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Market Roundup
• UK Claimant Count Change (Aug) 27.8K, 8.3K forecast, -11.8K previous
•UK Employment Change 3M/3M (MoM) (Jul) 67K, 83K previous
•UK Unemployment Rate (Jul) 4.9%, 5.0% forecast, 4.9% previous
•UK Average Earnings Index +Bonus (Jul) 3.9%, 3.9% forecast, 4.2% previous
•UK Average Earnings ex Bonus (Jul) 3.5%, 3.5% forecast, 3.5% previous
•German WPI (YoY) (Aug) 6.8%, 5.3% previous
•German WPI (MoM) (Aug) 0.9%, 0.1% forecast, 0.2% previous
•French CPI (MoM) (Aug) 0.7%, 0.7% forecast, 0.6% previous
•French HICP (MoM) (Aug) 0.7%, 0.8% forecast, 0.6% previous
•French CPI NSA (MoM) (Aug) 0.70%, 0.70% previous
•French CPI NSA (YoY) (Aug) 2.40%, 2.40% previous
•French HICP (YoY) (Aug) 2.6%, 2.7% forecast, 2.4% previous
•France Inflation (YoY) (Aug) 2.30%, 2.10% previous
•German ZEW Current Conditions (Sep) -47.1, -53.0 forecast, -61.1 previous
•German ZEW Economic Sentiment (Sep) 34.7, 39.8 forecast, 34.2 previous
•EU Trade Balance (Jul) 14.2B, 3.7B forecast, 7.2B previous
•EU ZEW Economic Sentiment (Sep) 25.8, 39.2 forecast, 31.4 previous
•German WPI (MoM) (Aug) 0.9%, 0.1% forecast, 0.2% previous
Looking Ahead Economic Data (GMT)
•New Zealand Globa DairyTrade Price Index 0.9% previous
•New Zealand Milk Auctions 3,910.0 previous
•US 20-Year Bond Auction 5.204% previous
Looking Ahead Events And Other Releases (GMT)
• No Events Ahead
Currency Forecast
EUR/USD : The euro dipped on Tuesday as the U.S. dollar firmed ahead of the Federal Reserve’s policy decision. The U.S. central bank will announce its decision at 1800 GMT on Wednesday following the conclusion of its two-day meeting. Financial markets are heavily pricing in a 25-basis-point rate hike, which would lift the benchmark rate to a 3.75%-4.00% range. Data released on Friday showed U.S. consumer prices accelerated in August, while a key measure of underlying inflation posted its largest increase in four months. On the geopolitical front, Iran-aligned Houthi forces in Yemen launched a fresh wave of attacks on Saudi Arabia and were reinforcing positions along Yemen’s western coast near the Red Sea. Oil prices rose amid concerns over potential supply disruptions. Immediate resistance can be seen at 1.1603(Sep 15th high), an upside break can trigger rise towards 1.1627(SMA20).On the downside, immediate support is seen at 1.1516(38.2%fib), a break below could take the pair towards 1.1459(July 3st low).
GBP/USD: The pound hovered d near one month low on Tuesday as investors assessed a batch of domestic economic data ahead of a central bank policy verdict later this week. Britain's jobs market stayed weak in the third quarter, while a separate report showed grocery price inflation increased to 2.3% over the four weeks to September 6. The official data on inflation is due on Wednesday. Oil prices rose more than 2% to $108.2 per barrel as concerns over oil supplies intensified after Iran-backed Houthi forces in Yemen launched fresh attacks on Saudi Arabia, while Gulf Arab states postponed planned discussions with Iran. Britain is prone to risks from higher energy prices given its net oil-importer status. Immediate resistance can be seen at 1.3506(Daily high ), an upside break can trigger rise towards 1.3543(38.2%fib).On the downside, immediate support is seen at 1.3454(Lower BB), a break below could take the pair towards1.3424(50%fib).
AUD/USD: The Australian dollar dipped on Tuesday as the U.S. dollar was supported by rising expectations that the Federal Reserve will raise interest rates this week. The Fed is widely expected to increase its benchmark interest rate by at least 25 basis points, a sharp shift from just a week ago, when markets saw roughly even odds of a hike or a pause. Oil supply concerns intensified as the Middle East conflict continued to disrupt energy markets, with no clear end to hostilities in sight. Meanwhile, RBA officials, including Governor Michele Bullock, are scheduled to appear before a parliamentary committee on Friday, with markets looking for clues on the central bank’s policy outlook. Immediate resistance can be seen at 0.7166(SAM20), an upside break can trigger rise towards 0.7238(23.6%fib).On the downside, immediate support is seen at 0.7114 (38.2%fib), a break below could take the pair towards 07094(Lower BB)
USD /JPY : The U.S. dollar strengthened against yen on Tuesday ahead of this week’s Federal Reserve and BOJ policy decisions. Renewed energy-driven inflation pressures, following a stronger-than-expected jobs report and a pickup in August consumer prices, have reinforced expectations that the Fed will raise interest rates on Wednesday. Economists surveyed by Reuters also expect at least one further rate hike by the end of March, reversing the fragile consensus for no change that prevailed before Friday’s official data showed inflation remained firm. Meanwhile, the BOJ is widely expected to raise its policy rate to 1.25% on Friday, its highest level since April 1995, as the central bank responds to persistent upward inflationary pressures. Immediate resistance can be seen at 155.75(38.2%), an upside break can trigger rise towards 157.28(SMA20).On the downside, immediate support is seen at 154.95(Sep 24th low ) a break below could take the pair towards 154.00 (Psychological level).
Equities Recap
European shares fell to three-month lows on Tuesday, led by losses in banking stocks, as surging oil prices and rising bond yields weighed on risk appetite ahead of the Federal Reserve’s interest rate decision this week.
UK's benchmark FTSE 100 was down by 0.29 percent, Germany's Dax was up by 0.06 percent, France’s CAC was down by 0.25 percent.
Commodities Recap
Gold prices eased on Tuesday as a rally in crude oil heightened inflation concerns, strengthening expectations of a Federal Reserve rate hike and pushing Treasury yields higher ahead of the central bank’s policy meeting this week
Spot gold was down 0.4% at $4,282.49 per ounce, as of 1110 GMT, after hitting its lowest point since August 7 on Monday. U.S. gold futures fell 0.7% to $4,323.30.
Oil prices rose on Tuesday after attacks on Saudi Arabia’s energy infrastructure knocked the East-West Pipeline offline, fueling concerns that damage to key energy facilities and transport routes could take longer to repair.
Brent crude futures were 21 cents, or 0.2%, higher at $105.89 a barrel by 1148 GMT after hitting a session high of $108.43
