Market Roundup
•Japan Manufacturing PMI (Sep) 49.6,49.9 forecast,49.8 previous
•Japan Services PMI (Sep) 53.9 53.7 previous
•RBA Interest Rate Decision (Sep) 4.35%, 4.35% forecast, 4.35% previous
Looking Ahead Economic Data(GMT)
•08:00 German Business Expectations (Sep) 86.3 forecast, 86.8 previous
•08:00 German Current Assessment (Sep) 86.1 forecast, previous, 86.5
•08:00 German Ifo Business Climate Index (Sep) 86.1 forecast, 86.6 previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro declined against the dollar on Tuesday as a soft business activity reading strengthened the case for more monetary policy easing by the European Central Bank this year. Euro zone business activity contracted sharply and unexpectedly this month as the bloc's dominant services industry flatlined while a downturn in manufacturing accelerated, a survey showed on Monday. HCOB's preliminary composite euro zone Purchasing Managers' Index (PMI), compiled by S&P Global, sank to 48.9 this month from August's 51.0, below the 50 mark that separates growth from contraction for the first time since February.A poll predicted a modest decline to 50.5.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: Sterling strengthened against the dollar on Tuesday as diverging rate expectations between the UK and the U.S favored sterling. UK core inflation rose to 3.6% from 3.3% in August, and may have figured into the BoE's decision to keep rates steady on Sept. 19.U.S. core inflation remained steady at 3.2% in August, having fallen consistently, from 3.9% in January 2024, which likely emboldened the Fed to jumpstart its rate-cutting regime with a supersized 50bp cut.Given expectations of a faster and deeper pace of Fed cuts in 2024 and 2025. Immediate resistance can be seen at 1.3368(23.6%fib), an upside break can trigger rise towards 1.3394(Higher BB).On the downside, immediate support is seen at 1.3334(Daily low), a break below could take the pair towards 1.3284(38.2%fib% ).
AUD/USD: The Australian dollar remained close to nine-month highs on Tuesday after the Reserve Bank of Australia (RBA) kept interest rates steady at 4.35% for the seventh consecutive meeting, reiterating a hawkish stance. Sentiment was further boosted by new stimulus measures from China's central bank, which cut reserve requirements and lending rates, including those for existing home loans. The Reserve Bank of Australia (RBA) kept its cash rate at 4.35% for a seventh consecutive meeting and repeated policy would need to stay restrictive to ensure inflation slowed. The Aussie stood at $0.6864 , after reaching its highest for the year so far at $0.6865. Immediate resistance can be seen at 0.6865(23.6%fib), an upside break can trigger rise towards 0.6891(Higher BB).On the downside, immediate support is seen at 0.6815(Daily low), a break below could take the pair towards 0.6794(38.2%fib).
NZD/USD: New Zealand dollar edged higher against greenback on Tuesday as increased risk sentiment , higher commodities price and China's stimulus measures boosted kiwi dollar . China's central bank unveiled comprehensive monetary stimulus and property market support measures to combat strong deflationary pressures in the economy. Governor Pan Gongsheng announced a 50 basis point cut in banks' reserve requirement ratios and further reductions in key interest rates, with additional policy easing expected later this year . Immediate resistance can be seen at 0.6284(38.2%fib), an upside break can trigger rise towards 0.6313(Higher BB).On the downside, immediate support is seen at 0.6239(Aug 29th low), a break below could take the pair towards 0.6219(38.2%fib).
USD/JPY: The dollar edged higher against the yen on Tuesday as dollar was supported after data showed US business activity remained steady in September.S&P Global said its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, was little changed at 54.4 this month compared to a final figure of 54.6 in August, with a reading above 50 signaling expansion.The data comes after the Federal Reserve cut rates by an outsized 50 basis point cut last week, which several officials commented on Monday that the move was intended to sustain an emerging and healthy balance in the economy. 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
Japan's Nikkei share average climbed to a three-week closing high on Tuesday as rise was supported by overnight gains on Wall Street and recent dovish comments from the Bank of Japan last week, which boosted investor sentiment.
The Nikkei ended 0.57% higher at 37,940.59, its highest close since Sept. 3
Commodities Recap
Oil prices climbed on Tuesday following news of new monetary stimulus from top importer China, alongside worries that escalating tensions in the Middle East could disrupt supply from this key region.
Brent crude futures for November were up 69 cents, or 0.93%, at $74.59 a barrel at 0330 GMT. U.S. WTI crude futures for November rose 74 cents, or 1.05%, to $71.11.
Gold prices held their ground on Tuesday, after hitting an all-time high in the previous session, following comments by U.S. Federal Reserve officials that backed additional interest rate cuts in the future.
Spot gold was steady near $2,625.52 per ounce, as of 0023 GMT. Bullion hit a record high of $2,635.29 on Monday. U.S. gold futures edged 0.1% lower to $2,650.30.
