Market Roundup
•UK Jul Nationwide HPI (MoM) 0.3%,0.1%forecast,0.2% previous
•UK Jul Nationwide HPI (YoY) 2.1%,1.8% forecast,1.5% previous
•Spanish Jul Manufacturing PMI 51.0,52.5 forecast,52.3 previous
•Italian Jul Manufacturing PMI 47.4,46.0 forecast,45.7 previous
•French Jul Manufacturing PMI 44.0,44.1 forecast,45.4 previous
•German Jul Manufacturing 43.2,42.6 forecast,43.5 previous
•EU Jul Manufacturing PMI 45.8,45.6 forecast,45.8 previous
•UK Jul Manufacturing PMI 52.1, 51.8 forecast,50.9 previous
•EU Jun Unemployment Rate 6.5%,6.4% forecast,6.4% previous
•French 30-Year OAT Auction3.49%,3.61% previous
•French 15-Year OAT Auction3.21%,3.21% previous
•UK Aug BoE Interest Rate Decision 5.00%, 5.00% forecast,5.25% previous
• US Initial Jobless Claims 249K ,236K forecast,235K previous
• US Continuing Jobless Claims 1,877K ,1,860K forecast,1,851K previous
• US Jobless Claims 4-Week Avg. 238.00K , 235.50K previous
Looking Ahead Economic Data(GMT)
•13:30 Canada Jul Manufacturing PMI 49.3 previous
•13:45 US Jul Manufacturing PMI 49.5 forecast, 51.6 previous
•14:00 US Jul ISM Manufacturing New Orders Index 49.3 previous
•14:00 US Jun Construction Spending (MoM) 0.2% forecast,-0.1% previous
•14:00 US Jul ISM Manufacturing PMI 48.8 forecast, 48.5 previous
•14:00 US Jul ISM Manufacturing Employment 49.0 forecast,49.3 previous
•14:00 US Jul ISM Manufacturing Prices 51.9 forecast,52.1 previous
Currency Forecast
EUR/USD: The euro declined on Thursday as the dollar gained strength following Federal Reserve Chair Jerome Powell's indications that a September interest rate cut might be considered. On the economic data front, Euro zone manufacturing activity remained mired in contraction in July. Purchasing Managers' Index (PMI) held at June's 45.8 in July. Germany's manufacturing sector continued its downturn - it fell to 43.2 in July from 43.5 in June. France’s manufacturing sector contracts slightly more than expected in July - it slid to 44.0 points in July from 45.4 in June. The Fed kept its benchmark overnight interest rate in the 5.25%-5.50% range as it ended its two-day policymaking meeting on Wednesday, but opened the door to rate cuts next month. Immediate resistance can be seen at 1.0835(50%fib), an upside break can trigger rise towards 1.0822(61.8%fib).On the downside, immediate support is seen at 1.0790(38.2%fib), a break below could take the pair towards 1.0731(23.6%fib).
GBP/USD: The pound declined against the dollar on Thursday after the Bank of England cut interest rates from a 16-year high at its latest monetary policy decision. The BoE trimmed interest rates by a quarter point to 5% from a 16-year high after a narrow vote in favour from policymakers, making it the first cut from the central bank since 2020.However, BoE Governor Andrew Bailey said that the Monetary Policy Committee would move cautiously going forward, as policymakers were divided over whether inflation pressures had eased sufficiently. The pound fell to its lowest in a month, and was last down 0.7% against the U.S. dollar. Immediate resistance can be seen at 1.2822(50%fib), an upside break can trigger rise towards 1.2888(61.8%fib).On the downside, immediate support is seen at 1.2761(38.2%fib), a break below could take the pair towards 1.2691(23.6%fib).
USD/CHF: The dollar declined against the Swiss franc on Thursday as investors digested Fed rate decision. The Federal Reserve held rates steady but opened the door to reducing borrowing costs in September. Fed Chair Jerome Powell on Wednesday stressed that the central bank was also focused on keeping the labour market healthy, adding new emphasis to Friday's U.S. jobs report for July.It is expected to show that employers added 175,000 jobs during the month, a step down from 206,000 in June. Data on weekly jobless claims is due later on Thursday.Traders are now anticipating 72 bps of easing this year Immediate resistance can be seen at 0.8822 (38.2%fib), an upside break can trigger rise towards 0.8877(50%fib).On the downside, immediate support is seen at 0.8747 (23.6%fib), a break below could take the pair towards 0.8716(Lower BB).
USD/JPY: The dollar strengthened against the yen on Thursday as dollar bounced after Fed's Powell put September rate cut on table. Federal Reserve Chair Jerome Powell said on Wednesday interest rates could be cut as soon as September if the U.S. economy follows its expected path, putting the central bank near the end of a more than two-year battle against inflation but square in the middle of the nation's presidential election campaign.The Fed ended its latest two-day policy meeting with a decision to hold its benchmark interest rate steady in the 5.25%-5.50% range that was set a year ago, but its statement softened the description of inflation and said the risks to employment were now on a par with those of rising prices - neutral language that opens the door for rates to fall after more than two years of tightening credit..Strong resistance can be seen at 151.26(38.2%fib), an upside break can trigger rise towards 153.08 (50%fib). On the downside, immediate support is seen at 149.63(Daily low), a break below could take the pair towards 149.02 (23.6%fib).
Equities Recap
Major European equity markets were lower on Thursday after a raft of corporate earnings in the U.S. and Europe, while prospects of upcoming policy easing in the United States boosted global bonds.
At (GMT 12:46 ),UK's benchmark FTSE 100 was last trading down at 0.05 percent, Germany's Dax was down by 0.97 percent, France’s CAC finished was down by 1.16 percent.
Commodities Recap
Gold prices dipped as the dollar rebounded on Thursday, after bullion hit two-week highs earlier in the session on Federal Reserve Chair Jerome Powell's indications that a September interest rate cut might be considered.
Spot gold was down 0.7% at $2,432.29 per ounce, as of 0956 GMT, having hit its highest since July 18 earlier in the session.U.S. gold futures firmed 0.1% to $2,476.10.
Oil prices extended gains on Thursday after the killing of a Hamas leader in Iran raised the threat of a wider Middle East conflict and concern over its impact on oil.
Global benchmark Brent crude futures rose 71 cents, or 0.9%, to $81.55 a barrel by 1124 GMT. U.S. West Texas Intermediate crude gained 72 cents, also 0.9%, to $78.63.
