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The chance for a 50 basis point cut next week by the Fed is now up to 50-50 in volatile trading this morning.

At this time yesterday the chance of a 50 basis point cut was only about 20 – 25%. Then comments from Wall Street Journal’s Nick Timiraos where he talked about the dilemma the Federal Reserve faces in either going big or going low ignited some speculation that he may have gotten a nudge from the Fed.

Overnight former New York Fed Pres. Dudley that thought a 50 basis points is a possibility as well.

This article was written by Greg Michalowski at www.forexlive.com.

The major US stock indices are opening with modest changes. Coming into the day the S&P and NASDAQ indices are working on a four day winning streak trying to extend that to five for five this week. It is Friday the 13th. Can the markets rise above that jinx?

A snapshot of the market currently shows:

• Dow industrial average is trading up 161.44 points or 0.40% at 41253.47
• S&P index is trading up 14.30 points or 0.26% at 5610.55.
• NASDAQ index is trading up 33 points or 0.199% at 17605.80

The small-cap Russell 2000 is trading up 29.05 points or 1.36% at 2158.45.

Looking at the US debt market, yields are lower with the year leading the way. The 2-10 year and is now around positive by about eight basis points:

• 2-year yield 3.578%, -7.0 basis points
• 5- year yield 3.431%, -3.6 basis points
• 10- year yield 3.657%, -2.3 basis points
• 30- year yield 3.987%, -0.9 basis points

Looking at other markets:

• Crude oil is trading up $0.48 and $69.46. For the trading week, the price is still up 2.10%
• Gold ready to a new record high yesterday and is continuing that trend today. The price is up $21.31 or 0.83% at $2580
• Silver is up another $0.83 or 2.8% at $30.68
• Bitcoin is down around $300 and $57,824.

This article was written by Greg Michalowski at www.forexlive.com.

Both the S&P index in the NASDAQ index have been higher on each of the trading days this week. That comes after the NASDAQ index fell by -5.77% last week, and the S&P index fell by -4.25% as well.

This week with a 1-day to go:

• S&P index is up 3.46%
• NASDAQ index is up 5.27%

The Dow industrial average is up 1.86% this week after falling -2.93% last week.

The futures this morning are implying a mixed opening

• Dow industrial average up 94 points
• S&P index up 10.01 points
• NASDAQ index is trading down -18 points

This article was written by Greg Michalowski at www.forexlive.com.

• Prior quarter: 78.5% revised to 78.6%

Details:

• Canadian industries operated at 79.1% capacity in Q2 2024.
• This is a slight increase from 78.6% in Q1 2024.
• The Q1 2024 capacity utilization was revised up by 0.1 percentage point.

This article was written by Greg Michalowski at www.forexlive.com.

• Prior month -0.6%

Details of wholesale sales which rose 0.4% versus -1.1% expected:

• Wholesale sales (excluding petroleum, petroleum products, other hydrocarbons, oilseed, and grain) grew by 0.4% to $82.7 billion in July.
• Sales increased in four of the seven subsectors.
• Growth was led by the agriculture supplies industry group (miscellaneous subsector) and the food, beverage, and tobacco subsector.
• Wholesale sales were 1.1% higher in July compared to the same month one year earlier.
• In volume terms, wholesale sales increased by 0.5% in July

inventories rise by 0.5% versus -0.1% in June:

• Wholesale inventories rose by 0.5% to $127.5 billion in July, following a 0.1% decline in June.
• Increases were recorded in four of the seven subsectors.
• The machinery, equipment, and supplies subsector led the growth, up 1.0% to $39.4 billion, 3.9% higher than a year earlier.
• The motor vehicle and motor vehicle parts and accessories subsector saw a 2.0% increase to $17.3 billion.
• Inventory declines were noted in the personal subsector (-0.8% to $20.1 billion) and the building material and supplies subsector (-0.5% to $22.0 billion).
• The inventory-to-sales ratio remained unchanged at 1.54 in July, indicating the time required to deplete inventories if sales stay constant.

This article was written by Greg Michalowski at www.forexlive.com.

• Import prices prior month: +0.1%
• Export price prior month: was 0.7% revised to us 0.5%
• Import prices MoM -0.3% % vs -0.2% estimate
• Export prices MoM -0.7% vs -0.1% estimate
• Import prices YoY 0.8% vs 1.6% last month
• Export prices YoY -0.7% vs 1.4% last month

This article was written by Greg Michalowski at www.forexlive.com.

On the economic calendar today:

• Canada Capacity Utilization Rate for Q2: Forecast: 78.5%, Previous: 78.5
• Canada Wholesale Sales m/m: Forecast: -1.1%, Previous -0.6%,
• US Import Prices m/m: Forecast: -0.2%, Previous: +0.1. US export prices MoM Forecast -0.1%. Previous +0.7%
• US Prelim UoM Consumer Sentiment: Forecast: 68.5, Previous: 67.9. Current conditions Forecast 61.5, Previous 61.3. Expectations. Forecast 71.0. Previous 72.1
• US Prelim UoM Inflation Expectations: Previous: 2.8% 5 year inflaiton expectations: Previous 3.0%.

This article was written by Greg Michalowski at www.forexlive.com.

• Prior +6.3%
• New yuan loans ¥900 billion
• Prior ¥260 billion

China’s bank lending tumbled in July to its lowest in almost 15 years but it seen rebounding back a little in August, though estimates were expecting it to climb back up to around ¥1.0 trillion. Looking at the year-to-date figure, China’s new yuan loans is totaling up ¥14.43 trillion so far. Overall, I would argue that it still points to credit demand still being rather lackluster and the PBOC possibly has to do more as such to drive a resurgence in that area i.e. more rate cuts.

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

Headlines:

• USD/JPY stays pressured as lower yields weigh
• ECB’s Muller: Temporary acceleration in inflation is likely
• ECB’s Holzmann: There could be room for another rate cut in December
• ECB’s Villeroy: We should continue to reduce gradually and as appropriate
• ECB’s Rehn says will continue to base policy decisions on assessment of inflation outlook
• ECB’s Vasle: We are not committed to any predetermined rate path
• ECB’s Nagel: Core inflation is going in the right direction
• US reportedly finalises steep tariffs on China, with many to begin on 27 September
• China approves the plan to raise the retirement age for the first time since 1978
• Boeing US factory workers vote to go on strike, reject pay deal
• France August final CPI +1.8% vs +1.9% y/y prelim
• Eurozone July industrial production -0.3% vs -0.5% m/m expected

Markes:

• JPY leads, AUD lags on the day
• European equities higher; S&P 500 futures up 0.2%
• US 10-year yields down 3.4 bps to 3.645%
• Gold up 0.4% to $2,567.88
• WTI crude up 1.1% to $69.75
• Bitcoin up 0.1% to $58,225

There weren’t any major headlines on the session but there were some decent market moves to be had. In particular, bond yields are staying pressured and that is weighing on USD/JPY again.

10-year yields in the US fell as low as 3.62% and that pulled USD/JPY to a low of 140.36 during the session. Yields are now at 3.64% but still down by over 3 bps, helping to see USD/JPY nudge back a little to 140.70 – still down 0.8% on the day though.

All of this comes after the action from yesterday, as traders step up bets for a 50 bps rate cut by the Fed for next week. In part, that can be attributed to Fed watcher Tsimiraos tossing said idea into the mix.

Looking at the dollar, it is holding more mixed on the session as it trades lower against the Swiss franc and euro but higher against the aussie and kiwi.

ECB policymakers did come out in droves to speak their views after the decision yesterday, but all were mainly echoing what Lagarde already mentioned.

In other markets, equities continue to put on a more positive front with US futures also sitting a little higher again on the day. As for gold, the run higher continues with the precious metal keeping with the technical breakout to fresh record highs yesterday. It is now trading up by another 0.4% to $2,567.

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

This will include steep tariff hikes on Chinese EVs, solar cells, semiconductors, and steel among other strategic goods. More specifically, it will be a 100% duty on Chinese EVs, 50% on solar cells, and 25% on steel, aluminum and key minerals. All of which will be going into effect on 27 September.

As for a 50% duty on Chinese semiconductors, that will be due to start in 2025.

Besides that, there will also be increases in tariffs on Chinese medical face masks and surgical gloves to 50% next year and then to 100% in 2026. That compares with the initial plan for an immediate 25% tariff. But the ones mentioned above are the heavy hitters.

Well, it looks like this is Biden’s parting gift before he steps down. And the ball is now over to China’s court is seeing how they will respond before potentially dealing with more of this if Trump does get elected come November.

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

• Prior -0.1%; revised to 0.0%

The drop here fits with the continued softness in the euro area industrial sector, led by the struggles in Germany especially. Looking at the breakdown, intermediate goods dropped by 1.3%, capital goods by 1.6%, durable consumer goods by 2.8%. That was slightly offset by an increase in energy by 0.3% and non-durable consumer goods by 1.8%.

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

The post Ex Dividend 16/09/2024 first appeared on IC Markets | Official Blog.