Market Roundup
• French 12-Months BTF Auction 3.053% previous
• French 3-Months BTF Auction 3.553% previous
• French 6-Months BTF Auction 3.380% previous
• US Jul Leading Index (MoM) -0.4%forecast, -0.2% previous
Looking Ahead Economic Data(GMT)
• 22:45 New Zealand Jul Exports 6.17B previous
•22:45 New Zealand Jul Imports 5.47B previous
•22:45 New Zealand Jul Trade Balance (MoM) 331M forecast, 699M previous
•22:45 New Zealand Jul Trade Balance (YoY) -9,400M previous
• 01:00 China Aug Loan Prime Rate 5Y 3.85%forecast 3.85% previous
• 01:15 China PBoC Loan Prime Rate 3.35% forecast, 3.35% previous
Looking Ahead Events And Other Releases(GMT)
• 01:30 Australia RBA Meeting Minutes
Currency Summaries
EUR/USD: The euro strengthened on Monday as dollar dipped as investors focused on U.S. Federal Reserve Chair Jerome Powell's upcoming speech at Jackson Hole for hints on potential rate cuts. Markets are also anticipating the release of flash Purchasing Managers' Index (PMI) data from France, Germany, Britain, and the Eurozone, along with U.S. PMI numbers and initial jobless claims data later this week. Powell's speech on Friday is expected to provide crucial insights into an imminent rate cut. Additionally, traders will be closely analyzing the minutes from the Fed's July policy meeting, set to be released on Wednesday. The market is currently anticipating a 25-basis-point rate cut in September, with a 28.5% chance of a 50 bp move, according to the CME FedWatch tool. Immediate resistance can be seen at 1.1049(23.6%fib), an upside break can trigger rise towards 1.1072 (Higher BB).On the downside, immediate support is seen at 1.0985(38.2%fib), a break below could take the pair towards 1.0929(50%fib).
GBP/USD: Sterling reached a one-month high against the dollar on Monday, driven by increasing bets on U.S. interest rate cuts, which weakened the greenback against other major currencies. Investors are closely watching upcoming speeches by Federal Reserve Chair Jerome Powell and Bank of England Governor Andrew Bailey at the central bankers' gathering in Jackson Hole, Wyoming, on Friday for insights into future monetary policies in the U.S. and UK. The dollar dropped to a seven-month low against major currencies, influenced by expectations of a dovish shift in the Fed’s July meeting minutes, set to be released on Wednesday, and Powell's forthcoming speech. Immediate resistance can be seen at 1.2997(Daily high), an upside break can trigger rise towards 1.3024(JHIgher BB).On the downside, immediate support is seen at 1.2875(38.2%fib), a break below could take the pair towards 1.2789(50%fib).
USD/CAD: The Canadian dollar climbed to a five-week high against the U.S. dollar on Monday, buoyed by optimism that the U.S. economy might avoid a recession and in anticipation of domestic inflation data that could influence expectations for Bank of Canada rate cuts . Fed Chair Jerome Powell's remarks at the Jackson Hole Economic Symposium on Friday will be closely analyzed for insights into the central bank's transition from restrictive to neutral monetary policy. Meanwhile, the Bank of Canada has already started lowering interest rates and indicates that further cuts are possible if inflation continues to cool as projected. Canada's consumer price index report for July, due on Tuesday, is expected to show inflation easing to 2.5% from 2.7% in June. Immediate resistance can be seen at 1.4150 (Daily high), an upside break can trigger rise towards 1.4318 (Higher BB).On the downside, immediate support is seen at 1.4093 (21 DMA), a break below could take the pair towards 1.4003 (9 DMA).
USD/JPY: The dollar declined against the yen on Monday as traders awaited Federal Reserve Chair Jerome Powell's comments later this week. Powell’s speech at Jackson Hole on Friday will be closely watched to see if he hints at a 25 or 50 basis point rate cut. The likelihood of a larger cut has diminished following last week’s hotter-than-expected shelter inflation data and a strong retail sales report for July. Another key point of interest will be whether Powell suggests rate cuts could continue at each upcoming meeting, though markets may be overestimating the pace and extent of the Fed’s actions.The dollar weakened 0.62% to 146.66 Japanese yen after earlier reaching 145.20, the lowest since Aug. 7. Strong resistance can be seen at 148.22(38.2 %fib), an upside break can trigger rise towards 149.23(Aug 15th high). On the downside, immediate support is seen at 145.17(23.6 %fib), a break below could take the pair towards 145.00(Psychological level).
Equities Recap
European shares rose on Monday, driven by gains in retail and basic resources stocks, as investors prepared for a data-heavy week, with particular attention on U.S. Federal Reserve Chair Jerome Powell's upcoming speech at Jackson Hole for insights into potential rate cuts.
UK's benchmark FTSE 100 closed up by 0.55 percent, Germany's Dax ended up by 0.54 percent, France’s CAC finished the day up by 0.70 percent.
U.S. stocks advanced on Monday as investors turned their attention to the Democratic National Convention and the upcoming Jackson Hole Economic Symposium.
Dow Jones closed up by 0.58% percent, S&P 500 closed up by 0.97% percent, Nasdaq settled up by 1.37% percent.
Commodities Recap
Gold remained subdued on Monday after breaking through the $2,500 mark in the previous session, as investors took profits from the record surge and awaited further signals from the U.S. Federal Reserve and developments in the Middle East.
Spot gold was down 0.2% at $2,501.74 per ounce as of 01:41 p.m. ET (1741 GMT), shy of the record high of $2,509.65 hit on Friday. U.S. gold futures settled 0.1% higher at $2,541.30.
Oil prices dropped by over $2 a barrel on Monday as the prospect of successful Middle Eastern peace talks reduced supply risks, while economic weakness in leading oil importer China raised concerns about reduced demand.
Brent crude futures settled at $77.66 a barrel, dropping $2.02, or 2.5%. U.S. West Texas Intermediate crude futures settled at $74.37 a barrel, falling $2.28, or 3%.
