Add as a preferred source on Google
Market Roundup
• UK Public Sector Net Cash Requirement (Aug) 10.005B, -26.808B previous
•UK Public Sector Net Borrowing (Aug) 1.80B, 0.00B forecast, 12.80B previous
Looking Ahead Economic Data (GMT)
•09:30 German 5-Year Bobl Auction, 3.090% previous
•10:00 UK CBI Industrial Trends Orders (Sep) -33, -25 forecast, -25 previous
Currency Forecast
EUR/USD : The euro dipped on Tuesday as the dollar remained firm on expectations that further interest rate hikes may be needed to contain inflation. A fresh wave of rate increases and hawkish signals from major central banks has reinforced expectations of additional tightening later this year, supporting the dollar.Attention is turning to a closely watched meeting between U.S. President Donald Trump and Chinese President Xi Jinping later this week, with investors looking for signs that the leaders can prevent further deterioration in relations between the world's two largest economies. Xi is due to arrive in Washington on Wednesday for his first visit in more than a decade, amid growing hopes that the two countries will extend their trade truce and potentially deepen cooperation on artificial intelligence. Immediate resistance can be seen at 1.1558(Sep 17th high), an upside break can trigger rise towards 1.1585(SMA 20).On the downside, immediate support is seen at 1.1454(23.6%fib), a break below could take the pair towards 1.1433(Lower BB).
GBP/USD: The British pound edged lower on Tuesday as the dollar remained firm, with investors awaiting comments from Federal Reserve officials for clues on the U.S. central bank’s policy outlook. With limited U.S. economic data this week, markets will focus on Fed officials’ remarks for signs of whether policymakers are considering another rate increase in October, as well as developments in crude oil prices.The Fed raised its policy rate by 25 basis points last week and signaled that further increases could be needed in the coming months. St. Louis Fed President Alberto Musalem said the central bank may need to raise rates further to contain inflation driven by strong demand and a broader commodity price shock, adding that acting sooner would be preferable to waiting. Immediate resistance can be seen at 1.3349(50%fib), an upside break can trigger rise towards 1.3508(61.8%fib).On the downside, immediate support is seen at 1.3327(Lower BB), a break below could take the pair towards1.3284(38.2%fib).
AUD/USD: The Australian gains slightly against dollar on Tuesday gained slightly on Tuesday as investors assessed Reserve Bank of Australia (RBA) Governor Michele Bullock’s speech.In her last public remarks before the September rate-setting meeting, RBA Governor Michele Bullock discussed the central bank’s tolerance for unemployment. Under its dual mandate, the RBA seeks to support full employment while maintaining price stability by keeping inflation within its target range.Michele Bullock said on Tuesday that monetary policy has limited ability to respond directly to supply shocks, but must act to contain their second-round impact on inflation.Markets are now pricing in a 25-basis-point rate increase by the Reserve Bank of Australia on September 29 as increasingly likely, with futures implying the move is close to fully priced. Immediate resistance can be seen at 0.7134(Sep 18th high), an upside break can trigger rise towards 0.7164(38.2%fib).On the downside, immediate support is seen at 0.7080 (38.2%fib), a break below could take the pair towards 07072(Lower BB)
USD /JPY : The U.S. dollar firmed against yen on Tuesday as traders bet that the Bank of Japan would struggle to match the hawkish policy shift seen at other major central banks.The yen has stayed under pressure, aside from a temporary bounce after the rate check report, following Friday's Bank of Japan rate hike that was accompanied by two dovish dissenting votes.The move stood in contrast to the Fed's rate hike last week and the hawkish signals from most other major central banks, with investors expecting additional rate increases before year-end.Markets are pricing in about a 30% chance that the Bank of Japan will raise its benchmark short-term rate to 1.5% in October, while assigning roughly a 55% probability to a 25-basis-point Fed hike to a 4%-4.25% target range Immediate resistance can be seen at 158.08(Sep 18th high), an upside break can trigger rise towards 158.58(50%fib).On the downside, immediate support is seen at 156.85(SMA20) a break below could take the pair towards 156.20 (61.8%fib).
Equities Recap
Asian markets gained on Tuesday, led by technology stocks, as softer oil prices boosted sentiment and investors looked to possible U.S.-Iran talks for signs of progress. The dollar held firm as markets bet on further interest rate increases to curb inflation.
China A50 was up by 0.31% , South Korea’s KOSPI was up at 0.15%, Nikkei was up at 1.38%
Commodities Recap
Gold prices fell on Tuesday as expectations of interest rates staying higher for longer weighed on sentiment, with investors awaiting comments from US Federal Reserve officials for policy clues.
Spot gold was down 0.6% at $4,319.39 per ounce by 0652 GMT. US gold futures fell 0.6% to $4,356.30.
Oil prices rose for the first time in five sessions on Tuesday as investors awaited developments on potential U.S.-Iran talks at the United Nations General Assembly this week, while increased supplies through the Strait of Hormuz over the weekend eased concerns about disruptions..
Brent crude futures for November delivery rose $1.72, or 1.7%, to $102.06 a barrel by 0617 GMT, while U.S. West Texas Intermediate crude for October delivery gained $1.62, or 1.7%, to $97.40 a barrel.
