Market Roundup
•Spanish Core CPI (YoY) (Aug) 2.7%,2.7% forecast 2.8% previous
•Spanish CPI (MoM) (Aug) 0.0%,0.0% forecast -0.5% previous
•Spanish CPI (YoY) (Aug) 2.3%,2.2% forecast 2.8% previous
•Spanish HICP (MoM) (Aug) 0.0%,0.0% forecast -0.7% previous
•Spanish HICP (YoY) (Aug) 2.4% , 2.4% forecast 2.9% previous
Looking Ahead Economic Data(GMT)
•12:15 EU Sep Deposit Facility Rate 3.50% forecast,3.75% previous
•12:15 EU ECB Marginal Lending Facility 4.50% previous
•12:30 US PPI ex. Food/Energy/Transport (MoM) (Aug) 0.3% previous
•12:30 US PPI ex. Food/Energy/Transport (YoY) (Aug) 3.3% previous
•12:30 US Continuing Jobless Claims 1,850K 1,838K previous
•12:30 US Core PPI (MoM) (Aug) 0.2% forecast, 0.0% previous
•12:30 US Core PPI (YoY) (Aug) 2.5% forecast, 2.4% previous
•12:30 US Initial Jobless Claims 227K forecast, 227K previous
•12:30 US Jobless Claims 4-Week Avg. 230.00K previous
•12:30 US PPI (MoM) (Aug) 0.1% forecast, 0.1% previous
•12:30 US PPI (YoY) (Aug) 1.8% forecast, 2.2% previous
•12:30 Canada Building Permits (MoM) (Jul) 6.5% forecast, -13.9% previous
Looking Ahead Events And Other Releases (GMT)
• 12:15 ECB Monetary Policy Statement
• 12:15 ECB Sep Interest Rate Decision 3.65% forecast, 4.25% previous
•12:30 ECB Press Conference
•14:15 ECB President Lagarde Speaks
Currency Forecast
EUR/USD: The euro remained largely unchanged on Thursday ahead of a widely anticipated interest rate cut from the European Central Bank, with traders focussed on the policy outlook to gauge the extent of further rate cuts. Investors are now focused on the European Central Bank's policy decision later in the day, with a rate cut almost certain; however, the market is questioning whether the ECB will implement further cuts in October and December. ECB President Christine Lagarde is expected to maintain the bank's stance of making decisions on a meeting-by-meeting basis based on incoming data. Immediate resistance can be seen at 1.1071(38.2%fib), an upside break can trigger rise towards 1.1118(23.6%fib).On the downside, immediate support is seen at 1.1006(50%fib), a break below could take the pair towards 1.0968 (61.8%fib).
GBP/USD: The British pound was steady on Thursday after reaching a three-week low against the dollar the previous day, following data that indicated the UK economy stagnated in July. Attention has now shifted to next week’s crucial inflation report and central bank meeting.Data released on Wednesday by Britain’s Office for National Statistics revealed no change in economic output for July, contrary to a Reuters poll forecast of a 0.2% month-on-month increase. Despite recent stagnation, the UK economy has demonstrated more robust growth compared to the eurozone since the start of the year.Sterling was largely unchanged on the day at $1.3052, trading within a narrow range just above the $1.3002 it reached on Wednesday, its lowest level since August 20. Immediate resistance can be seen at 1.3110(Daily high), an upside break can trigger rise towards 1.3156(23.6%fib).On the downside, immediate support is seen at 1.3034(38.2%fib), a break below could take the pair towards 1.3000(psychological level).
AUD/USD: The Australian dollar strengthened on Thursday, buoyed by a rebound in global stock markets and recovery in commodities prices helped stabilize risk sentiment. The European Central Bank is widely anticipated to reduce rates by 25 basis points later in the day, with the key uncertainty being whether it will signal further cuts for October and December. Meanwhile, a slightly higher-than-expected core U.S. consumer price index reading of 0.28% led markets to largely abandon hopes for a substantial rate cut by the Federal Reserve next week. This development prompted investors to lower the likelihood of an interest rate cut by the Reserve Bank of Australia (RBA) as soon as November. The Aussie held at $0.6674, after bouncing overnight from the 200-day moving average at $0.6618. Immediate resistance can be seen at 0.6690 (38.2%fib), an upside break can trigger rise towards 0.6758(23.6%fib).On the downside, immediate support is seen at 0.6639 (50%fib), a break below could take the pair towards 0.6607(Lower BB).
USD/JPY: The dollar edged higher against the yen on Thursday, buoyed by U.S. inflation data that increased expectations for a modest 25 basis point rate cut by the Federal Reserve at its next policy meeting. Following a volatile session the previous day, where the dollar plunged by up to 1.24% to its lowest level this year before recovering, the currency gained against the yen after the consumer price data was released.Early on Wednesday, Bank of Japan board member Junko Nakagawa reinforced the central bank's tightening stance, suggesting that low real rates allow for further rate hikes. On Thursday, another BOJ board member, Naoki Tamura, known for his hawkish views, remarked that the market’s anticipated pace of tightening might be too gradual, which helped alleviate some of the yen’s losses. Strong resistance can be seen at 143.71 (Sep 9th high), an upside break can trigger rise towards 145.00 (Psychological level). On the downside, immediate support is seen at 141.90(23.6%fib), a break below could take the pair towards 141.49 (Lower BB).
Equities Recap
European shares rose 1% on Thursday, driven by strong gains in technology stocks. Investors are anticipating a policy decision from the European Central Bank later in the day, with a rate cut widely expected.
UK's benchmark FTSE 100 was up by 1.00 percent, Germany's Dax was up by 1.33 percent, France’s CAC finished the was up by 1.01 percent.
Commodities Recap
Oil prices rose almost 2% on Thursday, extending a rebound spurred by concern over Hurricane Francine's impact on U.S. output, though a gloomy demand outlook capped gains.
Brent crude futures for November rose $1.24, or 1.8%, to $71.85 a barrel by 1008 GMT. U.S. crude futures for October were up $1.26, or 1.9%, at $68.57.
