Market Roundup
• French 12-Month BTF Auction 2.997% ,2 .9999 previous
•French 3-Month BTF Auction 3.462% ,3.372% previous
•French 6-Month BTF Auction 3.308% ,3.285% previous
Looking Ahead Economic Data (GMT)
•23:50 Japan Aug Monetary Base (YoY) 0.6% forecast, 1.2% previous
• 01:30 Australia Current Account (Q2) -5.0B forecast, -4.9B previous
• 01:30 Australia Net Exports Contribution (Q2) 0.6% forecast, -0.9% previous
• 03:35 Japan 10-Year JGB Auction 0.926% previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Summaries
EUR/USD: The euro edged higher against the dollar on Monday, but gains were capped as investors focused on the upcoming U.S. jobs report due at the end of the week. The payrolls data, set to be released on Friday, will be critical following Federal Reserve Chair Jerome Powell's shift from combating inflation to safeguarding against job losses. On the political front in Europe, projections indicated that the Alternative for Germany (AfD) party is poised to become the first far-right group to win a regional election in Germany since World War II, potentially granting it unprecedented influence, although other parties are likely to exclude it from power. The euro strengthened by 0.2% to $1.1060, recovering from a low of $1.1043, its lowest level since August. 19.Immediate resistance can be seen at 1.1128(23.6%fib), an upside break can trigger rise towards 1.1185(Aug 28th high).On the downside, immediate support is seen at 1.1030(38.2%fib), a break below could take the pair towards 1.0968 (50%fib).
GBP/USD: Sterling edged higher against the dollar on Monday as investors prepared for a busy month of central bank policy decisions, with key domestic and international data on the horizon. Trading volumes are expected to be light due to holidays in the United States and Canada. U.S. employment data, including the August payrolls report, could influence the extent of the likely September interest rate cut by the Federal Reserve. In the UK, investors will be watching for the Purchasing Managers' Index (PMI) and housing data this week, while producer prices and retail sales are among the crucial data points on their European radar. Immediate resistance can be seen at 1.3284(23.6%fib), an upside break can trigger rise towards 1.3315(Higher BB).On the downside, immediate support is seen at 1.3115(38.2%fib), a break below could take the pair towards 1.3052(50%fib).
AUD/USD: the Australian dollar strengthened against dollar on Monday as investors awaited the June-quarter GDP report to assess future interest rate moves. This report, due this week, could influence the Reserve Bank of Australia's decisions when they meet later this month. The GDP data set to be released on Wednesday is expected to show a modest growth of 0.3% for the second quarter, following a 0.1% increase in the March quarter. While subdued growth has been largely anticipated, a weaker-than-expected figure could influence rate decisions. The Aussie was trading at $0.6785 after reaching an eight-month high of $0.6823. Immediate resistance can be seen at 0.6785(Daily high), an upside break can trigger rise towards 0.6826(Daily high).On the downside, immediate support is seen at 0.6751(38.2%fib), a break below could take the pair towards 0.6699(50%fib).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Monday as investors focused on upcoming Bank of Canada rate decison.The Bank of Canada is expected to cut rates by 25 basis points for the third consecutive meeting on Wednesday, bringing the key policy rate to 4.25%. Market expectations currently price in a 20% chance of a 50 basis point cut at this meeting, as well as 75 basis points of easing by the end of the year equivalent to three rate cuts in the upcoming meetings. Despite this, the bar for a dovish surprise remains high. Economic data has generally supported an additional rate cut, with inflation continuing to drift lower; the headline rate has dropped 0.2 percentage points to 2.5%. Additionally, the bank’s preferred measures of underlying inflation the three-month annualized median and trimmed mean CPI have halted their recent rise, decreasing from 2.9% to 2.7% .Immediate resistance can be seen at 1.3500 (38.2%fib), an upside break can trigger rise towards 1.3548(50%fib).On the downside, immediate support is seen at 1.4047 (9 DMA), a break below could take the pair towards 1.3392 (55 DMA).
USD/JPY: The dollar strengthened against the yen after data showed Japan's factory activity slowed in August. Japan’s factory activity contracted at a slower pace in August thanks to a recovery in output and new orders, a private-sector survey showed on Monday, offering some hope for an economy that is starting to find its feet.The final au Jibun Bank Japan manufacturing purchasing managers' index (PMI) rose to 49.8 in August versus 49.1 in July, and was up from 49.5 reported in the flash reading. It remained below the 50.0 threshold that separates growth from contraction for two straight months. The dollar rose as much as 0.05% to 146.26 yen. Strong resistance can be seen at 146.67(38.2 %fib), an upside break can trigger rise towards 147.00(Psychological level). On the downside, immediate support is seen at 143.95(23.6 %fib), a break below could take the pair towards 142.51(Lower BB).
Equities Recap
European shares were largely unchanged on Monday as investors assessed economic data for clues about the European Central Bank's policy direction. Meanwhile, Germany's DAX index achieved a record closing level.
UK's benchmark FTSE 100 closed down by 0.15 percent, Germany's Dax ended up by 0.13 percent, France’s CAC finished the day up by 0.20 percent.
US stock market is closed on account of US labour day
Commodities Recap
Gold prices slid 1% on Monday as investors took profits, shifting their focus to upcoming inflation data this week that could offer clues about potential U.S. interest rate cuts for the remainder of the year.
Spot gold fell 1% to $2,336.76 per ounce by 1745 GMT. It had hit its highest level since April 22 on Friday.U.S. gold futures settled 1.3% lower at $2,343.
Oil prices edged up on Monday, regaining some of the losses from late last week, as Libyan oil exports stayed halted and concerns over increased OPEC+ production in October eased.
By 1924 GMT, U.S. West Texas Intermediate crude had risen by 49 cents, or 0.7%, to $74.04 per barrel, while Brent crude futures settled 59 cents, or 0.8%, higher at $77.52 per barrel.
