• Prior 94
• Services confidence 98
• Prior 95
• Manufacturing confidence 99
• Prior 95

That marks a slight bounce back after the plunge in sentiment in July. The improvement here is also reflected in employment conditions, which picked up in August as well. The reading there moved up to 98, up from 96 in July.

This article was written by Justin Low at www.forexlive.com.

Global Markets:

•  Asian Stock Markets : Nikkei down 0.11%, Shanghai Composite down 0.03%, Hang Seng down 0.43% ASX down 0.18%
• Commodities : Gold at $2527.35 (0.39%), Silver at $29.23 (0.71%), Brent Oil at $77.2 (-0.09%), WTI Oil at $73.02 (-0.08%)
• Rates : US 10-year yield at 3.845, UK 10-year yield at 3.963, Germany 10-year yield at 2.245

News & Data:

• (USD) Unemployment Claims  232K vs 232K expected
• (USD) Flash Manufacturing PMI  48.0 vs 49.5 expected
• (USD) Flash Service PMI  55.2 vs 54 expected

Markets Update:

Asia-Pacific markets mostly declined on Friday as investors awaited remarks from U.S. Federal Reserve Chairman Jerome Powell at the Jackson Hole gathering of global central bankers. Powell’s previous speeches at this event have often provided key insights into U.S. monetary policy.

In Japan, July’s headline inflation remained steady at 2.8%, unchanged from June. Core inflation, which excludes fresh food, rose to 2.7%, aligning with economists’ expectations and slightly higher than June’s 2.6%. However, the “core-core” inflation rate, excluding both fresh food and energy, dropped to 1.9% in July from 2.2% in June, marking its lowest level since September 2022.

Japan’s Nikkei 225 reversed earlier gains, ending down 0.11%, while the Topix edged up slightly. Bank of Japan Governor Kazuo Ueda addressed the country’s parliament, emphasizing the central bank’s heightened vigilance in response to market instability.

Elsewhere in the region, South Korea’s Kospi fell 0.51%, and the small-cap Kosdaq declined 0.58%. Australia’s S&P/ASX 200 dropped 0.18%. Hong Kong’s Hang Seng index was down 0.43%, and mainland China’s CSI 300 extended its losing streak to four days.

Overnight in the U.S., the Nasdaq Composite led losses, falling 1.67%, while the S&P 500 slipped 0.89%, and the Dow Jones Industrial Average declined 0.43%.

Upcoming Events: 

• 12:30 PM GMT – CAD Core Retail Sales m/m
• 12:30 PM GMT – CAD Retail Sales m/m
• 2:00 PM GMT – USD Existing Home Sales
• 2:00 PM GMT – USD Fed Chair Powell Speaks
• 3:00 PM GMT – GBP BOE Gov Bailey Speaks

The post Friday 23rd August 2024: Asia-Pacific Markets Fall Ahead of Powell’s Speech first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish continuation towards the 1st resistance

Pivot: 101.01
Supporting reasons: Identified as swing low support, indicating a potential area where buyers could enter the market, leading to a bullish bounce.

1st support: 100.45
Supporting reasons: Supported by the 61.80% Fibonacci Projection, highlighting a significant level where the price might find support if it falls below the pivot.

1st resistance: 102.16
Supporting reasons: Marked as pullback resistance, reinforced by the 50% Fibonacci Retracement, suggesting an area where the price might encounter selling pressure, potentially reversing the bullish move.

EUR/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could potentially make a bearish continuation towards the 1st support.

Pivot: 1.1177
Supporting reasons: Identified as swing high resistance, indicating a potential area where the price may face selling pressure and reverse.

1st support: 1.1045
Supporting reasons: Marked by pullback support, reinforced by the 61.80% Fibonacci Retracement, suggesting a significant level where the price might find support after a bearish move.

1st resistance: 1.1251
Supporting reasons: Another swing high resistance, indicating a historical point where previous rallies faced selling pressure or reversed.

EUR/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and head towards the 1st resistance.

Pivot: 159.35
Supporting reasons: Identified as an overlap support and 50% Fibonacci Retracement, indicating a potential level where buyers may enter the market.

1st support: 155.86
Supporting reasons: Identified as swing low support and 78.60% Fibonacci Retracement, suggesting a significant area where previous declines have found support.

1st resistance: 163.80
Supporting reasons: Identified as multi-swing high resistance, indicating a historical point where previous rallies have faced selling pressure or reversed.

EUR/GBP:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop to the 1st support.

Pivot: 0.8509
Supporting reasons: Identified as pullback resistance, suggesting a level where the price may face selling pressure after a minor upward move.

1st support: 0.8454
Supporting reasons: Marked as pullback support and reinforced by the 78.60% Fibonacci Retracement, indicating a significant area where the price may find support.

1st resistance: 0.8544
Supporting reasons: Identified as swing high resistance, indicating a potential area where the price may reverse after a bullish move.

GBP/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could potentially make a bearish reaction off the pivot and drop to the 1st support.

Pivot: 1.3126
Supporting reasons: Identified as swing high resistance, indicating a potential area where the price may face selling pressure and reverse.

1st support: 1.2944
Supporting reasons: Marked as an overlap support level, reinforced by the 38.20% Fibonacci Retracement, suggesting a significant level where the price might find support after a bearish move.

1st resistance: 1.3275
Supporting reasons: Another swing high resistance, indicating a historical point where previous rallies faced selling pressure or reversed.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could potentially make a bearish continuation towards the 1st support.

Pivot: 191.90
Supporting reasons: Identified as multi-swing high resistance, reinforced by the 61.80% Fibonacci Retracement, indicating a level where the price may encounter selling pressure.

1st support: 189.24
Supporting reasons: Marked as an overlap support, suggesting an area where the price may find support after a decline.

1st resistance: 195.97
Supporting reasons: Identified as pullback resistance, reinforced by the 78.60% Fibonacci Retracement, indicating a potential level where the price may face resistance after a bullish correction.

USD/CHF:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce off the pivot and head towards the 1st resistance.

Pivot: 0.8502
Supporting reasons: Identified as an overlap support level, reinforced by the 78.60% Fibonacci Retracement, indicating a potential area where the price may find support and reverse upwards.

1st support: 0.8425
Supporting reasons: Marked as swing low support, suggesting a significant level where previous declines found support.

1st resistance: 0.8620
Supporting reasons: Identified as pullback resistance, indicating a potential area where the price may face selling pressure after a bullish move.

USD/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish continuation towards the 1st resistance

Pivot: 144.62
Supporting reasons: Identified as pullback support, reinforced by the 61.80% Fibonacci Retracement and 100% Fibonacci Projection, indicating a confluence that strengthens this level as a potential area for a bullish reversal.

1st support: 141.73
Supporting reasons: Identified as a swing low support, suggesting a key level where the price might find strong buying interest.

1st resistance: 149.36
Supporting reasons: Identified as swing high resistance, indicating a significant level where the price might encounter selling pressure.

USD/CAD:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 1.3560
Supporting reasons: Identified as a pullback support, indicating a potential area where buying interests could pick up to stage a minor rebound.

1st support: 1.3466
Supporting reasons: Identified as a pullback support that aligns close to a 127.2% Fibonacci extension level, indicating a potential area where price could find strong support.

1st resistance: 1.3636
Supporting reasons: Identified as a pullback resistance that aligns with a 38.2% Fibonacci retracement level, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to pull back towards the 1st support.

Pivot: 0.6752
Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify.

1st support: 0.6701
Supporting reasons: Identified as an overlap support, suggesting a potential area where price could find support.

1st resistance: 0.6790
Supporting reasons: Identified as a swing-high resistance, indicating a significant area that could halt further upward movement.

NZD/USD

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to pull back towards the 1st support.

Pivot: 0.6167
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

1st support: 0.6125
Supporting reasons: Identified as an overlap support that aligns close to a 23.6% Fibonacci retracement level, suggesting a potential area where price could find strong support.

1st resistance: 0.6216
Supporting reasons: Identified as a swing-high resistance that aligns with a 127.2% Fibonacci extension level, indicating a significant area that could halt further upward movement.

US30 (DJIA):

Potential Direction: Bearish

Overall Momentum of the Chart: Bullish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to pull back towards the 1st support.

Pivot: 41,042.19

Supporting reasons: Identified as a pullback resistance, suggesting a potential area where selling pressures could intensify.

1st Support: 40,475.26

Supporting Reasons: Identified as an overlap support, suggesting a potential area where price could find support.

1st Resistance: 41,352.92

Supporting Reasons: Identified as a swing-high resistance that aligns close to the all-time high, indicating a significant area that could halt further upward movement.

DE40 (DAX):

Potential Direction: Bearish

Overall Momentum of the Chart: Bullish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to pull back towards the 1st support.

Pivot: 18,593.70

Supporting reasons: Identified as a pullback resistance, suggesting a potential area where selling pressures could intensify.

1st Support: 18,250.70

Supporting Reasons: Identified as a pullback support, indicating a potential area where price could find support.

1st Resistance: 18,760.10

Supporting Reasons: Identified as a swing-high resistance that aligns close to the all-time high, indicating a significant area that could halt further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish

Overall Momentum of the Chart: Bullish

Price has made a bullish bounce off the pivot and could potentially rise towards the 1st resistance.

Pivot: 5,561.63

Supporting reasons: Identified as a pullback support, suggesting a potential area where buying interests could pick up to resume the uptrend.

1st support: 5,496.71

Supporting reasons: Identified as an overlap support that aligns close to a 23.6% Fibonacci retracement level, suggesting a potential area where price could find support.

1st resistance: 5,669.89

Supporting reasons: Identified as a swing-high resistance that aligns close to a 127.2% extension Fibonacci level, suggesting a critical area that could halt further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 61,687.65

Supporting reasons: Identified as a pullback resistance that aligns with a 61.8% Fibonacci retracement level, indicating a potential area where selling pressures could intensify.

1st support: 57,039.06

Supporting reasons: Identified as a pullback support, indicating a significant area where price has found support in the past.

1st resistance: 65,483.09

Supporting reasons: Identified as an overlap resistance that aligns with a 78.6% Fibonacci retracement level, indicating a potential barrier that could halt further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 2,523.64

Supporting reasons: Identified as an overlap support that aligns with a 38.2% Fibonacci retracement level, indicating a potential area where buying interests could pick up to stage a rebound.

1st Support: 2,289.04

Supporting Reasons: Identified as a pullback support that aligns close to a 61.8% Fibonacci retracement level, indicating a potential area where price could find support.

1st Resistance: 2,805.94

Supporting Reasons: Identified as a pullback resistance  that aligns with a 50% Fibonacci retracement level, indicating a historical barrier where that could halt further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish

Overall Momentum of the Chart: Bearish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to drop towards the 1st support.

Pivot: 75.38

Supporting Reasons: Identified as a pullback resistance that aligns close to a 38.2% Fibonacci retracement level, suggesting a potential area where selling pressures could intensify to resume the downtrend. The presence of the bearish Ichimoku Cloud adds further significance to the strength of this resistance zone.

1st Support: 72.61

Supporting Reasons: Identified as a multi-swing-low support, indicating a significant area where price has found support in the past.

1st Resistance: 77.32

Supporting Reasons: Identified as a pullback resistance that aligns close to a 61.8% Fibonacci retracement level, indicating a potential barrier that could halt further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop to the 1st support.

Pivot: 2498.86
Supporting reasons: Identified as pullback resistance, indicating a level where the price may encounter selling pressure after a temporary recovery.

1st support: 2458.29
Supporting reasons: Marked as pullback support, suggesting an area where the price may find support after declining from the pivot.

1st resistance: 2531.92
Supporting reasons: Identified as swing high resistance, indicating a potential level where the price may face resistance if it attempts a rally.

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The post Friday 23rd August 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 23 August 2024

What happened in the Asia session?

Retail sales in New Zealand fell more than anticipated as it declined 1.2% QoQ in the second quarter of this year. After rising marginally 0.4% QoQ in the first quarter, sales fell once more to register 10 quarters of declining sales since the third quarter of 2021. The largest contributors to this decline were categories such as electrical and electronic goods retailing; motor vehicle and parts retailing; food and beverage services; and clothing, footwear, and personal accessories. Despite the bleak outlook on consumer spending, the Kiwi stabilized around 0.6130 after hitting an overnight high of 0.6178.

What does it mean for the Europe & US sessions?

Retail sales in Canada declined strongly in May falling 0.8% MoM to mark the sharpest decline in 14 months. The estimate for June points to another month of lower sales but at a slower pace of -0.3% MoM. Should sales fare worse than expected, the Loonie could come under pressure which would potentially offer some support for USD/CAD.

Bank of England (BoE) Governor Andrew Bailey will be speaking at the Jackson Hole Economic Policy Symposium in Wyoming following Federal Reserve Chairman Jerome Powell’s speech. His remarks could inject higher volatility for the Pound later today.

The Dollar Index (DXY)

Key news events today

Fed Chair Powell Speaks (2:00 pm GMT)

What can we expect from DXY today?

Federal Reserve Chairman Jerome Powell will be speaking about the economic outlook at the Jackson Hole Economic Policy Symposium in Wyoming. Following the dovish FOMC minutes that were released on Friday, market participants will be looking forward to further clues and insights from Powell which would drive the direction of the dollar and maybe even inject some volatility into financial markets later today.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the eighth meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals continue to move into better balance.
• The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have moderated, and the unemployment rate has moved up but remains low.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 17 to 18 September 2024.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

Fed Chair Powell Speaks (2:00 pm GMT)

What can we expect from Gold today?

Federal Reserve Chairman Jerome Powell will be speaking about the economic outlook at the Jackson Hole Economic Policy Symposium in Wyoming. Following the dovish FOMC minutes that were released on Friday, market participants will be looking forward to further clues and insights from Powell which would drive the direction of gold prices and maybe even inject some volatility into financial markets later today.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Robust U.S. macroeconomic data caused the Aussie to reverse from 0.6735 to drop as low as 0.6697 overnight. However, this currency pair stabilized around 0.6700 to edge higher towards 0.6715 as Asian markets came online – these are the support and resistance levels for today.

Support: 0.6700

Resistance: 0.6750

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the sixth consecutive pause.
• Inflation has fallen substantially since its peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance but it still remains above the midpoint of the 2 to 3% target range.
• The CPI rose by 3.9% over the year to the June quarter, demonstrating that inflation is proving persistent. In year-ended terms, underlying inflation has now been above the midpoint of the target for 11 consecutive quarters while quarterly underlying CPI inflation has fallen very little over the past year.
• The central forecasts set out in the latest SMP are for inflation to return to the target range of 2 to 3% in late 2025 and approach the midpoint in 2026. This represents a slightly slower return to target than forecast in May, based on estimates that the gap between aggregate demand and supply in the economy is larger than previously thought.
• Momentum in economic activity has been weak, as evidenced by slow growth in GDP, a rise in the unemployment rate and reports that many businesses are under pressure. In addition, there is a risk that household consumption picks up more slowly than expected, resulting in continued subdued output growth and a noticeable deterioration in the labour market.
• Inflation in underlying terms remains too high, and the latest projections show that it will be some time yet before inflation is sustainably in the target range while recent data have reinforced the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out.
• Policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range and will rely upon the incoming data and the evolving assessment of risks to guide its decisions.
• Next meeting is on 5 November 2024.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

Retail Sales (10:45 pm GMT 22nd August)

What can we expect from NZD today?

Retail sales in New Zealand fell more than anticipated as it declined 1.2% QoQ in the second quarter of this year. After rising marginally 0.4% QoQ in the first quarter, sales fell once more to register 10 quarters of declining sales since the third quarter of 2021. The largest contributors to this decline were categories such as electrical and electronic goods retailing; motor vehicle and parts retailing; food and beverage services; and clothing, footwear, and personal accessories. Despite the bleak outlook on consumer spending, the Kiwi stabilized around 0.6130 after hitting an overnight high of 0.6178.

Central Bank Notes:

• The Monetary Policy Committee agreed to reduce the OCR by 25 basis points, bringing it down to 5.25% in August as inflation converges on target.
• The Committee is confident that inflation is returning to within its 1-3% target band as surveyed inflation expectations, firms’ pricing behaviour, headline inflation, and a variety of core inflation measures are moving consistent with low and stable inflation.
• Economic growth remains below trend and inflation is declining across advanced economies – imported inflation into New Zealand has declined to be more consistent with pre-pandemic levels.
• Services inflation remains elevated but is also expected to continue to decline, both at home and abroad, in line with increased spare economic capacity.
• Consumer price inflation in New Zealand is expected to remain near the target mid-point over the foreseeable future.
• A broad range of high-frequency indicators point to a material weakening in domestic economic activity in recent months – these include various survey measures of business activity, electronic card transactions, vehicle traffic, house sales, filled jobs, and job vacancies; these indicators collectively provide a consistent signal that the economy contracted in recent months.
• The pace of further easing will depend on the Committee’s confidence that pricing behaviour remains consistent with a low inflation environment, and that inflation expectations are anchored around the 2% target.
• Next meeting is on 9 October 2024.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Demand for the dollar picked up overnight as robust macroeconomic data from the U.S. saw bidders lift USD/JPY off yesterday’s low at 145 to climb above 146.50 overnight. This currency pair pulled back at the beginning of the Asia session to trade around 145.75 – these are the support and resistance levels for today.

Support: 144.30

Resistance: 149.40

Central Bank Notes:

• The Policy Board of the Bank of Japan decided, by a 7-2 majority vote, to set the following guideline for money market operations for the intermeeting period and decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25% while reducing its purchase amount of Japanese government bonds (JGB) by a unanimous vote.
  2. The Bank decided, by a unanimous vote, on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• The year-on-year rate of increase in the CPI (all items less fresh food) is likely to be at around 2.5% for fiscal 2024 and then be at around 2% for fiscal 2025 and 2026.
• Meanwhile, underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• In the second half of the projection period, it is likely to be at a level that is generally consistent with the price stability target of 2%.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• Next meeting is on 20 September 2024.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

Robust U.S. macroeconomic data caused the Euro to retreat from yesterday’s high of 1.1165 to fall lower towards 1.1100. This currency pair found a floor around this region to edge higher towards 1.1130 as Asian markets came online – these are the support and resistance levels for today.

Support: 1.1030

Resistance: 1.1180

Central Bank Notes:

• The Governing Council today decided to keep the three key ECB interest rates unchanged in July, following a 25 basis points cut in June.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4.25%, 4.50% and 3.75% respectively.
• Monetary policy is keeping financing conditions restrictive but at the same time, domestic price pressures are still high, services inflation is elevated and headline inflation is likely to remain above the target well into next year.
• While some measures of underlying inflation ticked up in May owing to one-off factors, most measures were either stable or edged down in June.
• The incoming information indicates that the euro area economy grew in the second quarter, but likely at a slower pace than in the first quarter.
• Services continue to lead the recovery, while industrial production and goods exports have been weak – investment indicators point to muted growth in 2024, amid heightened uncertainty.
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• Next meeting is on 12 September 2024.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Despite demand for the greenback picking up overnight, USD/CHF was relatively unchanged as it hovered around 0.8520 for most of the U.S. session. This currency pair was trading around 0.8510 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8500

Resistance: 0.8560

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the second consecutive meeting, going from 1.50% to 1.25% in June.
• The underlying inflationary pressure has decreased again compared to the previous quarter but inflation had risen slightly since the last monetary policy assessment, and stood at 1.4% in May.
• The inflation forecast puts average annual inflation at 1.3% for 2024, 1.1% for 2025 and 1.0% for 2026, based on the assumption that the SNB policy rate is 1.25% over the entire forecast horizon.
• Swiss GDP growth was moderate in the first quarter of 2024 with the services sector continuing to expand, while manufacturing stagnated.
• Growth is likely to remain moderate in Switzerland in the coming quarters as the SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Next meeting is on 26 September 2024.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

BoE Gov Bailey Speaks (3:00 pm GMT)

What can we expect from GBP today?

Bank of England (BoE) Governor Andrew Bailey will be speaking at the Jackson Hole Economic Policy Symposium in Wyoming following Federal Reserve Chairman Jerome Powell’s speech. His remarks could inject higher volatility for the Pound later today.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 5-to-4 to reduce its Official Bank Rate by 25 basis points to 5.00% on 1st August 2024.
• Five members preferred to reduce the Bank Rate by 25 basis points to 5%, an increase of two from the previous meeting while four members preferred to maintain the Bank Rate at 5.25%.
• Twelve-month CPI inflation was at the MPC’s 2% target in both May and June but it is expected to increase to around 2.75% in the second half of this year as declines in energy prices last year fall out of the annual comparison, revealing more clearly the prevailing persistence of domestic inflationary pressures. Private sector regular average weekly earnings growth has fallen to 5.6% in the three months to May, and services consumer price inflation has declined to 5.7% in June.
• GDP has picked up quite sharply so far this year, but underlying momentum appears weaker. GDP had grown by 0.7% in 2024 Q1, with that strength appearing to have continued into Q2. Growth in the first half of the year had been stronger than expected at the time of the May Report. 
• Business surveys had continued to point to underlying growth of around 0.3% per quarter, somewhat weaker than headline GDP growth. A margin of slack should emerge in the economy as GDP falls below potential and the labour market eases further.
• The Committee noted that it is now appropriate to reduce slightly the degree of policy restrictiveness but monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.
• The Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• Next meeting is on 19 September 2024.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

Retail Sales (12:30 pm GMT)

What can we expect from CAD today?

Retail sales in Canada declined strongly in May falling 0.8% MoM to mark the sharpest decline in 14 months. The estimate for June points to another month of lower sales but at a slower pace of -0.3% MoM. Should sales fare worse than expected, the Loonie could come under pressure which would potentially offer some support for USD/CAD.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points to 4.50% while continuing its policy of balance sheet normalization.
• Canada’s economic growth likely picked up to about 1.5% through the first half of this year and is forecasted to increase in the second half of 2024 and through 2025.
• Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.4% in 2026, reflecting stronger exports and a recovery in household spending and business investment as borrowing costs ease.
• CPI inflation moderated to 2.7% in June after increasing in May as broad inflationary pressures eased.
• The Bank’s preferred measures of core inflation have been below 3% for several months and the breadth of price increases across components of the CPI is now near its historical norm but shelter price inflation remains high, driven by rent and mortgage interest costs, and is still the biggest contributor to total inflation.
• These preferred measures of core inflation are expected to slow to about 2.5% in the second half of 2024 and ease gradually through 2025 and CPI inflation is expected to come down below core inflation in the second half of this year, largely because of base year effects on gasoline prices.
• There are signs of slack in the labour market with the unemployment rate rising to 6.4%, as employment continues to grow more slowly than the labour force and job seekers taking longer to find work. Wage growth is showing some signs of moderation, but remains elevated.
• The Governing Council’s future monetary policy decisions will be guided by incoming information and assessment of their implications for the inflation outlook.
• Recent data has increased the council’s confidence that inflation will continue to move towards the 2% target. Nonetheless, risks to the inflation outlook remain.
• Next meeting is on 4 September 2024.

Next 24 Hours Bias

Weak Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Following four consecutive trading days of decline, crude oil prices finally found a floor yesterday as WTI oil rose 1.6% overnight. This benchmark stabilized around $72.60 per barrel before rising strongly to climb above $74.50 during the U.S. session – it pulled back slightly as Asian markets came online to trade around $74.10 per barrel. 

Next 24 Hours Bias

Weak Bullish

The post IC Markets Europe Fundamental Forecast | 23 August 2024 first appeared on IC Markets | Official Blog.

• Rapid FX moves are undesirable
• Important for currencies to move in stable manner, reflecting fundamentals
• Intervention was response to speculative move and excessive volatility

I would argue that it was only effective as the BOJ also delivered on their part of the bargain. Otherwise, it would have been a repeat story to previous intervention attempts by Tokyo.

This article was written by Justin Low at www.forexlive.com.

IC Markets Asia Fundamental Forecast | 23 August 2024

What happened in the U.S. session?

After rising steadily since mid-May, unemployment claims in the U.S. appear to be trending lower as the latest data point printed in line with its forecast of 232K. Last week’s figures came in at 228K and this marks the third consecutive week of ‘softer’ claims which would indicate that the labour market is beginning to rebalance itself. 

After which, the S&P Global reported its flash Composite PMI for the U.S. where divergence between the manufacturing and services sectors grew even wider. Manufacturing missed its forecast of 49.5 to mark the second consecutive month of contraction while services posted a strong reading of 55.2 which helped lift the overall Composite reading to 54.1. Business activity growth remained robust in August, signalling a sustained economic expansion over the third quarter so far.

The above macroeconomic data points proved to function as a near-term bullish catalyst for the greenback, lifting the dollar index (DXY) off its recent low of 101 to rise as high as 101.62 overnight.

What does it mean for the Asia Session?

Retail sales in New Zealand fell more than anticipated as it declined 1.2% QoQ in the second quarter of this year. After rising marginally 0.4% QoQ in the first quarter, sales fell once more to register 10 quarters of declining sales since the third quarter of 2021. The largest contributors to this decline were categories such as electrical and electronic goods retailing; motor vehicle and parts retailing; food and beverage services; and clothing, footwear, and personal accessories. Despite the bleak outlook on consumer spending, the Kiwi stabilized around 0.6130 after hitting an overnight high of 0.6178.

The Dollar Index (DXY)

Key news events today

Fed Chair Powell Speaks (2:00 pm GMT)

What can we expect from DXY today?

Federal Reserve Chairman Jerome Powell will be speaking about the economic outlook at the Jackson Hole Economic Policy Symposium in Wyoming. Following the dovish FOMC minutes that were released on Friday, market participants will be looking forward to further clues and insights from Powell which would drive the direction of the dollar and maybe even inject some volatility into financial markets later today.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the eighth meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals continue to move into better balance.
• The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have moderated, and the unemployment rate has moved up but remains low.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 17 to 18 September 2024.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

Fed Chair Powell Speaks (2:00 pm GMT)

What can we expect from Gold today?

Federal Reserve Chairman Jerome Powell will be speaking about the economic outlook at the Jackson Hole Economic Policy Symposium in Wyoming. Following the dovish FOMC minutes that were released on Friday, market participants will be looking forward to further clues and insights from Powell which would drive the direction of gold prices and maybe even inject some volatility into financial markets later today.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Robust U.S. macroeconomic data caused the Aussie to reverse from 0.6735 to drop as low as 0.6697 overnight. However, this currency pair stabilized around 0.6700 to edge higher towards 0.6715 as Asian markets came online – these are the support and resistance levels for today.

Support: 0.6700

Resistance: 0.6750

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the sixth consecutive pause.
• Inflation has fallen substantially since its peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance but it still remains above the midpoint of the 2 to 3% target range.
• The CPI rose by 3.9% over the year to the June quarter, demonstrating that inflation is proving persistent. In year-ended terms, underlying inflation has now been above the midpoint of the target for 11 consecutive quarters while quarterly underlying CPI inflation has fallen very little over the past year.
• The central forecasts set out in the latest SMP are for inflation to return to the target range of 2 to 3% in late 2025 and approach the midpoint in 2026. This represents a slightly slower return to target than forecast in May, based on estimates that the gap between aggregate demand and supply in the economy is larger than previously thought.
• Momentum in economic activity has been weak, as evidenced by slow growth in GDP, a rise in the unemployment rate and reports that many businesses are under pressure. In addition, there is a risk that household consumption picks up more slowly than expected, resulting in continued subdued output growth and a noticeable deterioration in the labour market.
• Inflation in underlying terms remains too high, and the latest projections show that it will be some time yet before inflation is sustainably in the target range while recent data have reinforced the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out.
• Policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range and will rely upon the incoming data and the evolving assessment of risks to guide its decisions.
• Next meeting is on 5 November 2024.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

Retail Sales (10:45 pm GMT 22nd August)

What can we expect from NZD today?

Retail sales in New Zealand fell more than anticipated as it declined 1.2% QoQ in the second quarter of this year. After rising marginally 0.4% QoQ in the first quarter, sales fell once more to register 10 quarters of declining sales since the third quarter of 2021. The largest contributors to this decline were categories such as electrical and electronic goods retailing; motor vehicle and parts retailing; food and beverage services; and clothing, footwear, and personal accessories. Despite the bleak outlook on consumer spending, the Kiwi stabilized around 0.6130 after hitting an overnight high of 0.6178.

Central Bank Notes:

• The Monetary Policy Committee agreed to reduce the OCR by 25 basis points, bringing it down to 5.25% in August as inflation converges on target.
• The Committee is confident that inflation is returning to within its 1-3% target band as surveyed inflation expectations, firms’ pricing behaviour, headline inflation, and a variety of core inflation measures are moving consistent with low and stable inflation.
• Economic growth remains below trend and inflation is declining across advanced economies – imported inflation into New Zealand has declined to be more consistent with pre-pandemic levels.
• Services inflation remains elevated but is also expected to continue to decline, both at home and abroad, in line with increased spare economic capacity.
• Consumer price inflation in New Zealand is expected to remain near the target mid-point over the foreseeable future.
• A broad range of high-frequency indicators point to a material weakening in domestic economic activity in recent months – these include various survey measures of business activity, electronic card transactions, vehicle traffic, house sales, filled jobs, and job vacancies; these indicators collectively provide a consistent signal that the economy contracted in recent months.
• The pace of further easing will depend on the Committee’s confidence that pricing behaviour remains consistent with a low inflation environment, and that inflation expectations are anchored around the 2% target.
• Next meeting is on 9 October 2024.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Demand for the dollar picked up overnight as robust macroeconomic data from the U.S. saw bidders lift USD/JPY off yesterday’s low at 145 to climb above 146.50 overnight. This currency pair pulled back at the beginning of the Asia session to trade around 145.75 – these are the support and resistance levels for today.

Support: 144.30

Resistance: 149.40

Central Bank Notes:

• The Policy Board of the Bank of Japan decided, by a 7-2 majority vote, to set the following guideline for money market operations for the intermeeting period and decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25% while reducing its purchase amount of Japanese government bonds (JGB) by a unanimous vote.
  2. The Bank decided, by a unanimous vote, on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• The year-on-year rate of increase in the CPI (all items less fresh food) is likely to be at around 2.5% for fiscal 2024 and then be at around 2% for fiscal 2025 and 2026.
• Meanwhile, underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• In the second half of the projection period, it is likely to be at a level that is generally consistent with the price stability target of 2%.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• Next meeting is on 20 September 2024.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

Robust U.S. macroeconomic data caused the Euro to retreat from yesterday’s high of 1.1165 to fall lower towards 1.1100. This currency pair found a floor around this region to edge higher towards 1.1130 as Asian markets came online – these are the support and resistance levels for today.

Support: 1.1030

Resistance: 1.1180

Central Bank Notes:

• The Governing Council today decided to keep the three key ECB interest rates unchanged in July, following a 25 basis points cut in June.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4.25%, 4.50% and 3.75% respectively.
• Monetary policy is keeping financing conditions restrictive but at the same time, domestic price pressures are still high, services inflation is elevated and headline inflation is likely to remain above the target well into next year.
• While some measures of underlying inflation ticked up in May owing to one-off factors, most measures were either stable or edged down in June.
• The incoming information indicates that the euro area economy grew in the second quarter, but likely at a slower pace than in the first quarter.
• Services continue to lead the recovery, while industrial production and goods exports have been weak – investment indicators point to muted growth in 2024, amid heightened uncertainty.
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• Next meeting is on 12 September 2024.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Despite demand for the greenback picking up overnight, USD/CHF was relatively unchanged as it hovered around 0.8520 for most of the U.S. session. This currency pair was trading around 0.8510 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8500

Resistance: 0.8560

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the second consecutive meeting, going from 1.50% to 1.25% in June.
• The underlying inflationary pressure has decreased again compared to the previous quarter but inflation had risen slightly since the last monetary policy assessment, and stood at 1.4% in May.
• The inflation forecast puts average annual inflation at 1.3% for 2024, 1.1% for 2025 and 1.0% for 2026, based on the assumption that the SNB policy rate is 1.25% over the entire forecast horizon.
• Swiss GDP growth was moderate in the first quarter of 2024 with the services sector continuing to expand, while manufacturing stagnated.
• Growth is likely to remain moderate in Switzerland in the coming quarters as the SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Next meeting is on 26 September 2024.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

BoE Gov Bailey Speaks (3:00 pm GMT)

What can we expect from GBP today?

Bank of England (BoE) Governor Andrew Bailey will be speaking at the Jackson Hole Economic Policy Symposium in Wyoming following Federal Reserve Chairman Jerome Powell’s speech. His remarks could inject higher volatility for the Pound later today.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 5-to-4 to reduce its Official Bank Rate by 25 basis points to 5.00% on 1st August 2024.
• Five members preferred to reduce the Bank Rate by 25 basis points to 5%, an increase of two from the previous meeting while four members preferred to maintain the Bank Rate at 5.25%.
• Twelve-month CPI inflation was at the MPC’s 2% target in both May and June but it is expected to increase to around 2.75% in the second half of this year as declines in energy prices last year fall out of the annual comparison, revealing more clearly the prevailing persistence of domestic inflationary pressures. Private sector regular average weekly earnings growth has fallen to 5.6% in the three months to May, and services consumer price inflation has declined to 5.7% in June.
• GDP has picked up quite sharply so far this year, but underlying momentum appears weaker. GDP had grown by 0.7% in 2024 Q1, with that strength appearing to have continued into Q2. Growth in the first half of the year had been stronger than expected at the time of the May Report. 
• Business surveys had continued to point to underlying growth of around 0.3% per quarter, somewhat weaker than headline GDP growth. A margin of slack should emerge in the economy as GDP falls below potential and the labour market eases further.
• The Committee noted that it is now appropriate to reduce slightly the degree of policy restrictiveness but monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further.
• The Committee continues to monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• Next meeting is on 19 September 2024.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

Retail Sales (12:30 pm GMT)

What can we expect from CAD today?

Retail sales in Canada declined strongly in May falling 0.8% MoM to mark the sharpest decline in 14 months. The estimate for June points to another month of lower sales but at a slower pace of -0.3% MoM. Should sales fare worse than expected, the Loonie could come under pressure which would potentially offer some support for USD/CAD.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points to 4.50% while continuing its policy of balance sheet normalization.
• Canada’s economic growth likely picked up to about 1.5% through the first half of this year and is forecasted to increase in the second half of 2024 and through 2025.
• Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.4% in 2026, reflecting stronger exports and a recovery in household spending and business investment as borrowing costs ease.
• CPI inflation moderated to 2.7% in June after increasing in May as broad inflationary pressures eased.
• The Bank’s preferred measures of core inflation have been below 3% for several months and the breadth of price increases across components of the CPI is now near its historical norm but shelter price inflation remains high, driven by rent and mortgage interest costs, and is still the biggest contributor to total inflation.
• These preferred measures of core inflation are expected to slow to about 2.5% in the second half of 2024 and ease gradually through 2025 and CPI inflation is expected to come down below core inflation in the second half of this year, largely because of base year effects on gasoline prices.
• There are signs of slack in the labour market with the unemployment rate rising to 6.4%, as employment continues to grow more slowly than the labour force and job seekers taking longer to find work. Wage growth is showing some signs of moderation, but remains elevated.
• The Governing Council’s future monetary policy decisions will be guided by incoming information and assessment of their implications for the inflation outlook.
• Recent data has increased the council’s confidence that inflation will continue to move towards the 2% target. Nonetheless, risks to the inflation outlook remain.
• Next meeting is on 4 September 2024.

Next 24 Hours Bias

Weak Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Following four consecutive trading days of decline, crude oil prices finally found a floor yesterday as WTI oil rose 1.6% overnight. This benchmark stabilized around $72.60 per barrel before rising strongly to climb above $74.50 during the U.S. session – it pulled back slightly as Asian markets came online to trade around $74.10 per barrel. 

Next 24 Hours Bias

Weak Bullish

The post IC Markets Asia Fundamental Forecast | 23 August 2024 first appeared on IC Markets | Official Blog.

BOJ commentary is in the spotlight to start the day. Ueda is the main man appearing in parliament and he is doing his job to keep the calm in markets. USD/JPY is down on the day though, but it also owes to some slight softness in the dollar in general.

After keeping steadier yesterday amid a stronger US PMI data here, the dollar is slipping back into old habits today.

US futures are also seen higher while bond yields are down slightly, so that sums up the market mood as we count down to Fed chair Powell’s appearance later today. Overall, it fits with the theme that we’ve seen for the majority of the week thus far.

In European trading, there won’t be much on the agenda to shake things up. As such, markets will be left to their own devices before aiming scrutiny at Powell before the weekend comes along.

0645 GMT – France August business confidence

That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.

This article was written by Justin Low at www.forexlive.com.

Ueda and Suzuki:

• Bank of Japan Governor Ueda says real rates likely remain negative
• Japan finance minister Suzuki: Can’t tell whether strong yen has bigger demerits or merits
• BoJ Gov Ueda again: July rate hike was done under accommodative conditions
• Bank of England Governor Bailey speaking on Friday, August 23, 2024
• Bank of Japan Governor Ueda says FX moves could effect the Bank’s forecasts
• Bank of Japan Governor Ueda says the monetary policy path remains highly uncertain
• Bank of Japan Governor Ueda says BOJ’s policy steps were appropriate
• Japan fin min Suzuki says intervention action taken as excess volatility not desirable
• BoJ Ueda will adjust monetary easing if our economy price outlook is likely to be achieved
• BOJ Governor Ueda says concerns over US economy slowdown behind recent market rout

Other:

• UBS target USD2700 / oz for gold
• Citi says upside risk for oil, Brent possible bounce above $80
• PBOC sets USD/ CNY reference rate for today at 7.1358 (vs. estimate at 7.1480)
• Here’s the full agenda of all the speakers at Jackson Hole – some big hitters in here
• UBS is expecting Brent crude oil to recover into $85 – 90 range
• Japan data – July CPI Headline 2.8% y/y (vs. 2.7% expected)
• Japanese inflation data is due imminently – consensus expectation is for a higher CPI
• UK data – GfK Consumer Confidence steady at -13 in August (expected -12, prior -13)
• New Zealand Retail Sales Q2 2024 -1.2% q/q (expected -1.0%)
• El Erian says the market is pricing in too many Federal Reserve rate cuts – ‘overdoing it’
• UBS looks to fade rallies in the US dollar, move into other G10 currencies
• ICYMI: Eurozone Q2 wage growth eased. Time to crank up those Sept ECB rate cut forecasts!
• ICYMI – ECB’s Kazaks said he is “very much open” to discussing a September rate cut
• Forexlive Americas FX news wrap: US dollar strengthens after solid data
• Trade ideas thread – Friday, 23 August, insightful charts, technical analysis, ideas

Bank
of Japan Governor Ueda spoke in the Japanese parliament today. He
opened by saying that concerns about the slowing US economy are what
caused the recent market rout. The yen began its rise on this, taking
a cue that Bank of Japan was not going to back down from tightening.
While the yen didn’t surge it carried on with its rise through the morning. USD/JPY
fell from early highs just above 146.30 to lows around 145.30 before
stabilising 145.45/65 ish. Ueda comments continued for hours, with
Japanese
finance minister Suzuki chiming
in from time to time. Summary points are in the (many) posts above.

Prior
to Ueda’s testimony we had July inflation data from Japan. Headline
and core remained above the Bank of Japan 2% target while core-core
dipped below for the first time since September 2022.

News
and data flow was light otherwise. US Vice President Harris accepted
the Democrat Party nomination to run as its candidate for President,
as widely expected.

The
USD was a little weaker against other major FX, but in limited
ranges.

USD/JPY:

This article was written by Eamonn Sheridan at www.forexlive.com.

Japan finance minister Suzuki spoke earlier:

• Japan fin min Suzuki says intervention action taken as excess volatility not desirable

Catching up on a little more from the fin min:

• Important for govt to work closely with BOJ on economic, financial
  situations
• Can’t tell whether
  strong yen has bigger demerits or merits

USD/JPY has stabilised after its fall earlier today:

This article was written by Eamonn Sheridan at www.forexlive.com.

I posted earlier on the note on the UBS oil forecast:

• UBS is expecting Brent crude oil to recover into $85 – 90 range

Citi is looking for the same direction:

• Citi says upside risk for oil, Brent possible bounce above $80

UBS analysts now on gold:

target US$2,600/oz by the end of 2024

target US$2,700/ oz by the middle of 2025

Citing:

• central bank net buying remaining elevated in 2024 and 2025, but at a more moderate pace than in the first half of 2024
• small
  amount of selling by Singapore and China
• China announced though that’s its gold reserves sat unchanged for a third consecutivemonth
• jewellery demand has also moderated, UBS see seasonal tailwinds rising from Q4 2024

This article was written by Eamonn Sheridan at www.forexlive.com.

Reuters on Thursday with a snippet from Citi analysts, saying they see the possibility for a bounce in Brent crude to the low to mid US$80 range. Citit argue that upside risks in the market remain:

• from still-tight balances through August, heightened geopolitical risks across North Africa and the Middle East, the possibility of weather-related disruptions through hurricane season, and light managed money positioning

Earlier:

• UBS is expecting Brent crude oil to recover into $85 – 90 range

This article was written by Eamonn Sheridan at www.forexlive.com.

US Markets Retreat Ahead of Jackson Hole – Nasdaq Down 1.1%

US stock markets experienced a pullback overnight as investors reduced their positions ahead of key updates from central bankers later today. Tech stocks once again led the decline, with the Nasdaq losing 1.13%, the S&P 500 dropping 0.63%, and the Dow Jones falling 0.45%. US Treasury yields climbed higher, with the rate-sensitive 2-year yield jumping 7.7 basis points to 3.999% and the benchmark 10-year yield rebounding 8 basis points to 3.856%. The US dollar regained some lost ground after a weaker performance earlier in the week, with the DXY rising 0.4% to close around 101.41. Meanwhile, oil prices halted a five-day losing streak, with Brent crude up 1.83% and WTI up 1.86%, finishing the day at $77.44 and $73.27, respectively. Gold, however, retreated from recent historic levels, losing 1.2% to close at around $2,482.

A Pivotal Day for the Fed?

Today could prove pivotal for the Federal Reserve as Jerome Powell speaks at the annual Jackson Hole economic symposium. This forum has historically been used by previous Fed Chairs to signal significant policy shifts from the FOMC, and investors will be closely monitoring Powell’s remarks for any confirmation that the Fed is set to begin its long-awaited easing cycle. The Fed tends to maintain its course once it starts, which is why today’s speech is so critical. However, it’s worth noting that the Fed has already hinted that rate cuts will commence at the next meeting. The key question now is how aggressive these cuts will be both at the upcoming meeting and as we move towards the end of the year. While markets are still anticipating a 25-basis point cut next month, they are also pricing in an additional 75 basis points of cuts before 2025. This expectation is not reflected in the Fed’s dot plot, so there could be further market adjustments if Powell adheres to the Fed’s recent guidance.

Central Bankers in Focus for Markets Today

Central bank updates are the primary focus for traders today, with the potential for sharp market movements as key figures from around the world speak. In the Asian session, Bank of Japan Governor Kazuo Ueda is scheduled to testify before both houses of the Japanese Government in Tokyo regarding the recent rate hike. Traders are bracing for volatility in the yen, especially if there are any changes to the forward guidance during the testimony. The European session offers little on the event calendar, but things are expected to heat up as the US session begins. Attention will first turn to Canadian Retail Sales figures before swiftly shifting to Jackson Hole in Wyoming, where Fed Chair Jerome Powell and Bank of England Governor Andrew Bailey, among others, are set to speak.

The post General Market Analysis – 23/08/24 first appeared on IC Markets | Official Blog.