Market Roundup
•UK Core CPI (MoM) (Aug) 0.4% ,0.4% forecast, 0.1% previous
•UK Core CPI (YoY) (Aug) 3.6%, 3.6% forecast, 3.3% previous
•UK Core PPI Output (YoY) (Aug) 1.3%, - 1.0% previous
•UK Core PPI Output (MoM) (Aug) 0.1%, - 0.1% previous
•UK Core RPI (MoM) (Aug) 0.6%, - 0.0% previous
•UK Core RPI (YoY) (Aug) 2.8%, - 2.7% previous
•UK CPI (YoY) (Aug) 2.2% ,2.2% forecast, 2.2% previous
•UK CPI (MoM) (Aug) 0.3% ,0.3% forecast, -0.2% previous
•UK CPI, n.s.a (Aug) 134.30, - 133.80 previous
•UK CPIH (YoY) 3.1%, - 3.1% previous
•UK PPI Input (MoM) (Aug) -0.5%, -0.3% forecast, -0.3% previous
•UK PPI Input (YoY) (Aug) -1.2%, -0.9% forecast, 0.2% previous
•UK PPI Output (MoM) (Aug) -0.3%, 0.0% forecast, 0.0% previous
•UK PPI Output (YoY) (Aug) 0.2%, 0.5% forecast, 0.8% previous
•EU Construction Output (MoM) (Jul) 0.00% - 0.59% previous
•EU Core CPI (MoM) (Aug) 0.3% ,0.3% forecast, -0.2% previous
•EU Core CPI (YoY) (Aug) 2.8% ,2.8% forecast, 2.9% previous
•EU CPI (YoY) (Aug) 2.2% 2.2% forecast, 2.6% previous
•EU CPI (MoM) (Aug) 0.1% 0.2% forecast, 0.0% previous
•EU CPI ex Tobacco (MoM) (Aug) 0.1% - 0.0% previous
•EU CPI ex Tobacco (YoY) (Aug) 2.0% - 2.5% previous
•EU CPI, n.s.a (Aug) 126.72 126.74 forecast, 126.54 previous
Looking Ahead Economic Data(GMT)
•12:30 US Building Permits (Aug) 1.410M forecast, 1.406M previous
•12:30 US Building Permits (MoM) (Aug) -3.3% previous
•12:30 US Housing Starts (MoM) (Aug) -6.8% previous
•12:30 US Housing Starts (Aug) 1.310M forecast, 1.238M previous
•12:30 Canada Foreign Securities Purchases (Jul) 5.17B previous
•12:30 Canada Foreign Securities Purchases by Canadians (Jul) 16.350B previous
•14:30 US Atlanta Fed GDPNow (Q3) 3.0% previous
•14:30 USD Crude Oil Inventories -0.100M forecast, 0.833M previous
•18:00 US Fed Interest Rate Decision 5.25% forecast, 5.50% previous
Looking Ahead Events And Other Releases(GMT)
•18:00 US FOMC Economic Projections
•18:00 US FOMC Statement
•18:30 US FOMC Press Conferences
Currency Forecast
EUR/USD: The euro climbed slightly on Wednesday as dollar dipped as traders weighed the odds of a super-sized Federal Reserve interest rate cut later in the day. The chances of the Fed kicking off its easing cycle with a super-sized cut of 50 basis points (bps) were revived earlier this week, after media reports raised the prospect of more aggressive action.Financial markets are fully pricing in a 25 bps rate cut, while the odds of a 50 bps cut stood at 61% by Wednesday. The euro rose 0.2% to $1.1132. Immediate resistance is noted at 1.1142 (23.6%fib), with a breakout potentially pushing the pair towards 1.1191 (Higher BB). On the downside, immediate support is at 1.1075 (Sep 16th low), a drop below this level could lead the pair towards 1.1000 (Psychological level).
GBP/USD: The British pound strengthened against the dollar on Wednesday, buoyed by UK inflation data that reinforced expectations for the Bank of England to maintain interest rates at 5% during its meeting on Thursday. This comes in stark contrast to the anticipated initiation of a U.S. policy easing cycle later in the day. Official figures showed that inflation remained steady at an annual rate of 2.2% in August, unchanged from July, despite a rise in service sector price growth. Additionally, industry reports indicated that growth in British supermarket sales had slowed in the past month, as consumers reduced spending following their summer holidays. Immediate resistance can be seen at 1.3220(23.6%fib), an upside break can trigger rise towards 1.3256(Higher BB).On the downside, immediate support is seen at 1.3121(38.2%fib), a break below could take the pair towards 1.3033(61.8%fib).
AUD/USD: The Australian dollar climbed to its highest levels in two weeks on Wednesday as dollar weakened ahead of likely interest rate cut from the U.S. Federal Reserve. Anticipation of a half-point rate reduction by the U.S. Fed later in the day stood at 65%, substantially higher than 34% a week ago, according to CME FedWatch Tool.The Fed's decision will significantly impact Australia's interest rate trajectory. Markets currently see little chance of a cut in the 4.35% cash rate at the Reserve Bank of Australia's meeting next Tuesday. Immediate resistance can be seen at 0.6801(23.6%fib), an upside break can trigger rise towards 0.6861 (Higher BB).On the downside, immediate support is seen at 0.6742 (Sep 17th low), a break below could take the pair towards 0.6704 (38.2%fib).
NZD/USD: The New Zealand dollar edged higher against the U.S. dollar on Wednesday as the US dollar retreated ahead of the Federal Reserve’s policy decision. The Federal Open Market Committee (FOMC) meeting, which concludes later on Wednesday, is expected to kick off a U.S. easing cycle that could spark volatility in currency pairs.On the data front, Consumer confidence in New Zealand improved in the third quarter .The Westpac-McDermott Miller consumer confidence index rose to 90.8 from 82.2 in the previous quarter. New Zealand dollar stood at $0.6215, following a 0.7% rally in the previous session. Immediate resistance can be seen at 0.6237(23.6%fib), an upside break can trigger rise towards 0.6255(Sep 6th high).On the downside, immediate support is seen at 0.6167(50%fib), a break below could take the pair towards 0.6113(61.8%fib).
USD/JPY: The dollar dipped on Wednesday as investors made last-minute tweaks to positions ahead of a policy meeting expected to initiate a U.S. easing cycle. The Federal Reserve is anticipated to announce its first interest rate cut in over four years at 18:00 GMT, with markets pricing in a two-thirds probability of a 50-basis-point reduction. The yen, up more than 12% since July, has been surging because the Bank of Japan - which sets policy on Friday - has been hiking rates at the same time as the Fed prepares to cut .Yen rose about 0.4% to 141.80 per dollar on Wednesday, recouping about a third of an overnight drop. Top of FormBottom of FormStrong resistance can be seen at 142.60 (38.2%fib), an upside break can trigger rise towards 143.00 (psychological level). On the downside, immediate support is seen at 140.22 (23.6%fib), a break below could take the pair towards 139.23(Lower BB).
Equities Recap
European shares dipped on Wednesday as investors remained cautious ahead of a crucial interest rate decision by the U.S. Federal Reserve, which may signal the start of a monetary easing cycle in the world's largest economy.
UK's benchmark FTSE 100 was last down by 0.66 percent, Germany's Dax was last up by 0.02 percent, France’s CAC was last down by 0.47 percent.
Commodities Recap
Gold prices rose on Wednesday, buoyed by a weaker dollar as investors exercised caution ahead of the U.S. Federal Reserve's policy decision, anticipated to mark the beginning of its monetary easing cycle.
Spot gold was up 0.3% to $2,575.89 per ounce as of 1110 GMT. Bullion rose to a record high of $2,589.59 on Monday.U.S. gold futures gained 0.4% to $2,602.40.
Oil prices declined on Wednesday, reversing two sessions of gains, as an industry report indicated rising U.S. crude and fuel inventories. This increase offset concerns over escalating tensions in the Middle East and the potentially positive effects of a U.S. interest rate cut.
Brent crude futures for November were down 92 cents, or 1.25%, at $72.78 a barrel at 1100 GMT. U.S. crude futures for October dropped 95 cents, or 1.33%, to $70.24.
