Market Roundup
• Australia Construction Work Done (QoQ) (Q2) 0.1%,0.8% forecast,-2.0% previous
• Australia Jul Weighted mean CPI (YoY) 3.50%,3.40%forecast, 3.80% previous
• Australia Jul Budget Balance -28.8B,-209.1B previous
• Japan Jun Leading Index (MoM) -2.6% forecast, 0.3% previous
• Japan Jun Leading Index 108.6 forecast, 111.2 previous
Looking Ahead Economic Data (GMT)
• 06:00 GfK Sep German Consumer Climate -18.1 forecast, -18.4 previous
•06:45 French Aug Consumer Confidence 92 forecast, 91 previous
•08:00 Italian Jun Industrial Sales (YoY) -4.80% previous
•08:00 Italian Jun Italian Industrial Sales (MoM) -0.90% previous
•08:00 Switzerland Aug ZEW Expectations 9.4 previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro dipped against the dollar on Wednesday as traders waited for a series of economic data releases from Eurozone and the United States. Further data is awaited throughout the week from the Eurozone’s major economies as well as Friday's European Union inflation . U.S. growth data is due on Thursday, followed by personal consumption expenditure data on Friday, which is seen a close gauge to measure inflation. The euro slid 0.09% to $1.117375 and was sitting not far from a 13-month peak touched at the top of the week. 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 pound eased slightly on Wednesday as markets focused on clues to the size of a widely expected U.S. interest rate cut next month. Investors are unanimous in bets that the Federal Reserve will begin cutting interest rates next month following Chair Jerome Powell's dovish tilt last week, with the debate now centred on whether or not it will be a super-sized 50-basis point cut.The current pricing sits at a 36% chance for the larger cut, up from 29% a week ago, according to the CME Group's FedWatch Tool. A preliminary estimate for U.S. gross domestic product in the second quarter is due later this week, along with the Fed's preferred inflation measure, the personal consumption expenditures (PCE) index. 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: Australian popped up to a multi-month high on Wednesday after the latest domestic consumer price data came in a tick above consensus. Australian data showed that consumer prices (CPI) slowed to 3.5% in July, down from 3.8% the previous month, falling short of the 3.4% or lower many analysts had anticipated. Several core inflation measures also eased, with one reaching its lowest level since early 2022, but progress remains gradual. The headline CPI is being dampened by government rebates on electricity bills, which may help inflation fall back into the Reserve Bank of Australia's (RBA) 2-3% target range this quarter. 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).
NZD/USD: New Zealand dollar eased slightly against dollar on Wednesday as markets focused on clues to the size of a widely expected U.S. interest rate cut next month.Moves in the foreign exchange market were muted as traders awaited fresh hints on the state of the world's largest economy.Investors are unanimous in bets that the Federal Reserve will begin cutting interest rates next month following Chair Jerome Powell's dovish tilt last week, with the debate now centred on whether or not it will be a super-sized 50-basis point cut.The current pricing sits at a 36% chance for the larger cut, up from 29% a week ago, according to the CME Group's FedWatch Tool. Immediate resistance can be seen at 0.6263 (23.6%fib), an upside break can trigger rise towards 0.6277(Higher BB).On the downside, immediate support is seen at 0.6195 (38.2%fib), a break below could take the pair towards 0.6141(50%fib).
USD/JPY: The dollar edged higher against the yen on Wednesday as traders sought additional clues about the scale of the anticipated Federal Reserve rate cut next month. With a 25-basis point cut already fully priced in for September, following Fed Chair Jerome Powell’s signal last week, investors are now focusing on the personal consumption expenditures index due Friday and a key jobs report next week to determine if a larger 50-basis point cut might be implemented. Bank of Japan Deputy Governor Ryozo Himino reiterated on Wednesday that the central bank is prepared to adjust its level of monetary easing if it becomes confident that its economic outlook and inflation targets will be met. 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 143.75(23.6 %fib), a break below could take the pair towards 142.28(Lower BB).
Equities Recap
Japan's Nikkei share average edged lower on Wednesday amid a strengthening yen and caution ahead of earnings from AI darling Nvidia later in the day.
The Nikkei ended the morning session down 0.23% at 38,199.52.
Commodities Recap
Gold prices dipped on Wednesday as the dollar edged up while ,investors awaitied a key U.S. inflation report later this week for clearer insights into the potential size of a September rate cut.
Spot gold fell 0.7% to $2,507.64 per ounce by 0531 GMT. Bullion hit a record high of $2,531.60 on Aug. 20.U.S. gold futures were down 0.4% to $2,542.80.
Oil prices recovered on Wednesday after a sharp decline the previous session ended a three-day streak of gains. Investors have been shifting between fears of potential supply disruptions from Libya and the Middle East and concerns over global fuel demand.
Brent crude futures were up 25 cents, or 0.31%, at $79.80 a barrel at 0209 GMT. U.S. West Texas Intermediate crude futures rose 17 cents, or 0.23%, to trade at $75.70.
