America’s Roundup: Dollar plummets on rate cut expectations, Wall Street ends mixed, Oil prices climb

Market Roundup

• US Sep NY Empire State Manufacturing Index 11.50,-4.10 forecast, -4.70 previous

• Canada Manufacturing Sales (MoM) (Jul) 1.4%, forecast 0.7%, previous -2.1%

 • Canada New Motor Vehicle Sales (MoM) (Jul) 169.0K, previous 166.0K

• French 12-Month BTF Auction 2.823%, previous 2.859%

•  French 3-Month BTF Auction 3.397%, previous 3.396%

 •  French 6-Month BTF Auction 3.227%, previous 3.258%

 • US 3-Month Bill Auction 4.750%, previous 4.895%

• US  6-Month Bill Auction 4.410%, previous 4.530%

Looking Ahead Economic Data (GMT)  

•04:30 Japan Tertiary Industry Activity Index (MoM) (Jul) 0.8% forecast -1.3% previous 

• 04:30 JapanTertiary Industry Activity Index (Jul)  1.40   previous

Looking Ahead Events And Other Releases(GMT)

•No Events Ahead

Currency Summaries

EUR/USD: The euro strengthened against the dollar on Monday, driven by a weakening dollar and expectations of a significant interest rate cut by the U.S. Federal Reserve later this week. Fed fund futures suggest a 59% chance of a 50-basis point cut at the September meeting, with traders expecting a total of 125 basis points in rate cuts for 2024, according to CME FedWatch.Looking ahead, Eurozone data releases will include the final August HICP, flash September consumer confidence, and the German ZEW survey. Several European Central Bank officials, including President Lagarde, are also scheduled to speak. Immediate resistance is noted at 1.1111 (32% Fibonacci retracement), with a breakout potentially pushing the pair towards 1.1157 (September 6th high). On the downside, immediate support is at 1.1044 (daily low); a drop below this level could lead the pair towards 1.0983 (50% Fibonacci retracement).

GBP/USD: The British pound gained against the dollar on Monday  as attention turned to this week's UK inflation data and the central bank meeting. The Bank of England (BoE) is expected to hold interest rates steady after a 25-basis-point cut last month. However, futures markets on Monday suggested a higher chance of a further 25-basis-point cut, with odds at about 38% compared to 20% on Friday.Inflation data, due for release on Wednesday, will be crucial ahead of the BoE's policy decision, following last week's figures from the Office for National Statistics that revealed unexpected economic stagnation in July. Sterling rose by 0.5% to $1.3190, up from $1.3125 at Friday's close. Immediate resistance can be seen at 1.3178(38.2%fib), an upside break can trigger rise towards 1.3223(Aug 29th high).On the downside, immediate support is seen at 1.3092(38.2%fib), a break below could take the pair towards 1.3052(61.8%fib).

USD/CAD: The Canadian dollar steadied against its U.S. counterpart on Monday as investors awaited domestic inflation data and an interest rate decision by the Federal Reserve.The Bank of Canada has said it could increase the size of rate cuts if the economy needs a boost. Since June, the central bank has lowered its benchmark rate three times by a quarter-percentage-point to leave it at 4.25%.Canadian home sales rose 1.3% in August from July but were down 2.1% on an annual basis.Canada's consumer price index report, due on Tuesday is expected to show inflation slowing to an annual rate of 2.1% in August from 2.5% in July. The price of oil, one of Canada's major exports, settled 2.1% higher at $70.09 a barrel, extending its rebound from a recent 16-month low. Immediate resistance can be seen at 1.3617(50% fib), an upside break can trigger rise towards 1.3670(61.8% fib).On the downside, immediate support is seen at 1.3565(38.2% fib), a break below could take the pair towards 1.3495 (50% fib).

USD/JPY: The dollar fell to a more than one-year low against the yen on Monday as anticipation built for a Federal Reserve meeting later this week, expected to mark the start of a highly anticipated easing cycle. Expectations have increased that the Federal Reserve might cut interest rates by up to half a point more than initially anticipated—to support a soft economic landing amid slowing job growth and moderating inflation. The decision is scheduled for Wednesday . The dollar index , which measures the greenback against a basket of currencies, fell 0.33% at 100.69. Against the Japanese yen , the dollar sagged 0.13% at 140.63.Top of FormBottom of FormStrong resistance can be seen at 141.31(Daily high), an upside break can trigger rise towards 142.20(38.2%fib). On the downside, immediate support is seen at 140.00 (Psychological level), a break below could take the pair towards 139.66(Lower BB).

Equities Recap

European shares  slightly lower on Monday as losses in heavyweight technology shares weighed on the index, while the focus remained on the U.S. Federal Reserve, which is widely expected to kick off its policy easing cycle this week.

UK's benchmark FTSE 100 closed up by 0.06 percent, Germany's Dax ended down  by 0.35 percent, France’s CAC finished the day down by 0.21 percent.

U.S. stock indexes were   mixed   on Monday as caution set in on Wall Street ahead of the Federal Reserve's pivotal monetary policy decision, due later in the week .

Dow Jones closed up by  0.55% percent, S&P 500 closed up by 0.13% percent, Nasdaq settled down by 0.51%  percent.

Treasuries Recap

Yields on short-dated U.S. debt hit their lowest level in two years at one point on Monday. The return on the rate-sensitive two-year note was last 1.7 basis points lower on the day, continuing a slide this month.

Benchmark 10-year yields shrank for a second straight session, shedding 3.1 basis points to 3.618%, from 3.649% late on Friday.

Commodities Recap

Oil prices rose on Monday as the continued impact of Hurricane Francine on U.S. Gulf of Mexico output outweighed ongoing concerns about Chinese demand, with investors awaiting this week's  U.S. Federal Reserve interest rate cut decision

Brent crude futures for November settled at $72.75 a barrel, up $1.14, or 1.59%. U.S. crude futures for October settled at $70.09, up $1.44, or 2.1%.