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Market Roundup
• Japan au Jibun Bank Manufacturing PMI (Sep) 54.1, 54.1 forecast, 54.9 previous
• Australia Trade Balance (Aug) 0.495B, 2.000B forecast, 1.351B previous
• Australia Exports (MoM) (Aug) 3.7%, -3.6% previous
• Australia Imports (MoM) (Aug) 5.8%, -2.4% previous
Looking Ahead Economic Data (GMT)
• 07:45 Italy HCOB Manufacturing PMI (Sep) 50.1 forecast, 49.6 previous
• 07:45 France HCOB Manufacturing PMI (Sep) 50.3 forecast, 51.1 previous
• 07:55 Germany HCOB Manufacturing PMI (Sep) 53.8 forecast, 54.3 previous
• 08:00 Eurozone HCOB Manufacturing PMI (Sep) 52.7 forecast, 52.7 previous
• 09:00 UK S&P Global Manufacturing PMI (Sep) 52.0 forecast, 51.7 previous
• 09:00 EU Unemployment Rate (Aug) 6.4% forecast,6.4% previous
Looking Ahead Events And Other Releases (GMT)
• No Event Ahead
Currency Forecast
EUR/USD : The euro slipped lower against dollar on Thursday as a sharp rise in Eurozone inflation highlighted the risk that elevated energy prices could fuel broader price pressures. Inflation accelerated faster than expected in several major eurozone economies in September, driven by an energy-price shock linked to the Iran conflict, increasing pressure on the European Central Bank to consider further rate hikes.Investors have raised expectations for additional tightening in recent weeks as natural gas, petrol and diesel prices have surged.France’s harmonized inflation rose to 3.4% year-on-year in September from 2.6% in August, while Italy’s jumped to 4.1% from 3.2%. German inflation also accelerated to 3.3% from 2.9%, with all three readings above the ECB’s 2% target. Immediate resistance can be seen at 1.1450(38.2%fib), an upside break can trigger rise towards 1.1539(50%fib).On the downside, immediate support is seen at 1.1302(23.6%fib), a break below could take the pair towards 1.1271(Lower BB).
GBP/USD: Sterling dipped on Thursday as dollar benefitted by an extended rise in US Treasury yields. The yield on benchmark US 10-year Treasury notes hit 5.306%, the highest level since mid-June 2007, while the 30-year Treasury yield was at 5.634%.Data on Wednesday showed US inflation rose less than expected in August, while price pressures were revised lower for the prior month.The data reduced expectations of a rate hike in October, with markets pricing in a 36% chance, down from 45% before the release. Traders, however, still see an 89% probability of an increase in December. Immediate resistance can be seen at 1.3347(Daily high), an upside break can trigger rise towards 1.3397(50%fib).On the downside, immediate support is seen at 1.3227(Sep 30th low), a break below could take the pair towards1.3178(23.6%fib).
AUD/USD: The Australian dollar dipped on Thursday as investors digested weaker-than-expected Australian trade data.The Australian Bureau of Statistics reported the balance on goods recorded a surplus of A$495 million ($343.73 million) in August, down from a revised A$1.4 billion in July. That was well below forecasts of a A$2.0 billion surplus.Exports rose 3.7%, with non-monetary gold up 20%. Overall imports jumped 5.8%, led by a 79% rise in ADP equipment used in data centers, and a rise in aircraft shipments.Meanwhile, the failure to restore an interim ceasefire between Iran and its counterparts kept geopolitical risks elevated, with WTI crude around $89.18 a barrel. The US dollar index remained broadly flat. Immediate resistance can be seen at 0.6975 (38.2%fib), an upside break can trigger rise towards 0.7055(50%fib).On the downside, immediate support is seen at 0.6931 (Lower BB), a break below could take the pair towards 0.68743(23.6%fib)
USD /JPY : The U.S. dollar rebounded on Thursday as dollar was benefited by elevated US-Japan yield differentials.The yield differential between Japanese government bonds and US Treasuries also remains near recent extremes, maintaining a supportive backdrop for USD/JPY.The yield on benchmark US 10-year Treasury notes hit 5.306%, the highest level since mid-June 2007, while the 30-year Treasury yield was at 5.634%.Several Bank of Japan policymakers believed the central bank should accelerate the pace of interest-rate increases or move rates closer to its policy “goal” in the near term, according to a summary of opinions from its September meeting.Most policymakers cited the need to follow September’s rate hike with further increases in borrowing costs as inflationary pressures continue to build. Immediate resistance can be seen at 158.00(Psychological level), an upside break can trigger rise towards 158.48(50%fib).On the downside, immediate support is seen at 156.46(SMA 20) a break below could take the pair towards 156.13(61.8%fib).
Equities Recap
Asian stocks firmed on Thursday as investors assessed softer-than-expected US inflation data for August that reduced expectations for a Federal Reserve rate hike later this month.
China A50 was up by 0.36% , South Korea’s KOSPI was up at 1.95%, Nikkei was up at 3.43%
Commodities Recap
Gold rose on Thursday after a softer-than-expected US inflation report tempered expectations for a Federal Reserve rate hike this month, with markets looking to upcoming jobs data for further policy signals.
Spot gold gained 0.8% to $4,187.43 per ounce by 0625 GMT, starting the month on a positive note after a more than 6% fall in September. US gold futures for December delivery firmed 0.7% to $4,217.50.
Oil prices held firm on Thursday as recovering Gulf crude exports and an unexpected rise in US inventories eased supply concerns, while investors monitored renewed US-Iran diplomatic efforts aimed at ending the Middle East conflict.
Brent crude futures were up 0.6 % to $98.67 a barrel by 0704 GMT, and US West Texas Intermediate crude rose 0.5% to $90.09 a barrel.
