Market Roundup
• Japan Reuters Tankan Index (Aug)18, 13previous
• Japan M3 Money Supply (Jul) 2,330.6B, 2,328.2B previous
• Japan M2 Money Stock (YoY) 2.2%,2.1% forecast, 2.2% previous
Looking Ahead Economic Data (GMT)
•09:00 Italy CPI (YoY) (Jul) 2.8%, 3.0% previous
•09:00 Italy CPI (MoM) (Jul) 0.2%, 0.0% previous
•09:00 Italy HICP (YoY) (Jul) 2.9%, 3.0% previous
•09:00 Italy HICP (MoM) (Jul) -1.0%, 0.0% previous
•09:00 Italy CPI Ex Tobacco (YoY) (Jul) 2.9% previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD : The euro was eased against dollar on Wednesday as markets await US inflation data for Fed clues. The main focus for markets this week is on therelease of U.S. inflation data due later on Wednesday for clues to the direction of Federal Reserve interest rates, as last week'ssofter-than-expected jobs report and a press conference by Fed Chair Kevin Warsh last month did littleto dispel doubts.Federal Reserve Bank of Chicago President Austan Goolsbee said on Tuesday the central bank is more concerned about too-high inflation than about any labor market weakness, although it was unclear whether that stance aligned him with the minority of policymakers who favoured an interest-rate hike last month.Traders remain split on the Fed's next move. Immediate resistance can be seen at 1.1565(50%fib), an upside break can trigger rise towards 1.1600(Psychological level).On the downside, immediate support is seen at 1.1517(Aug 8th low), a break below could take the pair towards 1.1472(38.2%fib).
GBP/USD: The British pound eased slightly against the U.S. dollar on Wednesday as renewed uncertainty over the Middle East, adding to inflation concerns, while investors awaited key U.S. inflation data for interest rate clues.Iran's top security official said on Tuesday that the vital Strait of Hormuz shipping route will remain closed unless the U.S. accepts Iran's conditions to end the war: the release of Iran's frozen assets and an end to wars throughout the region, including in Lebanon and Gaza.The United States and Yemen's Iran-aligned Houthis reported separate attacks on shipping on Tuesday. The U.S. Consumer Price Index data, due on Wednesday, could determine the path of interest rates.Traders are also increasingly pricing in the possibility of another BOJ rate hike, with Tokyo Tanshi data showing a 66% chance of a move in September as of Monday afternoon. Immediate resistance can be seen at 1.3528(38.2%fib), an upside break can trigger rise towards 1.3556(Higher BB).On the downside, immediate support is seen at 1.3440(Aug 7th low), a break below could take the pair towards1.3407(50%fib).
AUD/USD: The Australian dollar traded sideways on Wednesday as investors counted down to an influential reading on U.S. inflation.A higher-than-expected core U.S. consumer price index reading could strengthen the case for a Federal Reserve rate hike and boost the U.S. dollar, while a softer outcome would likely have the opposite effect.Markets are pricing about a 50% chance of a Fed hike in September and a similar probability of further RBA tightening in November. RBA left rates unchanged at 4.35% on Tuesday, Governor Michele Bullock struck a far more hawkish tone in a media conference, saying she felt it was quite possible they would need to hike again should inflation not recede as hoped.That highlights the importance of third-quarter consumer price figures due in late October where the RBA is looking for core inflation to undershoot last year's chunky 1.0% gain.. Immediate resistance can be seen at 0.7076(Higher BB), an upside break can trigger rise towards 0.7104(38.2%fib).On the downside, immediate support is seen at 0.7006 (SMA 20), a break below could take the pair towards 0.6975(50%fib).
USD/JPY: The U.S. dollar firmed on Wednesday as the yen weakened again, erasing a large portion of the gains triggered by the recent rare intervention from Japan and the U.S. The yen has come under renewed pressure after the sharp rebound following last month's coordinated U.S.-Japan intervention, with USD/JPY trading around 159.4.The broad yen weakness has kept investors focused on USD/JPY, particularly as the pair approaches the psychologically important 160 level. Markets remain alert to the possibility of further official action after Japan and the United States intervened recently to support the yen.The previous intervention produced a sharp but temporary yen recovery, and renewed depreciation has raised questions over whether authorities could step in again. Immediate resistance can be seen at 158.82 (Aug 10th high), an upside break can trigger rise towards 159.49(50%fib).On the downside, immediate support is seen at 157.50(38.2%fib) a break below could take the pair towards 157.00 (Psychological level).
Equities Recap
Asian stocks mostly advanced on Wednesday, led by a fresh rally in technology shares in Japan and South Korea, while higher oil prices and uncertainty over a potential U.S.-Iran deal kept investors cautious ahead of key U.S. inflation data.
Japan’s Nikkei 225 was up by 0.99 % , KOSPI was up at 3.68%, China A50 was up at 0.52 %
Commodities Recap
Gold prices climbed on Wednesday as geopolitical tensions ratcheted up ahead of key U.S. inflation data.
Spot gold rose 0.77% to $4,400.44 an ounce, while spot silver rose 1% to $65.30 an ounce.
Oil prices ticked higher on Wednesday after Iran's top security official said that the vital Strait of Hormuz shipping route will remain closed unless the United States accepts Iran's conditions to end the war and after the U.S. and Yemen's Iran-aligned Houthis reported separate attacks on shipping.
Brent crude futures rose 0.74% to $89.57a barrel, while U.S. crude was up 0.76% to $83.84.
