Market Roundup
•Japan National Core CPI (YoY) (Aug) 2.8%, 2.8%forecast, 2.7% previous
•Japan National CPI (YoY) (Aug) 3.0%, 2.8% previous
•Japan National CPI (MoM) (Aug) 0.5%, 0.2% previous
•Japan CPI, n.s.a (MoM) (Aug) 0.5% ,0.4% previous
•Japan Foreign Bonds Buying 2,100.1B, -216.5B previous
•Japan Foreign Investments in Japanese Stocks -3,005.8B forecast, -902.3B previous
•China PBoC Loan Prime Rate (Sep) 3.85% ,3.85% forecast, 3.85% previous
•China PBoC Loan Prime Rate 3.35%, 3.35% forecast, 3.35% previous
•Japan BoJ Interest Rate Decision 0.25%, 0.25% forecast, 0.25% previous
•New Zealand Credit Card Spending (YoY) (Aug) -3.1%, -3.7% previous
Looking Ahead Economic Data (GMT)
• 08:00 Spanish Trade Balance (Jul) -0.71Bprevious
• 09:00 Belgium Consumer Confidence (Sep) -3previous
• 09:00 Greek Current Account (YoY) (Jul) 0.271B previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro continued to strengthen against the greenback on Friday, following the U.S. Federal Reserve's recent significant interest rate cut. With a larger-than-usual move on Wednesday, the U.S. central bank shifted its approach after maintaining borrowing costs at decades-high levels to combat inflation. Fed Chair Jerome Powell stated he did not foresee significant risks of a slowdown, and policymakers indicated that the benchmark rate is expected to decline again, as shown in a closely monitored tool known as the dot plot.On the data front, Jobless claims for the week ended Sept. 14 came in lower than the market expected, with data showing the number of Americans filing new applications for unemployment benefits dropped to a four-month low. 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 reached its highest level against the dollar since March 2022 after the Bank of England held rates steady on Thursday and extended its bond reduction plan. The Bank maintained interest rates at 5.0%, emphasizing caution regarding future cuts, and opted not to accelerate the reduction of its bond holdings, alleviating potential budget pressures for Finance Minister Rachel Reeves. UK rates are now expected to come down at a slower pace than in the euro zone and the United States. The Fed eased interest rates by a larger-than-usual 50 basis points on Wednesday, with Chair Jerome Powell citing easing inflation and a need to support the labour market. The pound was up 1.2% for the week so far at $1.3320 , having hit its highest since March 2022. Immediate resistance can be seen at 1.3331(23.6%fib), an upside break can trigger rise towards 1.3361(Higher BB).On the downside, immediate support is seen at 1.3278(Daily low), a break below could take the pair towards 1.3196(38.2%fib%fib).
USD/CNY: The dollar fell to nearly a 16-month low against the Chinese yuan on Friday, driven by expectations that Beijing will introduce new economic stimulus following a significant U.S. rate cut. The yuan is also gaining support from signs of rising corporate demand, as more exporters settle their foreign exchange receipts, a trend that could accelerate further. The Chinese currency has appreciated by about 3% since late July, recovering its first-half losses, as the dollar weakened amid expectations of U.S. rate reductions. The Fed implemented a larger-than-usual 50-basis-point cut on Wednesday. Strong resistance can be seen at 7.064 (38.2 %fib), an upside break can trigger rise towards 7.086 (50 %fib). On the downside, immediate support is seen at 7.039(23.6 %fib), a break below could take the pair towards 7.000(Psychological level).
NZD/USD: New Zealand dollar edged higher against greenback on Friday as the prospect of further aggressive policy easing by central banks boosted risk sentiment.The U.S. Federal Reserve began its rate-cutting cycle with a significant 50-basis-point reduction. Reserve Bank of New Zealand, which surprised many by starting its easing campaign in August with a quarter-point cut to 5.25%.The market is fully priced for another quarter-point rate cut in October, with a 41% chance of a 50-basis-point cut. Swaps indicate 85 basis points of easing expected by Christmas, projecting rates at 2.87% by the end of 2025.The kiwi dollar stood at $0.6234 against greenback, after reaching $0.6269 overnight, marking a 1.3% increase for the week. Immediate resistance can be seen at 0.6203(38.2%fib), an upside break can trigger rise towards 0.6277(23.6%fib).On the downside, immediate support is seen at 0.6144(50%fib), a break below could take the pair towards 0.6121(Lower BB).
USD/JPY: The dollar edged higher against the yen on Friday after Bank of Japan held rates steady and stayed upbeat on the economy. The Bank of Japan kept interest rates steady on Friday and revised up its assessment on consumption, signaling its confidence a solid economic recovery will allow the central bank to raise interest rates again in coming months.As widely expected, the BOJ kept short-term interest rates steady at 0.25% at a two-day meeting that ended on Friday. Data released on Friday showed Japan's core inflation accelerated for a fourth consecutive month, reinforcing the case for further policy tightening. Strong resistance can be seen at 143.27 (38.2%fib), an upside break can trigger rise towards 143.00 (psychological level). On the downside, immediate support is seen at 140.70(23.6%fib), a break below could take the pair towards 139.34(Lower BB).
Equities Recap
Asian shares continued their rally on Friday, buoyed by a substantial interest rate cut in the United States
The Nikkei jumped 1.67 %, Hang Seng was up 1.23%, South korean KOSPI was up 0.49%
Commodities Recap
Oil prices eased on Friday,but was on track to end higher for a second straight week following a large cut in U.S. interest rates and declining global stockpiles.
Brent futures , which were trading 26 cents or 0.4% lower at $73.62 a barrel at 0527 GMT on Friday, gained 4.3% this week. U.S. WTI crude futures , which were down 15 cents, or 0.2% at $71.80 a barrel, registered weekly gains of 4.8%.
Gold hovered near record levels on Friday and was set for a weekly gain following the U.S. Federal Reserve's recent significant interest rate cut and indications that more reductions might be forthcoming.
Spot gold rose 0.3% to $2,593.79 per ounce, as of 0539 GMT, up about 0.7% for the week so far.
