Market Roundup
•UK Core Retail Sales (YoY) (Aug) 2.3%, 1.1% forecast, 1.4% previous
•UK Core Retail Sales (MoM) (Aug) 1.1%, 0.5% forecast, 1.0% previous
•UK Public Sector Net Borrowing (Aug) 13.73B, 12.10B forecast, 3.10B previous
•UK Public Sector Net Cash Requirement (Aug) 4.875B, , 16.905B previous
•UK Retail Sales (YoY) (Aug) 2.5%, 1.4% forecast, 1.5% previous
•UK Retail Sales (MoM) (Aug) 1.0%, 0.3% forecast, 0.7% previous
• German PPI (YoY) (Aug) -0.8%, -1.0% forecast, -0.8% previous
• German PPI (MoM) (Aug) 0.2%, 0.0% forecast, 0.2% previous
Looking Ahead Economic Data(GMT)
•12:30 Canada Core Retail Sales (MoM) (Jul) 0.2% forecast, 0.3% previous
•12:30 Canada IPPI (YoY) (Aug) 2.9% previous
•12:30 Canada IPPI (MoM) (Aug) -0.3% forecast, 0.0% previous
•12:30 Canada New Housing Price Index (MoM) (Aug) 0.2% previous
•12:30 Canada Retail Sales (MoM) (Jul) 0.5% forecast, -0.3% previous
•12:30 Canada RMPI (YoY) (Aug) 4.1% previous
•12:30 Canada RMPI (MoM) (Aug) -2.0% forecast, 0.7% previous
Looking Ahead Events And Other Releases(GMT)
• No Data Ahead
Currency Forecast
EUR/USD: The euro continued to gain against the dollar on Friday, supported by strong risk appetite following a significant interest rate cut from the U.S. Federal Reserve. The Fed's 50-basis-point cut on Wednesday, coupled with smaller-than-expected jobless claims data, fueled optimism about a potential soft landing for the U.S. economy. Jobless claims for the week ending Sept. 14 fell to a four-month low, surpassing market expectations. Markets now imply a nearly 44% chance of another 50 bps cut in November and have priced in 72 bps by year-end. By the end of 2025, rates are projected to be at 2.85%, aligning with the Fed's neutral estimate. Immediate resistance is noted at 1.1198 (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: Sterling edged up against the dollar after data showed British retail sales rose by a stronger-than-expected 1% in August .The Office for National Statistics said sales volumes in July rose by a revised 0.7%, up from a previous estimate of a 0.5% month-on-month increase. On Friday, as strong UK retail sale data provided an extra boost to the currency's upbeat trend. Sterling had risen on Wednesday as data showed that British inflation held steady in August but rose in the services sector, which is closely watched by the BoE, to 5.6% from 5.2% in July.It got a further boost after a cautious BoE kept interest rates at 5.0% on Thursday, with its rate setter Catherine Mann saying earlier on Friday that she took a guarded view on the prospect of multiple rate cuts in the months ahead. Immediate resistance can be seen at 1.3331(23.6%fib), an upside break can trigger rise towards 1.3361(Higher BB).On the downside, immediate support is seen at 1.3278(Daily low), a break below could take the pair towards 1.3196(38.2%fib%fib).
USD/CNY: The dollar fell to nearly a 16-month low against the Chinese yuan on Friday, driven by expectations that Beijing will introduce new economic stimulus following a significant U.S. rate cut. The yuan is also gaining support from signs of rising corporate demand, as more exporters settle their foreign exchange receipts, a trend that could accelerate further. The Chinese currency has appreciated by about 3% since late July, recovering its first-half losses, as the dollar weakened amid expectations of U.S. rate reductions. The Fed implemented a larger-than-usual 50-basis-point cut on Wednesday. Strong resistance can be seen at 7.064 (38.2 %fib), an upside break can trigger rise towards 7.086 (50 %fib). On the downside, immediate support is seen at 7.039(23.6 %fib), a break below could take the pair towards 7.000(Psychological level).
NZD/USD: New Zealand dollar edged higher against greenback on Friday as the prospect of further aggressive policy easing by central banks boosted risk sentiment.The U.S. Federal Reserve began its rate-cutting cycle with a significant 50-basis-point reduction. Reserve Bank of New Zealand, which surprised many by starting its easing campaign in August with a quarter-point cut to 5.25%.The market is fully priced for another quarter-point rate cut in October, with a 41% chance of a 50-basis-point cut. Swaps indicate 85 basis points of easing expected by Christmas, projecting rates at 2.87% by the end of 2025. Immediate resistance can be seen at 0.6203(38.2%fib), an upside break can trigger rise towards 0.6277(23.6%fib).On the downside, immediate support is seen at 0.6144(50%fib), a break below could take the pair towards 0.6121(Lower BB).
USD/JPY: The dollar rose against the yen on Friday after the Bank of Japan signalled it was in no rush to raise interest rates again after keeping them steady at 0.25% as widely expected. The Bank of Japan kept interest rates steady on Friday and revised up its assessment on consumption, signaling its confidence a solid economic recovery will allow the central bank to raise interest rates again in coming months.As widely expected, the BOJ kept short-term interest rates steady at 0.25% at a two-day meeting that ended on Friday. The dollar rose 1.2% to 144.32 yen , reaching its highest level in a little over two weeks . Strong resistance can be seen at 143.27 (38.2%fib), an upside break can trigger rise towards 143.00 (psychological level). On the downside, immediate support is seen at 140.70(23.6%fib), a break below could take the pair towards 139.34(Lower BB).
Equities Recap
European shares dipped on Friday following a rally in the previous session that was fueled by the U.S. Federal Reserve's significant interest rate cut. Meanwhile, Mercedes saw its shares poised for their worst day in 15 months after the automaker revised its core profit outlook downward.
UK's benchmark FTSE 100 was down by 0.85 percent, Germany's Dax was down by 0.63 percent, France’s CAC finished the was down by 0.71 percent.
Commodities Recap
Spot gold prices reached a record high on Friday, driven by a weak dollar, expectations of further U.S. interest rate cuts, and heightened tensions in the Middle East, which outweighed subdued physical demand in Asia.
Spot gold was up 1.0% at $2,613.09 per ounce by 1058 GMT after hitting a record high of $2,614.49. U.S. gold futures rose 0.9% to $2,638.30.
Oil prices eased on Friday, but were on track to register gains for a second straight week following a large cut in U.S. interest rates and declining global stockpiles.
Brent futures were down 50 cents, or 0.67%, at $74.38 a barrel at 1004 GMT while U.S. WTI crude futures fell 48 cents, or 0.65%, at $71.47.
