Market Roundup
• US New Home Sales (Aug) 716K, forecast 699K, previous: 751K previous
• US New Home Sales (MoM) (Aug) -4.7%, 10.3% previous
• US Crude Oil Inventories -4.471M, forecast -1.300M, -1.630M previous
• US EIA Refinery Crude Runs (WoW) -0.124M, -0.282M previous
• US Crude Oil Imports 0.826M, previous -1.829M previous
•US Cushing Crude Oil Inventories: 0.116M, -1.979M previous
• US Distillate Fuel Production -0.158M, -0.153M previous
Looking Ahead Economic Dtaa(GMT)
•23:50 Japan Foreign Bonds Buying 2,100.1B previous
•23:50 Japan Foreign Investments in Japanese Stocks -3,005.8B previous
Looking Ahead Events and Other Rleases(GMT)
•02:30 Australia RBA Financial Stability Review
Currency Summaries
EUR/USD: The euro fell on Wednesday as the dollar rebounded, with investors betting on another significant interest rate cut from the Federal Reserve at its November meeting amid weakening labor optimism. Data revealed that new U.S. single-family home sales declined less than expected in August. Traders are now pricing in a 59% likelihood of a 50-basis point cut at the Fed’s Nov. 7 meeting, up from 37% a week ago, along with a 41% chance of a 25-basis point reduction, according to CME Group’s FedWatch Tool. The euro was last down 0.41% at $1.1134, after earlier hitting $1.1214, the highest level since July 2023. Immediate resistance is noted at 1.1198 (23.6%fib), with a breakout potentially pushing the pair towards 1.1218 (Higher BB). On the downside, immediate support is at 1.1111 (38.2%fib), a drop below this level could lead the pair towards 1.1049(50%fib).
GBP/USD: The pound declined against the dollar on Wednesday as investors maintained their belief that the Federal Reserve can achieve a soft landing for the U.S. economy. Data showing a drop in new home sales for August had minimal market impact. Additionally, Tuesday’s report revealed the largest decline in U.S. consumer confidence in three years for September, raising concerns about the labor market. Last week, the U.S. central bank initiated a series of expected interest rate cuts with a significant half-percentage-point reduction.Traders are now pricing in 59% odds of a 50-basis point cut at the Fed’s Nov. 7 meeting, up from 37% a week ago, and a 41% chance of a 25 basis point reduction, according to the CME Group’s FedWatch Tool. Immediate resistance can be seen at 1.3417(23.6%fib), an upside break can trigger rise towards 1.3449(Higher BB).On the downside, immediate support is seen at 1.3335(38.2%fib), a break below could take the pair towards 1.3274(50%fib).
AUD/USD: The Australian dollar dipped on Wednesday following data showing that domestic consumer prices slowed to a three-year low in August. Consumer price inflation fell to 2.7%, down from 3.5% in July, largely due to government rebates on electricity. Core inflation also reached its lowest level since early 2022, suggesting positive progress that could pave the way for potential rate cuts, data from the Australian Bureau of Statistics was in line with market expectations. The Aussie was last down 0.99% at $0.6823. It earlier hit $0.6908, the highest since February 2023.Immediate resistance can be seen at 0.6902(23.6%fib), an upside break can trigger rise towards 0.6927(Higher BB).On the downside, immediate support is seen at 0.6836(38.2%fib), a break below could take the pair towards 0.6814(Sep 24th low).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Wednesday, with the currency pulling back from an earlier six-month high as the boost to investor sentiment from China's stimulus package lost some momentum.The U.S. dollar rallied against a basket of major currencies, including the euro, as data showed sales of new U.S. single-family homes fell less than expected in August. Investors awaited further economic indicators and signals on upcoming interest rate cuts. The Federal Reserve and the Bank of Canada have begun easing campaigns. The loonie was trading 0.3% lower at 1.3470 to the U.S. dollar, or 74.24 U.S. cents, after touching its strongest intraday level since March 8 at 1.3420.Immediate resistance can be seen at 1.3624 (38.2%fib), an upside break can trigger rise towards 1.3692(23.6%fib).On the downside, immediate support is seen at 1.3627(50%fib), a break below could take the pair towards 1.3511 (61.8%fib).
USD/JPY: The dollar strengthened against the yen on Wednesday, boosted by quarter-end flows, as slumping oil prices, rising Treasury yields, and ongoing geopolitical tensions impacted investor sentiment. Sales of new U.S. single-family homes fell in August, but declining mortgage rates and house prices may boost demand in the coming months. Investors are closely monitoring this week’s U.S. weekly jobless claims, set for Thursday, and the personal consumption expenditures price index due Friday. The greenback rose 1.03% to 144.68 yen, reaching a peak of 144.75, the highest level since September 3rd. Strong resistance can be seen at 144.73 (38.2%fib), an upside break can trigger rise towards 145.00 (psychological level). On the downside, immediate support is seen at 141.70(23.6%fib), a break below could take the pair towards 140.36(Lower BB).
Equities Recap
Europe's STOXX 600 closed slightly lower on Wednesday, driven by energy stocks tracking declining crude oil prices, while Germany's SAP fell amid news of a U.S. investigation into price-fixing claims against the software developer.
UK's benchmark FTSE 100 closed up by 0.36 percent, Germany's Dax ended up by 0.68 percent, France’s CAC finished the day up by 0.10 percent.
The Dow Jones Industrial Average and S&P 500 closed lower on Wednesday, pulling back from recent record highs driven by China's extensive stimulus package, as investors awaited economic indicators and clues about potential interest rate cuts.
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Dow Jones closed up by 0.70% percent, S&P 500 closed down by 0.19% percent, Nasdaq settled up by 0.06% percent.
Commodities Recap
Gold rose to a record high as expectations for another big rate cut by the Fed helped bullion's rally.
Spot gold gained 0.2% to $2,662.00 per ounce by 1750 GMT after hitting an all-time high of $2,670.43 earlier.
Oil prices fell more than 2% on Wednesday as concerns over supply disruptions in Libya eased, while demand worries persisted despite China's latest stimulus measures.
Brent crude futures fell $1.71, or 2.27%, to settle at $73.46 a barrel. U.S. West Texas Intermediate crude slipped $1.87, or 2.61%, to settle at $69.69 per barrel.
