Market Roundup
•Japan Household Spending (MoM) (Aug): 2.0%, 0.5% forecast, -1.7% previous
•Japan Household Spending (YoY) (Aug): -1.9%, 0.5% forecast, 0.1% previous
• Japan Overall Wage Income of Employees (Aug): 3.0%, 3.0% forecast, 3.4% previous
•Japan Overtime Pay (YoY) (Aug): 2.60%, -2.50% forecast, -0.20% previous
•Japan Adjusted Current Account (Aug): 3.02T, 2.43T forecast, 2.80T previous
•Japan Current Account n.s.a. (Aug): 3.804T, 2.921T forecast, 3.193T previous
•Australia NAB Business Confidence (Sep): -2, -5 previous
•Australia NAB Business Survey (Sep): 7, 3 previous
Looking Ahead Economic Data(GMT)
• 07:00 Sweden CPIF (CPI at constant interest rates) (YoY) (Sep) 1.2% previous
• 07:00 Sweden CPIF (CPI at constant interest rates) (MoM) (Sep) -0.5% previous
Looking Ahead Events And Other Releases(GMT)
• 07:00 ECB's Schnabel Speaks
•10:15 ECB McCaul Speaks
Currency Forecast
EUR/USD: The euro rose against the dollar on Tuesday as investors assessed the prospects for US interest rates following a solid jobs report that dashed hopes for big rate cuts. Alberto Musalem, President of the Federal Reserve Bank of St. Louis, indicated support for additional rate decreases, emphasizing the need for the Fed to be cautious with monetary easing as the economy grows. This week, investors are looking forward to the inflation report due on Thursday and the Fed's September meeting minutes, which will be released on Wednesday. The euro traded at $1.09865, close to last week's seven-week low of $1.09515. Immediate resistance can be seen at 1.1005(38.2%fib), an upside break can trigger rise towards 1.1053(50%fib).On the downside, immediate support is seen at 1.0944(23.6%fib), a break below could take the pair towards 1.0920 (Lower BB).
GBP/USD: Sterling steadied on Tuesday as investors readjusted their views for the path of interest rates from the Federal Reserve. Friday's stronger-than-expected U.S. payrolls report fueled expectations the Fed will dial back its aggressiveness in cutting interest rates. Expectations for a Fed rate cut of 25 basis points (bps) at the central bank's November meeting stand at 84.6%, with the market pricing in a 15.4% chance it will hold rates steady, according to CME's FedWatch Tool. Immediate resistance can be seen at 1.3127(38.2%fib), an upside break can trigger rise towards 1.3188(50%fib).On the downside, immediate support is seen at 1.3064(23.6%fib), a break below could take the pair towards 1.3000(Psychological level).
AUD/USD: The Australian dollar fell against dollar on Tuesday as the Reserve Bank of Australia adopted a slightly dovish outlook. The RBA issued the minutes from its September policy meeting, which outline variables that could lead to a future rate drop, including a slowing economy and a weaker labor market. Furthermore, optimism was depressed by a slowing rally in Chinese markets, disappointing investors looking for further information on Beijing's fresh stimulus package. The Aussie fell 0.3% to $0.6736, having lost 0.5% overnight. It is down 2.2% in the past four sessions. Immediate resistance can be seen at 0.6767(38.2%fib), an upside break can trigger rise towards 0.6837(23.6%fib).On the downside, immediate support is seen at 0.6711 (50%fib), a break below could take the pair towards 0.6663(61.8%fib).
USD/JPY: The dollar steadied against the yen on Tuesday as investors focused on the escalating conflict in the Middle East and anticipated US inflation data. Investor focus this week will be on the inflation report due on Thursday as well as the minutes of the Fed's September meeting scheduled to be released on Wednesday.On the data front, real earnings in Japan, the world's fourth-largest economy, decreased 0.6% in August from the same month previous year. At 05:14 GMT, the pair was down 0.12% to 148.00, having recovered from a day low of 147.65. Strong resistance can be seen at 148.24(Daily high), an upside break can trigger rise towards 149.18(23.6 %fib). On the downside, immediate support is seen at 147.61(38.2 %fib), a break below could take the pair towards 147.00(Psychological level).
Equities Recap
Japan's Nikkei share average snapped a three-day winning streak to close lower on Tuesday as a stronger yen and Wall Street's weaker finish overnight weighed on sentiment.
The Nikkei N225 fell 1% to close at 38,937.54, after rising 1.8% on Monday. The index has jumped 4% over the last three sessions.
Commodities Recap
Oil prices fell more than $1 a barrel on Tuesday as traders took profits from a rally in the previous session that lifted the market to its highest level in over a month on fears the Middle East could be on the brink of a region-wide war.
Brent crude futures fell $1.31, or 1.6%, to $79.62 per barrel at around 0600 GMT. U.S. West Texas Intermediate futures fell $1.29, or 1.7%, to $75.85 a barrel.
Gold prices were little changed on Tuesday as market participants awaited the minutes of the latest Federal Reserve policy meeting and economic data for insights on the U.S. interest rate path.
Spot gold was flat at $2,639.45 per ounce by 0530 GMT.U.S. gold futures lost 0.2% to $2,661.80.
