards 1.1734(Higher BB).On the downside, immediate support is seen at 1.1656(Daily low), a break below could take the pair towards 1.1585(38.2%fib).
GBP/USD: The British pound dipped on Wednesday after hotter-than-expected inflation data reinforced bets on another quarter-point Federal Reserve rate hike this year but the pair remains close to its six-and-a-half-month high of 1.3674 reached last Friday . The 12-month gain in the personal consumption expenditures price index, which the Fed targets at 2%, edged up to 3.7% last month from 3.6% in the month prior, the Commerce Department said. Core PCE inflation, which strips out volatile food and energy and is seen as an indicator of underlying inflation pressures, was 3.3% from a year earlier, no better than it had been in June. Immediate resistance can be seen at 1.3685(23.6%fib), an upside break can trigger rise towards 1.3716(Higher BB).On the downside, immediate support is seen at 1.3624(Daily low), a break below could take the pair towards1.3531(38.2%fib).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Wednesday as the greenback posted broad-based gains and trade uncertainty revived concerns over Canada's economic outlook. Dollar firmed data showed annual U.S. inflation unexpectedly held steady in July and was well above the Federal Reserve's 2% target for the 65th straight month. Separate government data showed consumer spending decelerating modestly in July while personal incomes rose faster than inflation.The U.S. imposed new 50% tariffs on $20 billion of Canadian imports on Saturday after talks between the two countries collapsed. Canada hit back on Tuesday with retaliatory tariffs on about $20 billion worth of U.S. annual imports and rolled out aid for businesses and workers. Immediate resistance can be seen at 1.3899(50%fib), an upside break can trigger rise towards 1.3916(SMA 20).On the downside, immediate support is seen at 1.3834(Daily low), a break below could take the pair towards 1.3753(38.2%fib).
USD/JPY: The U.S. dollar eased against yen slightly on Wednesday as investors digested US inflation data and awaited Federal Reserve Chair Kevin Warsh’s speech later this week. The PCE price index rose 3.7% year-on-year in July, unchanged from June and slightly above economists’ 3.6% forecast, according to the Commerce Department’s Bureau of Economic Analysis. Economists polled by Reuters had forecast a reading of 3.6%.Traders now see a 40% chance of an interest rate hike next month, compared to 36% before the data, and are pricing in a 60% chance that the Fed will leave rates unchanged, according to the CME FedWatch Tool. Immediate resistance can be seen at 159.21(SMA 20), an upside break can trigger rise towards 160.00(Psychological level).On the downside, immediate support is seen at 158.60(Daily low) a break below could take the pair towards 156.16 (Daily low).
Equities Recap
European shares were largely subdued on Wednesday as investors monitored Iran-Oman talks over the Strait of Hormuz, while firmer-than-expected U.S. inflation data slightly boosted expectations of a Federal Reserve rate hike next month.
UK's benchmark FTSE 100 closed down by 0.07 percent, Germany's Dax ended up by 0.08 percent, France’s CAC finished the day up by 0.27 percent.
Wall Street's main indexes ended slightly lower on Wednesday as hotter-than-expected U.S. inflation data weighed on sentiment, while investors awaited Nvidia's earnings.
Dow Jones closed down by 0.21% percent, S&P 500 closed down by 0.02% percent, Nasdaq settled down by 0.08% percent.
Commodities Recap
Gold prices extended losses on Wednesday after U.S. inflation data came largely in line with expectations, increasing bets on a Federal Reserve interest-rate hike next month, while investors also awaited remarks from Chairman Kevin Warsh this week.
Spot gold fell 1.3% to $4,595.93 per ounce by 1:57 p.m. EDT (1757 GMT), after prices had climbed to their highest since May 14 on Tuesday. U.S. gold futures settled 0.9% lower at $4,653.30.
Oil prices settled lower on Wednesday after a volatile session as investors watched Iran-Oman talks over the Strait of Hormuz and a smaller-than-expected increase in U.S. crude inventories.
Brent crude futures settled down 74 cents, or 0.84%, to $87.84 a barrel. West Texas Intermediate crude futures settled down 13 cents, or 0.16%, at $82.23.
