Market Roundup
• GfK Sep German Consumer Climate -18.1 forecast, -18.4 previous
•French Aug Consumer Confidence 92 ,92 forecast, 91 previous
•Italian Jun Industrial Sales (YoY) -3.70% ,-4.80% previous
•Italian Jun Italian Industrial Sales (MoM) 0.10% , -1.00% previous
•Switzerland Aug ZEW Expectations -3.4, 9.4 previous
•France Jul Jobseekers Total 2,808.4K, 2,834.5K previous
Looking Ahead - Economic Data (GMT)
•14:30 US Crude Oil Inventories -2.700M forecast,-4.649M previous
•14:30 US EIA Refinery Crude Runs (WoW) 0.222M previous
•14:30 US Crude Oil Imports 0.078M previous
•14:30 US Cushing Crude Oil Inventories -0.560M previous
• 14:30 US Gasoline Inventories -1.600M forecast, -1.606M previous
Looking Ahead Events And Other Releases (GMT)
• 22:00 US FOMC Member Bostic Speaks
Currency Forecast
EUR/USD: The euro dipped against the dollar on Wednesday Investors awaited the release of euro zone August inflation data later in the week, which could provide clues about the European Central Bank's monetary policy path.Consumer price reports from Germany and Spain are scheduled for Thursday, with a key inflation print for the Euro zone set to conclude the week.The European Central Bank meets in two weeks to take a call on borrowing costs, and markets have fully priced in a 25-basis-point cut. The euro slid 0.5% to $1.11295, but was not far from a 13-month peak touched at the start 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 pulled back from two-year highs against the dollar as investors focused on the differing monetary policies of the United States and Britain. The Bank of England cut its main interest rate by 25 basis points to 5% in early August, with traders anticipating additional reductions totaling 41 basis points by the end of the year. In contrast, the Federal Reserve is expected to lower rates by 103 basis points over the remaining three policy meetings of the year, with market pricing also considering the possibility of a significant 50 basis point cut next month. The pound slipped 0.3% to $1.3218, retreating from its peak of $1.3269 on Tuesday, its highest level since March 22. Despite this dip, the pound is on track for a 3.2% gain in August, marking its largest monthly increase since November 2022.3.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).
USD/CHF: The dollar edged higher against the Swiss franc on Wednesday but gains were limited as market attention shifted to the anticipated size of the U.S. interest rate cut next month. In light of Chair Jerome Powell's recent dovish comments, investors are largely expecting the Federal Reserve to initiate rate reductions. The key question now is whether this cut will be a significant 50 basis points. Market expectations currently assign a 36% probability to this larger cut, up from 29% the previous week, according to the CME Group's FedWatch Tool. Additionally, this week will feature the release of the preliminary U.S. GDP estimate for the second quarter and the Fed's preferred inflation measure, the personal consumption expenditures (PCE) index. Immediate resistance can be seen at 0.8498(38.2%fib), an upside break can trigger rise towards 0.8503(23.6%fib).On the downside, immediate support is seen at 0.8407 (23.6%fib), a break below could take the pair towards 0.8361 (Lower BB).
AUD/USD: Australian dollar surged to a multi-month high on Wednesdays following domestic consumer price data that slightly exceeded expectations. The latest figures revealed that consumer prices (CPI) rose by 3.5% in July, down from 3.8% the previous month, but still above the anticipated 3.4% or lower. Although several core inflation measures also showed easing, with one hitting its lowest level since early 2022, the overall progress remains gradual. The headline CPI is being moderated by government rebates on electricity bills, which could potentially help inflation fall within the Reserve Bank of Australia's (RBA) target range of 2-3% 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).
USD/JPY: The dollar edged higher against the yen as traders awaited economic data that could influence the Federal Reserve's September policy meeting. Following Chair Jerome Powell's dovish remarks last week, investors are largely expecting the Fed to start cutting interest rates next month. The focus is now on whether the reduction will be a substantial 50 basis points. Current market pricing indicates a 37% chance of this larger cut, up from 29% a week ago, according to the CME Group's FedWatch Tool. Additionally, markets anticipate over 100 basis points of easing by the end of the year.. 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
European shares touched a more-than-one-month high on Wednesday, boosted by technology stocks ahead of Nvidia's results later in the day and as Ageas' better-than-expected results lifted insurance stocks.
UK's benchmark FTSE 100 was last trading down at 0.21 percent, Germany's Dax was up by 0.72 percent, France’s CAC finished was up by 0.52 percent.
Commodities Recap
Gold prices fell on Wednesday under pressure from a stronger dollar and uncertainty ahead of a key U.S. inflation report that could provide more clarity about the Federal Reserve's September policy meeting.
Spot gold was down 0.8% at $2,504.25 an ounce by 1113 GMT. Prices on Tuesday rose 0.3% to $2,524.57, a record high for the closing price.
Oil prices fell by more than 1% on Wednesday due to ongoing concerns about Chinese demand and the risk of a broader economic slowdown. However, the decline was moderated by the potential for supply disruptions from the Middle East and Libya.
Brent crude futures were down $1.02, or 1.28%, at $78.53 a barrel by 1025 GMT. U.S. West Texas Intermediate crude futures fell $1.04, or 1.38% to $74.49.
