Market Roundup
•US Current Account (Jul) 39.6B, 40.3B forecast, 51.0B previous
•EU Current Account n.s.a. (Jul) 48.0B,52.4B previous
•UK BoE Interest Rate Decision (Sep) 5.00% 5.00%forecast,5.00%previous
Looking Ahead Economic Data(GMT)
•12:30 US Current Account (Q2) -259.0B forecast, -237.6B previous
•12:30 US Initial Jobless Claims 230K forecast, 230K previous
•12:30 US Jobless Claims 4-Week Avg. 230.75K previous
• 12:30 US Philadelphia Fed Manufacturing Index (Sep) -0.8 forecast, -7.0 previous
• 12:30 US Philly Fed Business Conditions (Sep) 15.4 previous
•12:30 US Philly Fed CAPEX Index (Sep) 12.00 previous
•12:30 US Philly Fed Employment (Sep) -5.7 previous
• 12:30 US Philly Fed New Orders (Sep) 14.6 previous
• 12:30 US Philly Fed Prices Paid (Sep) 24.00 previous
14:00 USD Existing Home Sales (MoM) (Aug) 1.3% previous
14:00 USD Existing Home Sales (Aug) 3.92M forecast, 3.95M previous
14:00 USD US Leading Index (MoM) (Aug) -0.3% forecast, -0.6% previous
15:30 USD 4-Week Bill Auction 4.965% previous
15:30 USD 8-Week Bill Auction 4.990% previous
Looking Ahead Events And Other Releases(GMT)
•No Significant Events
Currency Forecast
EUR/USD: The euro strengthened on Thursday as U.S. dollar dropped after the Federal Reserve cut its interest rate by 50 basis points and revised its monetary policy outlook, with the Australian dollar and the Norwegian crown outperforming their peers. Expectations had drifted towards a dovish outcome in the days before the Fed's decision on Wednesday, with money markets pricing around a 65% chance of a 50 basis point (bp) cut. Economists polled were leaning towards a 25-bp cut. The euro rose 0.46% to $1.1169, but remained below a three-week high hit in the previous session. Immediate resistance is noted at 1.1186 (23.6%fib), with a breakout potentially pushing the pair towards 1.1218 (Higher BB). On the downside, immediate support is at 1.1111 (38.2%fib), a drop below this level could lead the pair towards 1.1049(50%fib).
GBP/USD: The British pound strengthened against the dollar on Thursday ahead of the Bank of England's policy decision. The Bank of England left interest rates at 5% on Thursday and voted to run down its stock of British government bonds by another 100 billion pounds ($132.86 billion) over the coming 12 months, weighing on the government's finances. The Monetary Policy Committee voted 8-1 to keep rates on hold, with only external member Swati Dhingra voting for a further quarter-point rate cut after the BoE last month delivered its first reduction to borrowing costs since 2020. Sterling rose to its highest levels since March 2022 just above $1.33, having traded around$1.3266 ahead of the decision. Immediate resistance can be seen at 1.3308(23.6%fib), an upside break can trigger rise towards 1.3331(Higher BB).On the downside, immediate support is seen at 1.3154(38.2%fib), a break below could take the pair towards 1.3105(Sep 4th low).
AUD/USD Australian dollar recovered from early losses on Thursday, buoyed by strong Australian jobs report that tempered the overall strength of the U.S. dollar. Australian employment figures revealed an increase of 47,500 jobs in August, far exceeding forecasts of a 25,000 gain for the third month in a row. The unemployment rate held steady at 4.3%, as expected. This continued strength in hiring highlights a tight labor market, bolstering the Reserve Bank of Australia's (RBA) stance against the need for a near-term rate cut. At GMT 12:10, the pair was trading up 0.85 percent at 0.6821 after reaching daily high at 0.6838.Immediate resistance can be seen at 0.6837(23.6%fib), an upside break can trigger rise towards 0.6861 (Higher BB).On the downside, immediate support is seen at 0.6771(38.2%fib), a break below could take the pair towards 0.6741 (Sep 19th low).
USD/JPY: The dollar strengthened against the yen on Thursday as traders reacted to a notable interest rate cut by the Federal Reserve, marking the first reduction in borrowing costs in over four years. The U.S. central bank lowered the overnight rate by half a percentage point, surpassing the usual quarter-point adjustment, due to growing confidence that inflation will continue to move toward its 2% annual target. This decision signals the Fed's commitment to safeguarding the labor market and steering the economy away from potential recession. At GMT 12:10, the pair was up 0.34 percent, trading at 143.00 after hitting a daily high of 143.83. Strong resistance can be seen at 143.72 (38.2%fib), an upside break can trigger rise towards 144.00 (psychological level). On the downside, immediate support is seen at 140.80(23.6%fib), a break below could take the pair towards 139.34(Lower BB).
Equities Recap
European stocks surged on Thursday following a 50-basis-point rate cut from the U.S. Federal Reserve, which indicated that any future easing would be gradual. This sparked optimism for a soft landing for the American economy.
UK's benchmark FTSE 100 was up by 1.08 percent, Germany's Dax was up by 1.72 percent, France’s CAC finished the was up by 2.07percent.
Commodities Recap
Gold prices climbed over 1% on Thursday after hitting a record high in the previous session, as the U.S. Federal Reserve embarked on its rate easing cycle.
Spot gold rose 1.1% to $2,586.37 per ounce by 1105 GMT, while U.S. gold futures rose 0.5% to $2,611.50. Spot gold had scaled an all-time high of $2,599.92 on Wednesday.
Oil prices rose on Thursday after a large interest rate cut from the U.S. Federal Reserve, but Brent was still hovering around its lowest levels of the year, below $75, on expectations of weaker global demand.
Brent crude futures for November were up 66 cents, or 0.9%, to $74.31 a barrel at 1156 GMT, while WTI crude futures for October were up 58 cents, or 0.8%, to $71.49 a barrel.
