Market Roundup
• Singapore Jul Industrial Production 10.1%, -4.3% previous
• Singapore Jul Industrial Production (YoY) 1.8%, -1.1%forecast, -4.3% previous
Looking Ahead Economic Data (GMT)
• 06:30 Swiss Employment Level (Q2) 5.484M previous
• 07:00 Spanish Jul PPI (YoY) -3.5% previous
•08:00 German Aug Business Expectations 86.5 forecast,86.9 previous
• 08:00 German Aug Current Assessment 86.5 forecast, 87.1 previous
• 08:00 German Aug Ifo Business Climate Index 86.0 forecast, 87.0 previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro traded flat against the dollar on Monday after Federal Reserve Chair Jerome Powell all but confirmed that the U.S. central bank would opt for a rate cut next month.The fallout from the Federal Reserve's Jackson Hole Economic Policy Symposium will likely dominate market sentiment on Monday and shape rate expectations in a relatively light week for top-tier data.Federal Reserve Chair Jerome Powell on Friday endorsed an imminent start to interest rate cuts The time has come for policy to adjust. Key data this week include the euro zone's final August consumer confidence, the flash HICP (Harmonized Index of Consumer Prices), and Germany's Q2 GDP, CPI (Consumer Price Index), and Ifo business climate survey. The euro was little changed at $1.1190, not far from its Friday high of $1.1201, a level last seen in July of last year. Immediate resistance can be seen at 1.1184(Daily high), an upside break can trigger rise towards 1.1200(Higher BB).On the downside, immediate support is seen at 1.1098(38.2%fib), a break below could take the pair towards 1.1070 (Aug 20th low).
GBP/USD: The British eased slightly on Monday as investors awaited US inflation data, hoping it will lead to rate cuts in the United States. Last week, Powell hinted that the world's most influential central bank would pivot towards a rate cut in September, sending the dollar lower .Fed fund futures are fully priced for a quarter-point cut at the Sept. 18 meeting, and imply a 38% chance of an outsized move of 50 basis points . The BoE's Bailey also spoke at Jackson Hole, cementing the British central bank's position as less dovish than the Fed and European Central Bank .Sterling eased slightly to $1.31995 after jumping as high as $1.32295 on Friday for the first time in 17 months .Immediate resistance can be seen at 1.3107(23.6%fib), an upside break can trigger rise towards 1.3128(Higher BB).On the downside, immediate support is seen at 1.3006(38.2%fib), a break below could take the pair towards 1.2936(50%fib).
AUD/USD: The Australian dollar hovered near its 2024 high, driven by expectations that the U.S. central bank will cut interest rates next month.The anticipated Federal Reserve rate cut has fueled speculation that the RBA could also reduce rates as early as November, with the chances now estimated at around 50-50. Australia's July CPI report on Wednesday will be crucial for shaping Reserve Bank of Australia rate expectations, as the central bank maintains its higher-for-longer rates stance while highlighting potential inflationary risks. Additionally, the Q2 capital expenditure data and the final July retail sales figures will also be released. Immediate resistance can be seen at 0.6799 (23.6%fib), an upside break can trigger rise towards 0.6829(Higher BB).On the downside, immediate support is seen at 0.6733 (July 10th low), a break below could take the pair towards 0.6705(38.2%fib).
USD/CNY stayed near a three-week low, continuing to weaken due to the greenback's broad decline following Fed Chair Jerome Powell's dovish stance. Looking ahead there is moderate U.S. event risk, including July durable goods orders, August consumer confidence, the second estimate of Q2 GDP, and weekly jobless claims. On Friday, key releases will include the University of Michigan sentiment index, inflation expectations, and the U.S. core PCE price index. The Chinese yuan retreated slightly to 7.1202 per dollar , after beginning the day by rising as much as 0.13% to 7.1069, the strongest level since Aug. 5.Strong resistance can be seen at 7.1254 (Daily high), an upside break can trigger rise towards 7.1361 (50%fib). On the downside, immediate support is seen at 7.1132 (23.6%fib) , a break below could take the pair towards 7.1100 (Psychological level).
USD/JPY: The dollar fell to three week low against the yen on Monday as Federal Reserve Chair Jerome Powell's emphatic dovish shift contrasted sharply with Bank of Japan chief Kazuo Ueda's steadfastly hawkish tone. Earlier on Friday, during parliamentary testimony in Tokyo, Ueda reaffirmed the Bank of Japan's need to adjust its level of easing and indicated that a further increase in the policy rate from its current low level might be necessary. He also downplayed the impact of the July rate hike on market volatility. Key data releases will lead with the services PPI on Tuesday. This will be followed by Tokyo CPI for August, along with preliminary industrial output, employment figures, and retail sales on Friday. Strong resistance can be seen at 145.00(Psychological level), an upside break can trigger rise towards 146.56(38.2 %fib). On the downside, immediate support is seen at 143.56(23.6 %fib), a break below could take the pair towards 142.45(Lower BB).
Equities Recap
South Korea’s index dropped by 0.2%, while Chinese blue chips declined by 0.4%. Japan’s Nikkei fell by 0.8%, as a stronger yen put pressure on exporter stocks
Commodities Recap
Gold prices remained steady on Monday , buoyed by a weaker dollar and lower Treasury yields following dovish remarks from U.S. Federal Reserve Chair Jerome Powell, which solidified expectations for a September rate cut.
Spot gold was unchanged at $2,510.75 per ounce as of 0544 GMT, following a gain of over 1% in the previous session. Meanwhile, U.S. gold futures held steady at $2,545.90.
Oil prices rose by 0.7% following rocket exchanges and air strikes between Israel and Hezbollah on Sunday, raising concerns about potential supply disruptions if the conflict intensifies.
Brent rose 51 cents to $79.52 a barrel, while U.S. crude added 50 cents to $75.33 per barrel.
