Market Roundup
•German WPI (YoY) (Aug) -1.1%, -0.1% previous
•German WPI (MoM) (Aug) -0.8%, 0.3% previous
•Switzerland PPI (YoY) (Aug) -1.2%, -1.7% previous
•Switzerland PPI (MoM) (Aug) 0.2%, 0.1% forecast, 0.0% previous
•Italian CPI (MoM) (Aug) 0.2%, 0.2% forecast, 0.2% previous
•Italian CPI (YoY) (Aug) 1.1%, 1.1% forecast, 1.1% previous
•Italian CPI Ex Tobacco (YoY) (Aug) 0.9%, 1.1% previous
•Italian HICP (MoM) (Aug) -0.2%, -0.1% forecast, -0.1% previous
•Italian HICP (YoY) (Aug) 1.2%, 1.3% forecast, 1.3% previous
•Italian Trade Balance (Jul) 6.743B, 4.450B forecast, 5.150B previous
•Italian Trade Balance EU (Jul) 0.64B, -0.96B previous
•EU Wages in Euro Zone (YoY) (Q2) 4.50%, 5.20% previous
•EU Labor Cost Index (YoY) (Q2) 4.70%, 5.00% previous
•EU Trade Balance (Jul) 21.2B, 14.9B forecast, 21.7B previous
Looking Ahead Economic Data (GMT)
•12:30 US Sep NY Empire State Manufacturing Index -4.10 forecast, -4.70 previous
•12:30 Canada Manufacturing Sales (MoM) (Jul) 0.7% forecast, -2.1% previous
•12:30 Canada New Motor Vehicle Sales (MoM) (Jul) 168.0K previous
•13:00 French 12-Month BTF Auction 2.859% previous
•13:00 French 3-Month BTF Auction 3.396% previous
•13:00 French 6-Month BTF Auction 3.258% previous
Looking Ahead Events And Other Releases (GMT)
•ECB's De Guindos Speaks
EUR/USD: The euro strengthened against the dollar on Monday, driven by a weakening dollar and expectations of a significant interest rate cut by the U.S. Federal Reserve later this week. Fed fund futures suggest a 59% chance of a 50-basis point cut at the September meeting, with traders expecting a total of 125 basis points in rate cuts for 2024, according to CME FedWatch.Looking ahead, Eurozone data releases will include the final August HICP, flash September consumer confidence, and the German ZEW survey. Several European Central Bank officials, including President Lagarde, are also scheduled to speak. Immediate resistance is noted at 1.1111 (32% Fibonacci retracement), with a breakout potentially pushing the pair towards 1.1157 (September 6th high). On the downside, immediate support is at 1.1044 (daily low); a drop below this level could lead the pair towards 1.0983 (50% Fibonacci retracement).
GBP/USD: The British pound gained against the dollar on Monday, recovering from a slight decline last week, as attention turned to this week's UK inflation data and the central bank meeting. The Bank of England (BoE) is expected to hold interest rates steady after a 25-basis-point cut last month. However, futures markets on Monday suggested a higher chance of a further 25-basis-point cut, with odds at about 38% compared to 20% on Friday.Inflation data, due for release on Wednesday, will be crucial ahead of the BoE's policy decision, following last week's figures from the Office for National Statistics that revealed unexpected economic stagnation in July. Sterling rose by 0.5% to $1.3190, up from $1.3125 at Friday's close. Immediate resistance can be seen at 1.3178(38.2%fib), an upside break can trigger rise towards 1.3223(Aug 29th high).On the downside, immediate support is seen at 1.3092(38.2%fib), a break below could take the pair towards 1.3052(61.8%fib).
AUD/USD: The Australian dollar steadied on Monday as the U.S. dollar weakened ahead of a likely interest rate cut by the Federal Reserve later this week. The probability of a 50-basis-point cut on Wednesday has risen to 59%, as media reports have heightened expectations of a more aggressive easing cycle.Looking ahead, Australia will release its August jobs data on Thursday. Recent data have consistently exceeded expectations, and economists forecast an addition of 30,000 jobs, with the unemployment rate expected to remain steady at 4.2%. The Aussie held steady at $0.6725, after closing last week with a modest gain of 0.5%.Immediate resistance can be seen at 0.6739(38.2%fib), an upside break can trigger rise towards 0.6791(23.6%fib).On the downside, immediate support is seen at 0.6697(Daily low), a break below could take the pair towards 0.6671(38.2%fib).
USD/JPY: The dollar dipped to lowest level in a year against the yen on Monday in trading thinned by a holiday in Japan, as market participants increasingly expected an oversized rate cut by the Federal Reserve later this week. Market participants increasingly anticipate an aggressive rate cut by the Federal Reserve later this week. Investors are also looking to the Bank of Japan's interest rate decision on Friday, when it is expected to keep its short-term policy rate target steady at 0.25%, having raised rates twice already this year.BOJ board members have indicated they are keen to see rates higher, and the narrowing gap between rates in Japan and other major currencies has spurred the yen higher and caused billions of dollars worth of yen-funded carry trades to be unwound. The dollar traded at 140.01 yen at 1140 GMT, after falling to as low as 139.58 yen in the session.Top of FormBottom of FormStrong resistance can be seen at 141.31(Daily high), an upside break can trigger rise towards 142.20(38.2%fib). On the downside, immediate support is seen at 140.00 (Psychological level), a break below could take the pair towards 139.66(Lower BB).
Equities Recap
European shares were muted at the start of a data-heavy week, with the Federal Reserve's anticipated start to its long-awaited monetary easing cycle taking center stage. Many investors are expecting a larger-than-anticipated rate reduction.
UK's benchmark FTSE 100 was down by 0.05 percent, Germany's Dax was down by 0.23 percent, France’s CAC finished the was down by 0.18 percent.
Commodities Recap
Gold prices charged to a record high on Monday as a weaker dollar and the prospects of aggressive U.S. monetary policy easing boosted non-yielding bullion's appeal.
Spot gold was up 0.4% at $2,586.04 an ounce by 0914 GMT after touching a record peak of $2,589.59. U.S. gold futures edged up by 0.1% to $2,613.40.
Oil prices edged higher on Monday as disruptions to U.S. Gulf oil infrastructure countered ongoing demand concerns following new Chinese data. Investors are also awaiting a likely U.S. interest rate cut later this week
Brent crude futures for November were up 46 cents, or 0.64%, at $72.07 a barrel by 1207 GMT. U.S. crude futures for October rose 52 cents, or 0.76%, to $69.17.
