• Prior +0.7%
• GDP +0.7% vs +0.9% y/y prelim
• Prior +0.3%

It’s a slight revision lower with the quarterly breakdown as per the following compared to the preliminary estimate:

• Household consumption +0.11% (previously +0.12%)
• Government consumption +0.23% (previously +0.30%)
• Gross fixed capital formation +0.10% (previously +0.08%)
• Gross capital formation: other +2.25% (previously +2.30%)
• Net trade -2.20% (unchanged)

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

IC Markets Europe Fundamental Forecast | 30 September 2024

What happened in the Asia session?

China released its official National Bureau of Statistics (NBS) PMI reports for the manufacturing and services sector this morning which had mixed results for September. Although the manufacturing sector contracted for the fifth month in a row with a reading of 49.8, it came in higher than the estimate of 49.4 as well as registering the highest reading in five months. Meanwhile, services activity expanded with a borderline reading of 50.0 which was lower than the previous month’s figure of 50.3 and also lower than market forecasts of 50.4. In addition, the latest print pointed to the lowest level since December 2022 as sub-indices such as new orders, new export orders and employment all declined at a steeper rate.

These PMI numbers could negatively impact commodity prices in the near-term, especially for crude oil, despite last week’s announcement of a massive economic stimulus package. WTI oil dipped under $68.50 per barrel following this news release but it stabilized around $68.10 before retracing higher by midday Asia.

What does it mean for the Europe & US sessions?

GDP output is expected to expand at an annualised rate of 0.6% in the second quarter of this year. Economic output has been steady in the U.K. as evident by robust PMI activity over the past nine months and the latest GDP print will likely keep Cable buoyed as the new trading week gets underway.

ECB President Christine Lagarde will be speaking about monetary policy at the European Parliament in Brussels later today where her remarks could inject higher volatility for the Euro. This currency pair was trading around 1.1168 as markets re-opened this morning and it should remain elevated as the day progresses.

The Dollar Index (DXY)

Key news events today

Fed Chair Powell Speaks (5:00 pm GMT)

What can we expect from DXY today?

Federal Reserve Chairman Jerome Powell will be participating in a moderated discussion titled “A View from the Federal Reserve Board” at the National Association for Business Economics Annual Meeting in Nashville where audience questions are expected. Powell could shed further light on the outlook for future monetary policy action by this central bank and traders should brace themselves for higher volatility for the dollar during this event.

Central Bank Notes:

• The Federal Funds Rate target range was reduced by 50 basis points to 4.75% to 5.00% on 18th September in an 11 to 1 vote with Governor Michelle Bowman dissenting, preferring to cut rates by a smaller amount.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and has gained greater confidence that inflation is moving sustainably toward 2%, and judges that the risks to achieving its employment and inflation goals are roughly in 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 slowed, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• 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 6 to 7 November 2024.

Next 24 Hours Bias

Medium Bearish

Gold (XAU)

Key news events today

Fed Chair Powell Speaks (5:00 pm GMT)

What can we expect from Gold today?

Federal Reserve Chairman Jerome Powell will be participating in a moderated discussion titled “A View from the Federal Reserve Board” at the National Association for Business Economics Annual Meeting in Nashville where audience questions are expected. Powell could shed further light on the outlook for future monetary policy action by this central bank and traders should brace themselves for higher volatility for gold prices during this event.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie rose for the third consecutive week as it climbed just over 1.4% to close at 0.6902 last Friday, gaining 100 pips in the process. This currency pair rose strongly at the open towards 0.6930 as Asian markets came online – these are the support and resistance levels for today.

Support: 0.6795

Resistance: 0.7000

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 24th September, marking the seventh 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 is still some way above the midpoint of the 2 to 3% target range.
• The trimmed-mean CPI was 3.9% YoY in the June quarter, broadly as forecast in the May Statement on Monetary Policy (SMP) while headline inflation declined in July as measured by the monthly CPI indicator.
• Headline inflation is expected to fall further temporarily but current forecasts do not see inflation returning sustainably to target until 2026.
• GDP data for the June quarter have confirmed that growth has been weak but growth in aggregate consumer demand, which includes spending by temporary residents such as students and tourists, remained more resilient.
• Broader indicators suggest that labour market conditions remain tight, despite some signs of gradual easing while wage pressures have eased somewhat.
• Data since then have reinforced the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out while agreeing that policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range.
• The Board will continue to rely upon the data and the evolving assessment of risks to guide its decisions and will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.
• Next meeting is on 5 November 2024.

Next 24 Hours Bias

Medium Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi rose nearly 1.7% to mark its second consecutive week of appreciation versus the greenback as it gained just over 100 pips to close at 0.6340 on Friday. 

This currency pair climbed strongly at the open tor surge past 0.6350 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.6255

Resistance: 0.6410

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

Medium Bullish

The Japanese Yen (JPY)

Key news events today

Retail Sales (11:50 pm GMT 29th September)

What can we expect from JPY today?

Retail sales grew 2.8% YoY in August surpassing market estimates of 2.6% as categories such as textile, clothing, and personal goods; miscellaneous; and sales of machinery & equipment saw robust sales growth. Rising wages in Japan continue to support consumer spending as retail turnover marked the 29th consecutive month of increase. Consistently higher consumer spending could put upward pressures on prices and may nudge the Bank of Japan (BoJ) to move closer to another rate hike this year. Such a move would most certainly strengthen the yen and potentially cause USD/JPY to slide lower – this currency pair was trading around 142.60 at the beginning of this session.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25%
  2. The Bank will embark 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 consumer price index (CPI, all items less fresh food) has been in the range of 2.5 to 3.0% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a passthrough to consumer prices of cost increases led by the past rise in import prices have waned.
• 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 of the July 2024 Outlook for Economic Activity and Prices, it is likely to be at a level that is generally consistent with the price stability target.
• Japan’s economy has recovered moderately, although some weakness has been seen in part, but it 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 31 October 2024.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

ECB President Lagarde Speaks (1:00 pm GMT)

What can we expect from EUR today?

ECB President Christine Lagarde will be speaking about monetary policy at the European Parliament in Brussels later today where her remarks could inject higher volatility for the Euro. This currency pair was trading around 1.1168 as markets re-opened this morning and it should remain elevated as the day progresses.

Central Bank Notes:

• The Governing Council today decided to reduce the three key ECB interest rates on 12th September, after holding rates steady in July.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 3.65%, 3.90% and 3.50% respectively.
• Recent inflation data have come in broadly as expected, and the latest ECB staff projections see headline inflation averaging 2.5% in 2024, 2.2% in 2025 and 1.9% in 2026.
• For core inflation, the projections for 2024 and 2025 have been revised up slightly, as services inflation has been higher than expected. At the same time, staff continue to expect a rapid decline in core inflation, from 2.9% this year to 2.3% in 2025 and 2.0% in 2026.
• ECB staff projections forecast that the economy will grow by 0.8% in 2024, rising to 1.3% in 2025 and 1.5% in 2026 which is a slight downward revision compared with the June projections, mainly owing to a weaker contribution from domestic demand over the next few quarters.
• 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 17 October 2024.

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Despite last week’s third successive rate cut by the Swiss National Bank (SNB), the franc surprisingly strengthened causing USD/CHF to shed over 1.1%, losing almost 100 pips in the process. Overhead pressures remain for this currency pair as it hovered above 0.8400 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8400

Resistance: 0.8520

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the third consecutive meeting, going from 1.25% to 1.00% in September.
• Inflationary pressure has again decreased significantly compared to the previous quarter, reflecting the appreciation of the Swiss franc over the last three months.
• Inflation in the period since the last monetary policy assessment was lower than expected, standing at 1.1% in August compared to 1.4% in May.
• The new conditional inflation forecast is significantly lower than that of June: 1.2% for 2024, 0.6% for 2025 and 0.7% for 2026, based on the assumption that the SNB policy rate is 1.0% over the entire forecast horizon.
• Swiss GDP growth was solid in the second quarter of 2024 as momentum in the chemicals/pharmaceuticals industry was particularly strong.
• However, growth is likely to remain rather modest in the coming quarters due to the recent appreciation of the Swiss franc and the moderate development of the global economy.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term.
• Next meeting is on 12 December 2024.

Next 24 Hours Bias

Weak Bearish

The Pound (GBP)

Key news events today

GDP (6:00 am GMT)

What can we expect from GBP today?

GDP output is expected to expand at an annualised rate of 0.6% in the second quarter of this year. Economic output has been steady in the U.K. as evident by robust PMI activity over the past nine months and the latest GDP print will likely keep Cable buoyed as the new trading week gets underway.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to maintain Bank Rate at 5.0% while one member preferred to reduce Bank Rate by 25 basis points to 4.75%, on19th September 2024.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes, and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B.
• Twelve-month CPI inflation had been 2.2% in August and July, slightly lower than August Report expectations. Consumer core goods and food price inflation had remained subdued as the cost pressures from previous global shocks had unwound further, and producer price levels had been broadly flat while energy prices had continued to drag on CPI inflation.
• Services price inflation had increased to 5.6% in August compared to 5.2% in July and 5.7% in June. This was slightly lower in August than had been expected at the time of the August Report. There had been volatility in a number of services sub-components in the July and August outturns, including accommodation and catering prices and airfares.
• GDP had increased by 0.6% in 2024 Q2, 0.1 percentage points lower than had been expected in the August Monetary Policy Report. That had followed 0.7% growth in Q1, but Bank staff judged that the underlying pace of growth had been somewhat weaker during the first half of the year. 
• Headline GDP growth was expected to return to its underlying pace of around 0.3% per quarter in the second half of the year. Based on a broad set of indicators, the MPC judged that the labour market continued to loosen but that it remained tight by historical standards.
• Monetary policy decisions have been guided by the need to squeeze persistent inflationary pressures out of the system so as to return CPI inflation to the 2% target both in a timely manner and on a lasting basis; policy has been acting to ensure that inflation expectations remain well anchored.
• In the absence of material developments, a gradual approach to removing policy restraint remains appropriate while 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 7 November 2024.

Next 24 Hours Bias

Medium Bullish

The Canadian Dollar (CAD)

Key news events today

National Day for Truth and Reconciliation (Bank Holiday)

What can we expect from CAD today?

Canadian banks will be closed in observance of the National Day for Truth and Reconciliation today and trading volume is likely to be significantly lower in the domestic markets as only forex brokers will remain open. The Loonie weakened last week to lift USD/CAD above 1.3500 last Friday – this currency pair was trading around 1.3510 as Asian markets came online.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points for the third consecutive meeting to 4.25% while continuing its policy of balance sheet normalization on 4th September.
• Canada’s economy grew 2.1% in the second quarter of 2024, led by government spending and business investment.
• This second quarter GDP growth was slightly stronger than forecast in July, but preliminary indicators suggest that economic activity was soft through June and July.
• As expected, inflation slowed further to 2.5% in July. The Bank’s preferred measures of core inflation averaged around 2.5% and the share of components of the consumer price index growing above 3% is roughly at its historical norm.
• High shelter price inflation is still the biggest contributor to total inflation but is starting to slow while inflation also remains elevated in some other services.
• The labour market continues to slow, with little change in employment in recent months. Wage growth, however, remains elevated relative to productivity.
• The Governing Council is carefully assessing these opposing forces on inflation and monetary policy decisions will be guided by incoming information and our assessment of their implications for the inflation outlook.
• The Bank remains resolute in its commitment to restoring price stability for Canadians.
• Next meeting is on 23 October 2024.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

China NBS Manufacturing PMI (1:30 am GMT)

China NBS Services PMI (1:30 am GMT)

What can we expect from Oil today?

China released its official National Bureau of Statistics (NBS) PMI reports for the manufacturing and services sector this morning which had mixed results for September. Although the manufacturing sector contracted for the fifth month in a row with a reading of 49.8, it came in higher than the estimate of 49.4 as well as registering the highest reading in five months. Meanwhile, services activity expanded with a borderline reading of 50.0 which was lower than the previous month’s figure of 50.3 and also lower than market forecasts of 50.4. In addition, the latest print pointed to the lowest level since December 2022 as sub-indices such as new orders, new export orders and employment all declined at a steeper rate.

These PMI numbers could negatively impact commodity prices in the near-term, especially for crude oil, despite last week’s announcement of a massive economic stimulus package. WTI oil dipped under $68.50 per barrel following this news release but it stabilized around $68.10 before retracing higher by midday Asia.

Next 24 Hours Bias

Weak Bearish

The post IC Markets Europe Fundamental Forecast | 30 September 2024 first appeared on IC Markets | Official Blog.

This just confirms the date as previously reported from quite a number of media outlets earlier in Asia trading. Ishiba will be sworn in as prime minister tomorrow and is expected to revamp the Cabinet positions ahead of the snap election. Yoshimasa Hayashi is expected to stay on as chief Cabinet secretary while Katsunobu Kato is expected to be appointed finance minister.

Sanae Takaichi, who went head-to-head with Ishiba at the run-off last week, is reportedly excluded from the picks so far. That might be a slight issue for Ishiba in shoring up unanimous support behind his leadership moving forward. But for now, the goal for Ishiba will be to just avoid any controversy and play things safe.

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

Wake me up when September.. oh, it’s already ending. The month has certainly flew by. So far today, the dollar is keeping steadier for the most part. The yen remains volatile with USD/JPY up earlier in Asia to 142.95 but is now near unchanged levels on the day. Instead, it is the antipodeans which are leading the charge as they remain buoyed by more positive sentiment from China.

AUD/USD is trading up to its highest levels since February last year, closing in on its 200-week moving average at 0.6959 next.

This comes as Chinese markets are staying buoyed ahead of the holiday break, with the CSI 300 index clipping 7% gains on the day now. Fire.

Month-end and quarter-end trading is a focus point for the day ahead. That could see some late flows muddying price action, particularly when we get to the London fix later. So, that will be something to watch out for.

Looking to the session ahead though, we will have a host of data releases to move things along at least. The highlight will be German and Italian inflation data. However, with traders pricing in ~93% odds of an ECB rate cut next month already, it’s hard to imagine too much of an impact unless there is big surprises in the data.

0600 GMT – Germany August import price index0600 GMT – UK Q2 final GDP figures0600 GMT – UK September Nationwide house prices0700 GMT – Switzerland September KOF leading indicator index0800 GMT – SNB total sight deposits w.e. 27 September0830 GMT – UK August mortgage approvals, credit data0900 GMT – Italy September preliminary CPI figures1200 GMT – Germany September preliminary CPI figures

The German state figures are to come in around 0800 GMT as well. So, keep an eye out for that ahead of the national release later.

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.

🔥 Chinese stocks are sizzling and it has been a while since we’ve seen such an upturn in sentiment in the region. After the over 15% gains last week, the CSI 300 index is up over 6% now at the lunch break. As seen with the chart above, the run higher already broke the downtrend since 2022 but it has also run back above its 100-week moving average (red line) now.

From last week: Is this the real turning point for Chinese equities?

The mood music at the moment is extremely positive but do be mindful that all of this is coming ahead of the National Day celebrations. That will see Chinese markets observe a one week break, starting from tomorrow. Domestic markets will only resume trading again on 8 October.

I reckon the real test and measure of the appetite we’re seeing now will come after the break period.

For now, Beijing has done well in rallying support and shoring up sentiment ahead of one of the patriotic times of the year. It’s a good showing to get people buzzing again as they visit their hometowns and families. But this is just the starting point really. They need to build on this and keep the momentum going to raise the economy back up from the dead.

The collapse in domestic demand has been a major issue for lawmakers and policymakers in the aftermath of the Covid pandemic. Now is perhaps their best opportunity to really get things on track again. However, the fiscal side of things really needs to play ball. So, we’ll see how Beijing follows up on that in the weeks ahead.

It’s all smiles in the past week for Chinese stocks. But let’s see if it can stay that way or if this ends up being yet another false dawn. The former is certainly an attractive proposition if it plays out. That considering Chinese valuations are still low, even accounting for the jump over the past week. It at least makes for another potential opportunity to chase in markets for the year and going into the next.

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

DXY (US Dollar Index):

Potential Direction: Bearish
Overall momentum of the chart: Bearish
Factors contributing to the momentum: Price is below the bearish Ichimoku cloud.

Price could potentially make a: Bearish continuation towards 1st support.

Pivot: 101.02
Supporting reasons: An overlap resistance, suggesting this level could act as a significant resistance point.

1st support: 99.59
Supporting reasons: Swing low support and 161.80% Fibonacci Extension, indicating this level may provide strong support if the price declines further.

1st resistance: 101.94
Supporting reasons: An overlap resistance, marking a level where the price may face selling pressure if it attempts to rise.

EUR/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bullish
Factors contributing to the momentum: Price is in a bullish ascending channel.

Price could potentially make a: Bullish bounce off pivot and head toward 1st resistance.

Pivot: 1.1110
Supporting reasons: An overlap support and 23.60% Fibonacci Retracement, suggesting this level could act as a strong support point.

1st support: 1.0948
Supporting reasons: An overlap support and 50% Fibonacci Retracement, indicating this level may provide additional support if the price declines.

1st resistance: 1.1277
Supporting reasons: Swing high resistance and 127.20% Fibonacci Extension, marking a significant resistance level where the price could face upward pressure.

EUR/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a: Bullish bounce off pivot and head towards 1st resistance.

Pivot: 158.08
Supporting reasons: Pullback support, indicating this level may act as a significant support point.

1st support: 154.53
Supporting reasons: Multi-swing low support, suggesting this level could provide additional support if the price declines.

1st resistance: 164.00
Supporting reasons: Pullback resistance with 50% Fibonacci Projection and 127.20% Fibonacci Extension, indicating a strong level of resistance due to Fibonacci confluence.

EUR/GBP:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a: Bearish reaction off pivot and drop to 1st support.

Pivot: 0.8385
Supporting reasons: Pullback resistance and 23.60% Fibonacci Retracement, suggesting this level could act as a significant resistance point.

1st support: 0.8321
Supporting reasons: Multi-swing low support, indicating this level may provide a strong point of support if the price declines.

1st resistance: 0.8488
Supporting reasons: Pullback resistance, marking a level where the price might face selling pressure if it attempts to rise.

GBP/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a: Bearish continuation towards 1st support.

Pivot: 1.3430
Supporting reasons: Multi-swing high resistance and 161.80% Fibonacci Extension, indicating this level could act as a strong resistance point.

1st support: 1.3266
Supporting reasons: An overlap support, suggesting this level may provide significant support if the price declines.

1st resistance: 1.3614
Supporting reasons: An overlap resistance and 100% Fibonacci Projection, marking a level where the price might face resistance if it attempts to rise.

GBP/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a: Bullish bounce off pivot and head towards 1st resistance.

Pivot: 188.29
Supporting reasons: Pullback support, indicating this level may act as a significant support point for the price.

1st support: 182.96
Supporting reasons: Multi-swing low support, suggesting this level could provide additional support if the price moves lower.

1st resistance: 197.78
Supporting reasons: Pullback resistance and 61.80% Fibonacci Retracement, marking a significant resistance level where the price might face upward pressure.

USD/CHF:

Potential Direction: Neutral
Overall momentum of the chart: Neutral

Price could potentially make a: Fluctuate between the 1st resistance and 1st support level.

1st support: 0.8393
Supporting reasons: Multi-swing low support, indicating this level may provide a significant point of support if the price declines.

1st resistance: 0.8524
Supporting reasons: Multi-swing high resistance, suggesting this level could act as a significant barrier if the price attempts to rise.

USD/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish
Factors contributing to the momentum: Price is below the bearish Ichimoku cloud.

Price could potentially make a: Bearish continuation towards 1st support.

Pivot: 146.31
Supporting reasons: An overlap resistance, indicating this level could act as a significant resistance point.

1st support: 140.18
Supporting reasons: Multi-swing low support, suggesting this level may provide a strong point of support if the price declines.

1st resistance: 150.91
Supporting reasons: Pullback resistance and 50% Fibonacci Projection, marking a key resistance level where the price could face upward pressure.

USD/CAD:

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: 1.3610
Supporting reasons: Identified as a swing-high resistance that aligns close to a 100% Fibonacci projection, suggesting a potential area where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 1.3431
Supporting reasons: Identified as a swing-low support, indicating a key level where price has found support recently.

1st resistance: 1.3735
Supporting reasons: Identified as an overlap resistance, 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: 0.6983
Supporting reasons: Identified as an overlap resistance that aligns close to a 78.6% Fibonacci projection, indicating a potential level where selling pressures could intensify.

1st support: 0.6895
Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support.

1st resistance: 0.7136
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any 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: 0.6395

Supporting reasons: Identified as a swing-high resistance that aligns close to a 61.8% Fibonacci projection, suggesting a potential level where selling pressures could intensify.

1st support: 0.6339
Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support.

1st resistance: 0.6513
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any 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: 43,294.61
Supporting reasons: Identified as a resistance that aligns with a confluence of Fibonacci levels i.e. a 78.6% projection, a 100% projection and a 161.8% extension, suggesting a potential area where selling pressures could intensify.

1st support: 41,604.84

Supporting reasons: Identified as an overlap support that aligns with a 23.6% Fibonacci retracement, indicating a potential level where price could find support.

1st resistance: 44,941.39

Supporting reasons: Identified as a resistance that aligns with a 100% Fibonacci projection, indicating a potential area that could halt any 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: 19,736.98
Supporting reasons: Identified as a resistance that aligns with a confluence of Fibonacci levels i.e. a 61.8% projection and a 78.6% projection, suggesting a potential area where selling pressures could intensify.

1st support: 18,948.60
Supporting reasons: Identified as a pullback support, indicating a key level where price could find support.

1st resistance: 20,180.97
Supporting reasons: Identified as a resistance that aligns with a 100% Fibonacci projection, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

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: 5,832.00
Supporting reasons: Identified as a resistance that aligns with a confluence of Fibonacci levels i.e. a 78.6% projection and a 127.2% extension, suggesting a potential area where selling pressures could intensify.

1st support: 5,669.89
Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support.

1st resistance: 5,953.58
Supporting reasons: Identified as a resistance that aligns with a 100% Fibonacci projection, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 62,951.62
Supporting reasons: Identified as a pullback support that aligns close to a 23.6% Fibonacci retracement, suggesting a potential level where buying interests could pick up to resume the uptrend.

1st support: 60,386.23
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support.

1st resistance: 65,851.92
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 2,456.65
Supporting reasons: Identified as an overlap support that aligns with a 50% Fibonacci retracement, suggesting a potential level where buying interests could pick up to stage a rebound.

1st support: 2,223.09
Supporting reasons: Identified as a swing-low support, indicating a potential level where price has found support recently.

1st resistance: 2,805.94
Supporting reasons: Identified as an overlap resistance that aligns with a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 72.31
Supporting reasons: Identified as an overlap resistance that aligns with a 50% Fibonacci retracement, suggesting a potential level where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 66.34
Supporting reasons: Identified as a multi-swing-low support, indicating a key level where price has found support in the past.

1st resistance: 78.08
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could potentially make a: Bearish continuation towards 1st support.

Pivot: 2678.43
Supporting reasons: Swing high resistance and 78.60% Fibonacci Projection, indicating this level could act as a significant resistance point.

1st support: 2480.26
Supporting reasons: An overlap support and 50% Fibonacci Retracement, suggesting this level may provide strong support if the price declines.

1st resistance: 2787.21
Supporting reasons: 78.60% Fibonacci Projection, marking a notable resistance level where the price might face upward pressure.

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The post Monday 30th September 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 30 September 2024

What happened in the U.S. session?

Inflationary pressures continue to dissipate further in the U.S. as observed in the latest PCE Price Index released last Friday. This index – which is the Federal Reserve’s preferred gauge of inflation – rose just 0.1% MoM for both headline and core PCE, coming in lower than the forecast of a 0.2% increase while the headline PCE eased from 2.5% to 2.2% YoY, also lower than its estimate of 2.3%. However, core PCE is proving to be stubbornly sticky as it rose from 2.6% in July to 2.7% YoY in August in line with market expectations.

Overall, the latest data marked another month of slower price increases which triggered intense selling pressures for the dollar index (DXY) on Friday. This index was drifting around 100.60 but it dived swiftly following the release of this macroeconomic data point. The DXY plunged as low as 100.15 before settling around 100.40 by the end of this session.

What does it mean for the Asia Session?

Retail sales grew 2.8% YoY in August surpassing market estimates of 2.6% as categories such as textile, clothing, and personal goods; miscellaneous; and sales of machinery & equipment saw robust sales growth. Rising wages in Japan continue to support consumer spending as retail turnover marked the 29th consecutive month of increase. Consistently higher consumer spending could put upward pressures on prices and may nudge the Bank of Japan (BoJ) to move closer to another rate hike this year. Such a move would most certainly strengthen the yen and potentially cause USD/JPY to slide lower – this currency pair was trading around 142.60 at the beginning of this session.

China will release its official National Bureau of Statistics (NBS) PMI reports for the manufacturing and services sector this morning which is expected to show the manufacturing sector contract for the fifth month in a row while services activity will mark its 21st successive month of expansion, albeit at a slower pace with a reading of 50.4. Following the announcement of a massive economic stimulus package last week, PMI output could signal a marked improvement in the coming months. However, September’s figures are likely to disappoint market expectations which would negatively impact commodity prices, especially for crude oil.

The Dollar Index (DXY)

Key news events today

Fed Chair Powell Speaks (5:00 pm GMT)

What can we expect from DXY today?

Federal Reserve Chairman Jerome Powell will be participating in a moderated discussion titled “A View from the Federal Reserve Board” at the National Association for Business Economics Annual Meeting in Nashville where audience questions are expected. Powell could shed further light on the outlook for future monetary policy action by this central bank and traders should brace themselves for higher volatility for the dollar during this event.

Central Bank Notes:

• The Federal Funds Rate target range was reduced by 50 basis points to 4.75% to 5.00% on 18th September in an 11 to 1 vote with Governor Michelle Bowman dissenting, preferring to cut rates by a smaller amount.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and has gained greater confidence that inflation is moving sustainably toward 2%, and judges that the risks to achieving its employment and inflation goals are roughly in 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 slowed, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• 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 6 to 7 November 2024.

Next 24 Hours Bias

Medium Bearish

Gold (XAU)

Key news events today

Fed Chair Powell Speaks (5:00 pm GMT)

What can we expect from Gold today?

Federal Reserve Chairman Jerome Powell will be participating in a moderated discussion titled “A View from the Federal Reserve Board” at the National Association for Business Economics Annual Meeting in Nashville where audience questions are expected. Powell could shed further light on the outlook for future monetary policy action by this central bank and traders should brace themselves for higher volatility for gold prices during this event.

Next 24 Hours Bias

Medium Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie rose for the third consecutive week as it climbed just over 1.4% to close at 0.6902 last Friday, gaining 100 pips in the process. This currency pair rose strongly at the open towards 0.6930 as Asian markets came online – these are the support and resistance levels for today.

Support: 0.6795

Resistance: 0.7000

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 24th September, marking the seventh 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 is still some way above the midpoint of the 2 to 3% target range.
• The trimmed-mean CPI was 3.9% YoY in the June quarter, broadly as forecast in the May Statement on Monetary Policy (SMP) while headline inflation declined in July as measured by the monthly CPI indicator.
• Headline inflation is expected to fall further temporarily but current forecasts do not see inflation returning sustainably to target until 2026.
• GDP data for the June quarter have confirmed that growth has been weak but growth in aggregate consumer demand, which includes spending by temporary residents such as students and tourists, remained more resilient.
• Broader indicators suggest that labour market conditions remain tight, despite some signs of gradual easing while wage pressures have eased somewhat.
• Data since then have reinforced the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out while agreeing that policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range.
• The Board will continue to rely upon the data and the evolving assessment of risks to guide its decisions and will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.
• Next meeting is on 5 November 2024.

Next 24 Hours Bias

Medium Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi rose nearly 1.7% to mark its second consecutive week of appreciation versus the greenback as it gained just over 100 pips to close at 0.6340 on Friday. 

This currency pair climbed strongly at the open tor surge past 0.6350 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.6255

Resistance: 0.6410

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

Medium Bullish

The Japanese Yen (JPY)

Key news events today

Retail Sales (11:50 pm GMT 29th September)

What can we expect from JPY today?

Retail sales grew 2.8% YoY in August surpassing market estimates of 2.6% as categories such as textile, clothing, and personal goods; miscellaneous; and sales of machinery & equipment saw robust sales growth. Rising wages in Japan continue to support consumer spending as retail turnover marked the 29th consecutive month of increase. Consistently higher consumer spending could put upward pressures on prices and may nudge the Bank of Japan (BoJ) to move closer to another rate hike this year. Such a move would most certainly strengthen the yen and potentially cause USD/JPY to slide lower – this currency pair was trading around 142.60 at the beginning of this session.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided, by a unanimous vote, to set the following guideline for money market operations for the intermeeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25%
  2. The Bank will embark 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 consumer price index (CPI, all items less fresh food) has been in the range of 2.5 to 3.0% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a passthrough to consumer prices of cost increases led by the past rise in import prices have waned.
• 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 of the July 2024 Outlook for Economic Activity and Prices, it is likely to be at a level that is generally consistent with the price stability target.
• Japan’s economy has recovered moderately, although some weakness has been seen in part, but it 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 31 October 2024.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

ECB President Lagarde Speaks (1:00 pm GMT)

What can we expect from EUR today?

ECB President Christine Lagarde will be speaking about monetary policy at the European Parliament in Brussels later today where her remarks could inject higher volatility for the Euro. This currency pair was trading around 1.1168 as markets re-opened this morning and it should remain elevated as the day progresses.

Central Bank Notes:

• The Governing Council today decided to reduce the three key ECB interest rates on 12th September, after holding rates steady in July.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 3.65%, 3.90% and 3.50% respectively.
• Recent inflation data have come in broadly as expected, and the latest ECB staff projections see headline inflation averaging 2.5% in 2024, 2.2% in 2025 and 1.9% in 2026.
• For core inflation, the projections for 2024 and 2025 have been revised up slightly, as services inflation has been higher than expected. At the same time, staff continue to expect a rapid decline in core inflation, from 2.9% this year to 2.3% in 2025 and 2.0% in 2026.
• ECB staff projections forecast that the economy will grow by 0.8% in 2024, rising to 1.3% in 2025 and 1.5% in 2026 which is a slight downward revision compared with the June projections, mainly owing to a weaker contribution from domestic demand over the next few quarters.
• 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 17 October 2024.

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Despite last week’s third successive rate cut by the Swiss National Bank (SNB), the franc surprisingly strengthened causing USD/CHF to shed over 1.1%, losing almost 100 pips in the process. Overhead pressures remain for this currency pair as it hovered above 0.8400 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8400

Resistance: 0.8520

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the third consecutive meeting, going from 1.25% to 1.00% in September.
• Inflationary pressure has again decreased significantly compared to the previous quarter, reflecting the appreciation of the Swiss franc over the last three months.
• Inflation in the period since the last monetary policy assessment was lower than expected, standing at 1.1% in August compared to 1.4% in May.
• The new conditional inflation forecast is significantly lower than that of June: 1.2% for 2024, 0.6% for 2025 and 0.7% for 2026, based on the assumption that the SNB policy rate is 1.0% over the entire forecast horizon.
• Swiss GDP growth was solid in the second quarter of 2024 as momentum in the chemicals/pharmaceuticals industry was particularly strong.
• However, growth is likely to remain rather modest in the coming quarters due to the recent appreciation of the Swiss franc and the moderate development of the global economy.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term.
• Next meeting is on 12 December 2024.

Next 24 Hours Bias

Weak Bearish

The Pound (GBP)

Key news events today

GDP (6:00 am GMT)

What can we expect from GBP today?

GDP output is expected to expand at an annualised rate of 0.6% in the second quarter of this year. Economic output has been steady in the U.K. as evident by robust PMI activity over the past nine months and the latest GDP print will likely keep Cable buoyed as the new trading week gets underway.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8 to 1 to maintain Bank Rate at 5.0% while one member preferred to reduce Bank Rate by 25 basis points to 4.75%, on19th September 2024.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes, and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B.
• Twelve-month CPI inflation had been 2.2% in August and July, slightly lower than August Report expectations. Consumer core goods and food price inflation had remained subdued as the cost pressures from previous global shocks had unwound further, and producer price levels had been broadly flat while energy prices had continued to drag on CPI inflation.
• Services price inflation had increased to 5.6% in August compared to 5.2% in July and 5.7% in June. This was slightly lower in August than had been expected at the time of the August Report. There had been volatility in a number of services sub-components in the July and August outturns, including accommodation and catering prices and airfares.
• GDP had increased by 0.6% in 2024 Q2, 0.1 percentage points lower than had been expected in the August Monetary Policy Report. That had followed 0.7% growth in Q1, but Bank staff judged that the underlying pace of growth had been somewhat weaker during the first half of the year. 
• Headline GDP growth was expected to return to its underlying pace of around 0.3% per quarter in the second half of the year. Based on a broad set of indicators, the MPC judged that the labour market continued to loosen but that it remained tight by historical standards.
• Monetary policy decisions have been guided by the need to squeeze persistent inflationary pressures out of the system so as to return CPI inflation to the 2% target both in a timely manner and on a lasting basis; policy has been acting to ensure that inflation expectations remain well anchored.
• In the absence of material developments, a gradual approach to removing policy restraint remains appropriate while 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 7 November 2024.

Next 24 Hours Bias

Medium Bullish

The Canadian Dollar (CAD)

Key news events today

National Day for Truth and Reconciliation (Bank Holiday)

What can we expect from CAD today?

Canadian banks will be closed in observance of the National Day for Truth and Reconciliation today and trading volume is likely to be significantly lower in the domestic markets as only forex brokers will remain open. The Loonie weakened last week to lift USD/CAD above 1.3500 last Friday – this currency pair was trading around 1.3510 as Asian markets came online.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points for the third consecutive meeting to 4.25% while continuing its policy of balance sheet normalization on 4th September.
• Canada’s economy grew 2.1% in the second quarter of 2024, led by government spending and business investment.
• This second quarter GDP growth was slightly stronger than forecast in July, but preliminary indicators suggest that economic activity was soft through June and July.
• As expected, inflation slowed further to 2.5% in July. The Bank’s preferred measures of core inflation averaged around 2.5% and the share of components of the consumer price index growing above 3% is roughly at its historical norm.
• High shelter price inflation is still the biggest contributor to total inflation but is starting to slow while inflation also remains elevated in some other services.
• The labour market continues to slow, with little change in employment in recent months. Wage growth, however, remains elevated relative to productivity.
• The Governing Council is carefully assessing these opposing forces on inflation and monetary policy decisions will be guided by incoming information and our assessment of their implications for the inflation outlook.
• The Bank remains resolute in its commitment to restoring price stability for Canadians.
• Next meeting is on 23 October 2024.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

China NBS Manufacturing PMI (1:30 am GMT)

China NBS Services PMI (1:30 am GMT)

What can we expect from Oil today?

China will release its official National Bureau of Statistics (NBS) PMI reports for the manufacturing and services sector this morning which is expected to show the manufacturing sector contract for the fifth month in a row while services activity will mark its 21st successive month of expansion, albeit at a slower pace with a reading of 50.4. Following the announcement of a massive economic stimulus package last week, PMI output could signal a marked improvement in the coming months. However, September’s figures are likely to disappoint market expectations which would negatively impact commodity prices, especially for crude oil.

Next 24 Hours Bias

Weak Bearish

The post IC Markets Asia Fundamental Forecast | 30 September 2024 first appeared on IC Markets | Official Blog.

• Fed’s Bowman and Powell will both speak on Monday. Let the 25 vs. 50 battle (re) commence!
• US politics – US Vice President Harris raises $55 million in California fundraisers
• Chinese stocks continue to surge
• Bank of England Monetary Policy Committee member Greene speaks on Monday, late NY time
• Japan chief cabinet secretary Hayashi says no comment on daily share moves
• China Caixin September Manufacturing PMI 49.3 (prior 50.4) Services 50.3 (prior 51.6)
• Australian August 2024 Private Sector Credit +0.5% m/m (expected +0.5%)
• China official PMI data: Manufacturing 49.8 (expected 49.5)
• PBOC sets USD/ CNY reference rate for today at 7.0074 (vs. estimate at 7.0098)
• Japanese govmt official says industrial output will bounce back in September on autos
• USD/JPY higher to open the week – update after weekend news and Monday data
• New Zealand September business confidence 60.9 (prior 50.6)
• Japan data – August Industrial production -3.3% m/m (expected -0.9%)
• Japan August Retail Sales 2.8% y/y (expected 2.3%)
• The one word reason why Chinese authorities are piling into stimulus right now. Panic.
• Rabobank look for GBP to outperform EUR in the months ahead
• Not FX. Legendary singer-songwriter Kris Kristofferson has died.
• Talk of a Japanese election October 27
• US economy – “There is no denying it: among the best performing economies in 35+ years”
• Australia’s budget surplus is AUD15.8bn, way better than the 9.8bn expected
• Brexit or Back In? UK finance minister to attend meeting of EU finance ministers
• Weekend – Taiwan on alert over ‘multiple waves’ of missile firing in inland China
• Hedge funds caught short China shares, huge losses exacerbated by Shanghai exchange glitch
• Trading New Zealand markets? NZ switched to daylight saving time over the weekend
• More stimulus from China over the weekend – banks instructed to cut mortgage rates
• Trade ideas thread – Monday, 30 September, insightful charts, technical analysis, ideas
• Monday morning open levels – indicative forex prices – 30 September 2024
• Austria’s far-right partly likely won general election
• Newsquawk Week Ahead: US NFP, ISMs, EZ CPI, Japan Tankan & OPEC+ JMMC
• Weekly Market Outlook (30-04 October)
• Two to watch – Fed Chair Powell speech and NFP are bookend focal points this coming week

It
was the final trading day for Chinese markets ahead of the week-long
holidays. Markets close Tuesday 1 October and reopen on Tuesday 8
October. Over the weekend we had news of more stimulus from China,
the People’s Bank of China announced it’d be instructing banks to
lower mortgage rates for existing home loans before October 31. In
addition, three tier-1 cities (Guangzhou, Shanghai and Shenzhen)
announced easings on home buying. Also
from China today were disappointing September PMIs, both from the
National Bureau of Statistics (NBS) and S&P Global/Caixin. In the
light of all the stimulus announced last week in China these were
shrugged off, very emphatically. Chinese stock markets surged.

Japanese
stocks, on the other hand, were smashed lower. Fingers were pointed
at the prospect of higher interest rates, new PM Ishiba is in favour
of BoJ normalisation. A four big figure drop in USD/JPY on Friday
hasn’t helped either!

Japanese
data releases showed better retail sales, but poor industrial output
in August. A government official said production was weighed by poor
weather – a typhoon! – and will bounce back in September.

In
Japanese political news media reports are of a potential snap
election being called for October 27.

From
New Zealand we had improving business data. NZD/USD rose on the
session, as did AUD/USD.

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

Info comes via a Bloomberg report:

• Kamala Harris raised about $55 million in high-dollar events in California this weekend
• fundraiser on Sunday took in about $28 million
• Saturday’s about $27 million
• Harris began September with $404 million in the bank, compared to $295 million for Trump
• Harris campaign spent an average of $7.5 million a day in August, compared with a $2.6 million daily average for Trump

If money talks in this election Trump is behind.

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

China PMIs from the private survey

These are not good results, but these are old, old news now given all the stimulus announcements from China this past week.

Earlier:

• China official PMI data: Manufacturing 49.8 (expected 49.5)

—

—

China has two primary Purchasing Managers’ Index (PMI) surveys – the official PMI released by the National Bureau of Statistics (NBS) and the Caixin China PMI published by the media company Caixin and research firm Markit / S&P Global.

• The official PMI survey covers large and state-owned companies, while the Caixin PMI survey covers small and medium-sized enterprises. As a result, the Caixin PMI is considered to be a more reliable indicator of the performance of China’s private sector.
• Another difference between the two surveys is their methodology. The Caixin PMI survey uses a broader sample of companies than the official survey.
• Despite these differences, the two surveys often provide similar readings on China’s manufacturing sector.

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

China National Bureau of Statistics (NBS) data

September PMIs

Manufacturing 49.8

• expected 49.5, prior 49.1

Non manufacturing 50.0

• expected 50.4, prior 50.3

more to come

–

—

China has two primary Purchasing Managers’ Index (PMI) surveys – the official PMI released by the National Bureau of Statistics (NBS) and the Caixin China PMI published by the media company Caixin and research firm Markit / S&P Global.

• The official PMI survey covers large and state-owned companies, while the Caixin PMI survey covers small and medium-sized enterprises. As a result, the Caixin PMI is considered to be a more reliable indicator of the performance of China’s private sector.
• Another difference between the two surveys is their methodology. The Caixin PMI survey uses a broader sample of companies than the official survey.
• Despite these differences, the two surveys often provide similar readings on China’s manufacturing sector.

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

Markets Rally into the Weekend – Dow Hits New Record, Up 0.3%

US markets ended another strong week on Friday, with the Dow achieving a fresh record close, rising 0.33% on the day. In contrast, the S&P and Nasdaq posted declines, losing 0.13% and 0.39%, respectively, though both indices enjoyed positive performance over the week. US PCE Price Index data came in slightly below expectations, prompting a fall in both treasury yields and the dollar. The 2-year yield dropped by 6 basis points to 3.563%, while the 10-year shed 3.8 basis points to close at 3.751%. The dollar index fell 0.17% to 100.43. Meanwhile, oil prices rose on Friday amid increasing geopolitical risks in the Middle East, with Brent crude climbing 0.53% to $71.89 and WTI jumping 0.75% to $68.18. Gold, on the other hand, retreated from recent record highs, falling 0.42% on the day but still closing out a historic week at $2,657.97.

US Employment Numbers in Focus This Week

This week promises to be pivotal for financial markets, with a major focus on the latest updates regarding the US jobs market. The Non-Farm Payrolls report on Friday will likely be the key event, but there are three other crucial updates earlier in the week that could significantly influence the Federal Reserve’s interest rate cut plans and their broader impact on the markets. JOLTS Job Openings, ADP Non-Farm Employment, and the weekly Unemployment Claims all hold potential to move markets. It is now widely acknowledged that the Fed’s focus has shifted towards employment data, away from inflation figures. Continued weakening in the labour market could bolster the case for a 50 basis point rate cut in November, while stronger-than-expected figures might lead to heightened volatility, with a retreat in rate cut expectations and a potential rebound for the dollar.

Busy Start to the Trading Week

It looks set to be an active start to the trading week today, with a range of risk events on the calendar and escalating geopolitical tensions likely to generate market-moving headlines. In the Asian session, attention will initially focus on China, where the release of key Manufacturing PMI data is expected to print at 49.4. During the European session, traders will turn their attention to Germany’s CPI data, released incrementally across the session by individual states, which should keep euro traders alert. Though the New York session is light on economic data, with only the Chicago PMI figures scheduled, it could still see significant moves as major central bank figures, including ECB President Christine Lagarde and Federal Reserve Chair Jerome Powell, are due to speak.

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