Articles

• General business conditions 11.5 versus -4.7 prior
• New orders 9.4 versus -7.9 prior
• Shipments 17.9 versus 0.3 prior
• Unfilled orders 2.1 versus -7.4 prior
• Delivery times -1.1 versus -3.2 prior
• Inventories 0.0 versus -10.6 prior
• Prices paid 23.2 versus 23.4 prior
• Prices received 7.4 versus 8.5 prior
• Number of employees -5.7 versus -6.7 prior
• Average employee workweek 2.9 versus -17.8 prior
• Supply availability -2.1 versus -2.1 prior
• Future business conditions 30.6 versus 22.9 prior
• Future new orders 39.9 versus 24.8 prior
• Future capital expenditures -2.1 versus 8.5 prior

Six-months ahead expectations:

• Future business conditions 30.6 versus 22.9 prior
• Future new orders 39.9 versus 24.8 prior
• Future capital expenditures -2.1 versus 8.5 prior

This article was written by Adam Button at www.forexlive.com.

Headlines:

• Dollar remains pinned down to start the new week
• Major central bank decisions to dominate the agenda in trading this week
• ECB’s de Guindos: Our projections show inflation will hover around 2% by end of 2025
• ECB’s Kažimír: Will almost surely wait until December for next rate cut
• Eurozone July trade balance €21.2 billion vs €22.3 billion prior
• Italy August final CPI +1.1% vs +1.1% y/y prelim
• Switzerland August producer and import prices +0.2% vs 0.0% m/m prior
• SNB total sight deposits w.e. 13 September CHF 466.8 bn vs CHF 455.9 bn prior

Markets:

• USD lags on the day
• European equities mixed; S&P 500 futures down 0.1%
• US 10-year yields down 0.5 bps to 3.643%
• Gold up 0.2% to $2,581.04
• WTI crude up 1.0% to $69.36
• Bitcoin down 0.8% to $58,663

There weren’t any headlines that really stood out on the session but that didn’t stop traders from kick starting the week with a bit of action.

It was all about positioning flows as the dollar lagged across the board, falling against the rest of the major currencies bloc. USD/JPY in particular dipped to a low of 139.57 during the session, its lowest since July last year. That before returning back to hover in and around the 140.00 mark.

The drop in the dollar comes as yields stay pressured, with 2-year Treasury yields in particular continuing to flirt with the 2023 low near 3.55%.

EUR/USD nudged higher to 1.1120 levels while GBP/USD is contesting the 1.3200 mark, up 0.5% on the day. Meanwhile, AUD/USD and NZD/USD are both up 0.6% to 0.6745 and 0.6190 respectively. That despite risk sentiment being more tentative during the session.

European indices are a little mixed after a slightly softer start, with US futures also keeping little changed overall.

In the commodities space, gold is holding up after the break to fresh record highs last week. The precious metal is up another 0.2% to $2,581 and hoping to continue that form into the Fed later this week.

It’s all about the major central bank meetings this week and the Fed is the one most anticipated. That will keep markets on edge with positioning flows set to dominate proceedings in the run up to the meeting.

For now, it looks like traders are looking for a more dovish Fed at least.

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

The post Ex Dividend 17/09/2024 first appeared on IC Markets | Official Blog.

The greenback is the laggard in trading today and is being pushed lower in European morning trade. USD/JPY is the standout as it nudges under the 140.00 mark but it’s not the only pair on the move. GBP/USD is up 0.5% to near 1.3200 and AUD/USD also up 0.5% to 0.6740 currently. Meanwhile, EUR/USD is also seen up 0.5% to 1.1128 as it threatens to break a couple of key Fib levels:

The 50.0 and 61.8 Fib retracement levels at 1.1101 and 1.1125 respectively are looking to give way today. And that could set the pair up for stronger gains if the Fed plays ball later this week.

But that’s the caveat though, is that whatever moves we’re seeing with the dollar here is going to need vindication from the Fed.

Traders are pricing in a more dovish Fed as they look for ~59% odds of a 50 bps rate cut. That just means they are either hoping for that to happen or the Fed to turn to rather dovish even if delivering a 25 bps rate cut. It might be an understatement to say that the scope for the Fed disappointing market players this week may be quite large. But it is what it is at the moment.

In the bond market, 2-year Treasury yields are continuing to flirt with the 2023 low near 3.55%. And that’s another key threshold to watch out for before we get to the FOMC meeting on Wednesday. A break lower there will likely help to pin the dollar down further in the meantime.

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

• Prior €22.3 billion

Comparing to last year, the euro area trade balance is showing a surplus of roughly €128 billion from January to July. And that compares to the roughly €4 billion surplus only in the same period last year. Energy price developments are of course a big factor, leading to a drop in imports. And that in turn helping with the overall picture above.

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

• Prior +1.3%
• HICP +1.2% vs +1.3% y/y prelim
• Prior +1.6%

Core annual inflation is seen stable at 1.9% and it has been relatively steady over the last few months. That’s a somewhat positive takeaway but this trend is still not yet observed in Europe’s largest economy i.e. Germany.

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

• Domestic sight deposits CHF 458.2 bn vs CHF 447.3 bn prior

That’s the highest reading for total sight deposits since the middle of May this year. And that perhaps suggest the SNB might be in the market to rein in the strength in the franc. That would not be too surprising as they have dubbed it to be an issue in recent weeks/months.

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

A busy week lies ahead in terms of economic events, but Monday kicks off slowly with no significant scheduled releases.

On Tuesday, the highlight will be the Canadian inflation data, followed by the U.S. retail sales m/m figures.

Wednesday brings inflation data from the U.K., alongside building permits, housing starts, and the most anticipated event of the week — the FOMC monetary policy announcement for the U.S.

Thursday is packed with key reports: New Zealand will release its GDP q/q data, while Australia will publish its employment change and unemployment rate figures. In the U.K., the BoE will announce its monetary policy decision. Meanwhile, in the U.S., we’ll see unemployment claims, the Philly Fed manufacturing index, and existing home sales.

On Friday, all eyes will be on the BoJ monetary policy announcement. Additionally, BoC Governor Macklem will speak at the National Bureau of Economic Research’s Economics of Artificial Intelligence Conference in Toronto. Canada will also release its retail sales m/m data.

Canadian overall inflation data is expected to show signs of cooling, with the consensus for headline CPI projected to fall to 2.1%, one of the lowest levels since 2021. As a reminder, the BoC delivered another rate cut at its last meeting, but Governor Macklem stated that there are still upward pressures on inflation that may lead to increases later this year. He also noted the need to prevent the economy from weakening too much and driving inflation lower than it should be. This week’s BoC minutes might offer further clues regarding the pace of future rate cuts and policymakers’ views on easing.

The consensus for U.S. retail sales is -0.2%, down from the prior 1.0%, while core retail sales m/m are expected to come in at 0.2%, compared to the previous 0.4%. Last month’s retail sales data surprised to the upside, with headline retail sales rising by 1.0%.

Wells Fargo analysts noted that July’s retail sales report contrasted with weaker employment data for the same month, highlighting the resilience of consumers despite a softer labor market. They expect this resilience to carry into August, though with some pullback in auto sales. In the last retail sales report, the main driver of the strong increase was a 3.6% monthly rise in motor vehicle and parts sales, the largest component of retail sales.

The only notable data release before the FOMC meeting this week will be the retail sales report. Currently, analysts are split on whether the Fed will implement a 25 bps or 50 bps rate cut at this week’s meeting.

With inflation showing improvements and continuing to decline, along with weakness in the labor market, both factors support a rate cut. However, the latest jobs report did not provide much clarity on how big the first rate adjustment should be.

Articles from WSJ’s Nick Timiraos and the FT late last week suggested that the Fed is still debating internally between a 25 bps and 50 bps reduction, pushing some market participants to lean toward a 50 bps cut, with the risk for this bigger adjustment now at 59%. The market will also closely monitor updates in the September SEP (Summary of Economic Projections) and the dot plot.

At this week’s meeting, the BoE is expected to keep its monetary policy unchanged. After the first rate cut in August, the Bank opted for a cautious approach to further cuts due to services inflation, which remains elevated above 5% y/y.

In terms of the economic outlook, GDP data suggests the economy is on a recovery path. Despite July’s GDP m/m figures being somewhat disappointing, the manufacturing and services PMIs are on a positive trend. The market currently anticipates another 25 bps rate cut from the BoE by the end of the year, likely in November, but if inflation drops more than expected, the Bank could deliver two back-to-back 25 bps cuts, in November and December.

The consensus for the U.S. existing home sales is 3.89M vs prior 3.95M, after a 1.3% increase in July. While mortgage rates have decreased slightly, slow employment gains and income growth are still limiting affordability. Well Fargo analysts don’t see any potential for a housing market recovery, with any improvements from moderating financing costs being outweighed by price appreciation.

For Japan, the consensus among economists is that the BoJ will keep its monetary policy unchanged at 0.25%. Recently, core inflation data surprised to the upside, which might lead the Bank to delay rate hikes. The market now expects the next rate increases to occur in January and April next year.

Before this week’s meeting we will get the Japanese core nationwide CPI y/y which is expected to rise from 2.7% to 2.8%, but this is not expected to influence the BoJ’s decision.

Wish you a profitable trading week.

This article was written by Gina Constantin at www.forexlive.com.

The pair is testing waters last seen back in July last year. The dip below 140.00 today is threatening to firmly take out the low from December last year on the daily chart. And from a psychological perspective, a firm break below 140.00 itself will keep sellers very much in control to start the new week.

But again, with the moves we’re seeing, it all has to be vindicated by the Fed later this week.

Market players are getting quite pushy and are now pricing in ~59% odds of a 50 bps rate cut. That’s quite a leap from the ~21% pricing right after the US CPI report on Tuesday last week. Timiraos’ piece here may have something to do with that. But it’s also best to be reminded that this is a market that has a knack for trying to bully the Fed into a decision.

Going back to USD/JPY, the action there also has a lot to do with the bond market. 10-year Treasury yields are at 3.64%, keeping around its lowest levels since June last year amid the fall since last week. Meanwhile, 2-year Treasury yields are of more interest as it threatens the 2023 low near 3.55% now:

That will keep broader markets on edge as well, with all eyes turning towards the Fed this week.

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

• Eurostoxx -0.2%
• Germany DAX -0.3%
• France CAC 40 -0.2%
• UK FTSE -0.3%
• Spain IBEX -0.1%
• Italy FTSE MIB -0.2%

The start of the session is turning interesting with USD/JPY inching back below the 140.00 mark again. That comes as bond yields are staying pressured and the dollar also softening across the board. US futures are also down slightly now, with S&P 500 futures lower by 0.1% and Nasdaq futures down 0.2%.

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

• Prior 0.0%

Looking at the breakdown, producer prices rose by 0.6% on the month but was offset by a 0.5% drop in import prices.

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

Global Markets:

•  Asian Stock Markets : Nikkei down 0.73%, Shanghai Composite down 0.42%, Hang Seng down 0.18% ASX up 0.25%
• Commodities : Gold at $2615.35 (0.14%), Silver at $31.19 (1.01%), Brent Oil at $71.60 (0.09%), WTI Oil at $67.8 (0.08%)
• Rates : US 10-year yield at 3.645, UK 10-year yield at 3.769, Germany 10-year yield at 2.149

News & Data:

• (CAD) Wholesale Sales  m/m  0.4% vs -1.1% expected
• (CAD) Import Prices m/m – 0.3% vs -0.2% expected

Markets Update:

Asian markets had a mixed opening on Monday. Hong Kong’s Hang Seng index dropped 0.76% following disappointing economic data from China. August factory output, retail sales, and investment figures fell short of expectations, with the urban jobless rate reaching a six-month high and home prices declining at the fastest rate in nine years. Investors are also looking ahead to the U.S. Federal Reserve’s policy meeting this week, where an interest rate cut is anticipated.

Meanwhile, Australia’s S&P/ASX 200 gained 0.25%, and Taiwan’s Weighted Index edged up slightly. Markets in mainland China and South Korea remained closed for the Mid-Autumn Festival, while Japan was closed for Respect for the Aged Day.

Typhoon Bebinca has caused hundreds of flight cancellations in China, and Shanghai is expected to experience its strongest storm since 1949. Asian investors are awaiting key economic data and central bank decisions from the region. Japan’s inflation is expected to rise in August, potentially prompting the Bank of Japan to maintain its hawkish stance.

The Japanese yen strengthened to 140.49 against the U.S. dollar, potentially marking its strongest level in over a year. China is set to announce its one- and five-year loan prime rates on Friday, currently at 3.35% and 3.85%, respectively.

In the U.S., after a challenging start to September, the major indexes ended last week positively. The S&P 500 rose 0.54% to 5,626.02, the Nasdaq Composite added 0.65% to 17,683.98, and the Dow Jones Industrial Average jumped 0.72% to 41,393.78.

Upcoming Events: 

• 12:30 PM GMT – CAD Manufacturing Sales m/m

The post Monday 16th September 2024: Asian Markets Mixed Amid China Data Worries and Central Bank Decisions first appeared on IC Markets | Official Blog.