Market Roundup
• German CPI (MoM) (Jul) 0.8%, forecast 0.8%, 0.3% previous
• German CPI (YoY) (Jul) 2.8%, forecast 2.8%, 2.3% previous
• German HICP (YoY) (Jul) 2.8%, forecast 2.8%, 2.4% previous
• German HICP (MoM) (Jul) 0.9%, forecast 0.9%, -0.2% previous
• US CPI (YoY) (Jul) 3.4%, 3.4% forecast, 3.5% previous
•US CPI (YoY) (Jul) 3.4%, 3.4% forecast, 3.5% previous
•US CPI (MoM) (Jul) 0.1%, 0.1% forecast, -0.4% previous
•US Core CPI (MoM) (Jul) 0.2%, 0.2% forecast, 0.0% previous
•US Core CPI (YoY) (Jul) 2.5%, 2.5% forecast, 2.6% previous
•US Real Earnings (MoM) (Jul) 0.0%, forecast, 0.7% previous
•US CPI, n.s.a (MoM) (Jul) -0.01%, forecast, -0.35% previous
•US Core CPI Index (Jul) 336.79, forecast, 336.07 previous
•US CPI Index, n.s.a. (Jul) 333.92, 333.99 forecast, 333.95 previous
•US CPI Index, s.a (Jul) 332.81%, forecast, 332.57 previous
•Canada Building Permits (MoM) (Jun) 18.5%, 0.8% forecast, -3.0% previous
Looking Ahead Economic Data (GMT)
•15:30 US Crude Oil Inventories -1.700M forecast, 2.479M previous
•15:30 US Gasoline Inventories -1.580M forecast, -1.643M previous
•16:00 US Cleveland CPI (MoM) (Jul) 0.2% previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD : The euro strengthened against dollar on Wednesday after U.S. consumer price inflation matched economists' expectations in July, easing concerns that a hot reading could reinvigorate expectations for a near-term interest rate hike.In the 12 months through July, the CPI advanced 3.4% after rising 3.5% in June. Core CPI increased 2.5% in the 12 months through July after climbing 2.6% in June.Traders have pared bets on a rate increase at the Federal Reserve's September 15-16 meeting since Friday's jobs report showed employers unexpectedly shed jobs in July. Fed funds futures traders are now pricing in 40% odds of a September rate hike, down from 44% before Wednesday's data and from 55% a week ago.. Immediate resistance can be seen at 1.1574(38.2%fib), an upside break can trigger rise towards 1.1612(June 17th high).On the downside, immediate support is seen at 1.1525(50%fib), a break below could take the pair towards 1.1477(50%fib).
GBP/USD: The British pound gained slightly against the U.S. dollar on Wednesday after U.S. inflation data came in as expected.The Consumer Price Index edged up 0.1% last month after dropping 0.4% in June, in line with a Reuters poll of economists and analysts. Annual CPI inflation slowed to 3.4% from 3.5% a month earlier.Traders stuck to their bets that narrowly favour an interest rate hold at next month's meeting following the data, with markets giving about a 55% chance that the Fed will keep its policy rate in the current 3.50%-3.75% range. Immediate resistance can be seen at 1.3538(38.2%fib), an upside break can trigger rise towards 1.3612(Higher BB).On the downside, immediate support is seen at 1.3503(Daily low), a break below could take the pair towards1.3422(50%fib).
AUD/USD: The Australian dollar firmed against dollar on Wednesday after in-line inflation data reinforced bets the Fed will hold interest rates steady . Data showed U.S. consumer prices increased slightly in July, weakening the argument for the central bank to hike interest rates next month.Economic data, especially inflation figures, have drawn increased scrutiny as elevated energy prices due to the Middle East conflict raised rate-hike bets and Fed Chair Kevin Warsh stayed firm on muted forward guidance.Traders are now pricing in a 55% chance of the U.S. Federal Reserve holding rates at its September meeting, according to CME's FedWatch Tool. Before the data was released, they were split between a hike and no change. Immediate resistance can be seen at 0.7094(Daily high), 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 dipped on Wednesday after data showed U.S. inflation came in line with expectation. U.S. consumer prices barely increased in July as the cost of gasoline declined for a second straight month, while underlying inflation was benign, further reducing the odds of an interest rate hike from the Federal Reserve next month.The Consumer Price Index edged up 0.1% last month after dropping 0.4% in June, which was the first decline in six years, the Labor Department's Bureau of Labor Statistics said. The yen strengthened 0.3% to 158.81 per dollar, but remained off last week's high of 155.20 after several suspected rounds of intervention. 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
European shares consolidated near record highs on Wednesday, as investors digested corporate earnings reports and awaited U.S. inflation data that could determine the interest rate path amid fresh geopolitical tensions.
UK's benchmark FTSE 100 was down by 0.13 percent, Germany's Dax was down by 0.14 percent, France’s CAC was down by 0.54percent.
Commodities Recap
Gold rose more than 1% on Wednesday, supported by a weaker U.S. dollar after July inflation data came in line with expectations, reinforcing market bets that the Federal Reserve could leave interest rates unchanged at its September meeting.
Spot gold rose 1.1% to $4,416.29 per ounce by 09:25 a.m. EDT (1325 GMT), and climbed above the 100-day moving average, which is currently at $4,387.33. Bullion scaled to its highest level since June 5 on Tuesday. U.S. gold futures gained 0.8% to $4,476.10.
U.S. crude rose 0.7% to $83.71 a barrel and Brent rose 0.3% to $89.19 per barrel, with both poised to extend five-day positive streaks.
Both benchmarks settled more than $1 higher on Tuesday, marking their highest closes since July 31 and extending gains after jumping about 5% on Monday.
