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The euro is sitting higher on the day, with EUR/USD seen up 0.3% to clip the 1.1200 mark. Even EUR/CHF is also driven higher, up 0.6%T to 0.9445 currently. But circling back to EUR/USD, the pair is once again testing key daily resistance at the figure level as buyers are hoping for a breakthrough this time.

Traders might be looking for an ECB rate cut next month but that isn’t stopping the upside momentum in the pair, since bouncing off the 1.1000 level earlier this month.

For now, the 1.1200 level is still offering key resistance for the pair. That before the July 2023 high at 1.1275 potentially comes into play next.

The tricky part about reading into price action today is that it is comin amid month-end and quarter-end trading. I’d be more comfortable any any technical breaks if it did not coincide with this period, which tends to include some form of shenanigans every now and then.

The dollar itself is trading more mixed on the day. It is higher against the yen and franc but lower against the euro, pound, and antipodeans. That’s not really making for much clarity in the price action today.

In other markets, US futures are still flattish while European indices are down. There isn’t much of a cheer in broader equities despite Chinese indices rallying hard once again to close the day over 8% higher. In the bond market, yields are higher across the board and that is keeping a more mixed mood so far in European morning trade.

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

• Prior +1.1%
• HICP +0.8% vs +1.0% y/y expected
• Prior +1.2%

Slight delay in the release by the source. This matches up with the softer headline figures from France and Spain last week. Then again, Italian headline inflation has been on the lower side for a while now. Nonetheless, it still reaffirms the latest calls for the ECB to cut rates in October.

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

• Prior 61.99k; revised to 62.50k
• Net consumer credit £1.3 billion vs £1.4 billion expected
• Prior £1.2 billion

Mortgage approvals rose in August, moving up to its highest level since August 2022 – largely driven by a surge in purchase activity. On net, individuals borrowed £2.9 billion of mortgage debt in August, compared to £2.8 billion in July.

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

On Monday, the U.K. will release its final GDP q/q data, while Switzerland will publish the KOF economic barometer. In the U.S., Fed Chair Jerome Powell will participate in a discussion titled “A View from the Federal Reserve Board” at the National Association for Business Economics Annual Meeting in Nashville. Although audience questions are expected, this event is unlikely to create significant market volatility. In Canada, Monday will be a bank holiday in observance of the National Day for Truth and Reconciliation.

On Tuesday, Japan will release its unemployment rate, along with the BoJ summary of opinions and the Tankan manufacturing index. Australia will report its retail sales m/m, and for the eurozone, the CPI data will be published. In the U.S., key releases include the ISM manufacturing PMI, JOLTS job openings and ISM manufacturing prices.

Wednesday brings the OPEC-JMMC meetings, and in the U.S., the ADP non-farm employment change will be released.

On Thursday, Switzerland will publish its inflation data, while the U.S. will release its unemployment claims figures and the ISM services PMI.

Friday’s highlight in the U.S. will be the release of key labor market data, including average hourly earnings m/m, non-farm employment change and the unemployment rate.

Throughout the week, several FOMC members are expected to deliver remarks.

The consensus for the eurozone headline CPI y/y is 1.9% and for the core CPI it’s 2.8%. However, the services inflation, which is expected at 4.1%, continues to pose a challenge for the ECB.

This week’s CPI data will be important for the Bank’s monetary policy decision next month. The ECB delivered a 25 bps rate cut in September, and it is likely to cut rates again in October. Analysts suggest that, due to weaker-than-expected PMI data, the Bank might opt for a larger cut in the future, but first wants to ensure there are no lingering inflationary pressures. If this week’s inflation data comes in line with or slightly below expectations, it is expected that the ECB will proceed with another 25 bps rate cut next month.

In the U.S., the consensus for the ISM manufacturing PMI is 47.6, up from the previous 47.2, though it remains in contractionary territory.

The outlook is not very promising, as both manufacturing and services indices are now on a downtrend, with the manufacturing PMI having been in contraction for 21 months. This suggests that economic activity is moderating as Q3 comes to a close.

In Switzerland, the consensus for the CPI m/m is -0.1% vs 0.0% prior. At last week’s meeting, the SNB delivered a 25 bps rate cut to 1.00% citing decreasing inflationary pressure as a key factor behind the recent strengthening of the CHF.

The Bank also lowered its inflation forecast, indicating that it expects inflation to remain within its price stability range over the entire forecast horizon. Additionally, they mentioned that future rate cuts are possible over the next quarters to ensure medium-term price stability.

The consensus for the U.S. ISM Services PMI is 51.6 up from the previous 51.5. There has also been a slight improvement in the headline index for August, but it’s unclear how long this will last, as the sector is under pressure due to high interest rates that negatively impact sales.

While the Fed has begun cutting rates, analysts from Wells Fargo believe companies will hold back from making significant capital investments or hiring until they see the results of the November presidential election.

In the U.S., the consensus for average hourly earnings m/m is an increase of 0.3% vs the previous 0.4%. Non-farm employment is expected to rise to 144K from 142K, while the unemployment rate is likely to remain unchanged at 4.2%.

The Fed is closely monitoring the unemployment rate and even though it recently delivered its first 50 bps rate cut, some time is needed for the effects to materialize. Analysts from ING suggest that if the unemployment rate rises to 4.3% and payroll growth comes in below 75K, the odds of another 50 bps rate cut will increase.

It is evident that the job market is cooling, and the Fed is concerned about a potential further deterioration, which is why they may respond aggressively if needed. Wells Fargo analysts expect the pace of hiring to continue to slow down in the months ahead.

Wish you a profitable trading week.

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

• Brandenburg CPI +1.4% vs +1.7% y/y prior
• North Rhine Westphalia CPI +1.5% vs +1.7% y/y prior
• Saxony CPI +2.4% vs +2.6% y/y prior
• Baden Wuerttemberg CPI +1.4% vs +1.5% y/y prior

The state figures point to softer yearly figures compared to the month before. Based on the estimates, we should see the German national number come in later at around 1.7%. That will be down from the previous headline annual inflation figure of 1.9% in August.

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

• Domestic sight deposits CHF 463.6 bn vs CHF 457.2 bn prior

Swiss sight deposits jumped in the past week, with the total levels rising back up to its highest since early May. That might be indicative of the SNB stepping in a little to intervene with the franc’s strength in the past week.

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

• Eurostoxx -0.3%
• Germany DAX -0.2%
• France CAC 40 -0.5%
• UK FTSE -0.1%
• Spain IBEX -0.1%
• Italy FTSE MIB -0.7%

This comes with US futures showing a more muted tone today, keeping flattish at the moment. It’s been another good month for European indices, having clawed their way back after the early August blip. But with month-end and quarter-end in focus today, that could muddy up the flows a little before we reset tomorrow.

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

• Prior 101.6; revised to 105.0

It’s a modest bump higher after the revision to the August reading. It indicates some optimism to the Swiss economic outlook but nothing too major when you look at the trend as a whole.

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

The post Ex-Dividend 01/10/2024 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei down 4.87%, Shanghai Composite up 8.54%, Hang Seng up 3.85% ASX up 0.70%
• Commodities : Gold at $2679.35 (0.34%), Silver at $31.90 (0.24%), Brent Oil at $72.81 (1.56%), WTI Oil at $69.16 (1.47%)
• Rates : US 10-year yield at 3.762, UK 10-year yield at 3.980, Germany 10-year yield at 2.140

News & Data:

• (USD) Core PCE Price Index m/m  0.1% vs 0.2% expected
• (CAD) GDP m/m  0.2% vs 0.1% expected

Markets Update:

Stocks in mainland China surged over 8%, while Japan’s Nikkei 225 fell 4.64% on Monday as investors digested key economic data from both countries. China’s official purchasing managers’ index (PMI) for September came in at 49.8, slightly above the forecast of 49.5, but still signaled a fifth consecutive month of contraction in the manufacturing sector. The Caixin PMI, a private survey by S&P Global, showed a sharper drop, falling to 49.3 from 50.4 in August, missing expectations of 50.5. This marked the steepest decline in 14 months.

Mainland China’s CSI 300 index jumped 6.22%, with the property sector gaining 7.4%. Hong Kong’s Hang Seng index rose 3.34%, driven by consumer stocks, while the Hang Seng Mainland Properties Index soared 8%. Despite the positive performance in Chinese markets, the data still pointed to challenges in the manufacturing sector.

In Japan, the Nikkei’s steep decline was led by real estate stocks. The biggest loser was Isetan Mitsukoshi Holdings, which plunged 11%. Japan’s industrial production dropped 4.9% year-on-year in August, a much larger decline than expected, though retail sales grew by 2.8%, beating estimates of a 2.3% increase. The yen weakened 0.13% against the dollar, trading at 142.38.

Elsewhere, Australia’s S&P/ASX 200 rose 0.72%, reaching a new high, while South Korea’s Kospi fell 1.13%. In the U.S., the Dow Jones Industrial Average gained 0.33% on Friday, driven by optimistic inflation data. The personal consumption expenditures (PCE) price index, a key inflation gauge, rose 0.1% in August, aligning with expectations and showing an annualized increase of 2.2%.

Upcoming Events: 

• 01:45 PM GMT – USD Chicago PMI
• 05:55 PM GMT – USD Fed Chair Powell Speaks

The post Monday 30th September 2024: Stocks Surge in China While Japan’s Markets Tumble Amid Key Economic Data first appeared on IC Markets | Official Blog.

• Prior -0.2%

In annual terms, house prices grew by 3.2% year-on-year and that’s the fastest growth in two years. The average price of a typical dwelling in the UK is at £266,094 as of the month. Nationwide notes that:

“Income growth has continued to outstrip house price growth in recent months while borrowing costs have edged lower amid expectations that the Bank of England will continue to lower interest rates in the coming quarters. These trends have helped to improve affordability for prospective buyers and underpinned a modest increase in activity and house prices, though both remain subdued by historic standards.”

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

• Prior -0.4%

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