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The bulls have been huffing and puffing over the last three weeks but they haven’t blown open the door for a stronger technical breakout yet. Gold price action has been consolidating in a bit of a range recently and the next trade is to arguably go with the break that comes.

I’ll continue to point out that there is a certain discomfort in the rise in gold prices this year. That being it is rather one-sided with little to no pullbacks. There have been consolidation phases like the one now and also from April through to June. However, there hasn’t been any meaningful correction to the surging run in 2024.

And that irks me a little even as a gold bull at heart. A healthy correction to the jump higher looks to be overdue but even then, it is going to be but a dip buying opportunity when it comes. At this stage, that’s the only warning signal I can attribute to gold on the charts.

But at the same time, it’s no surprise to see gold staying more bullish considering all the factors in play. China may have said that they have halted gold purchases for now. However, it is China we’re talking about here. So, I do hold my reservations on their actual motives and transparency.

Otherwise, the structural view continues to stay intact for gold as we look towards the Fed kicking off their rate cut cycle next week.

• The very simple case for buying gold

As for the bigger picture, it will be interesting to see how this gold run plays out as we move closer towards the seasonal buying rush in December and January. If the run stretches on, it might complicate the seasonal outlook when the time comes.

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

The post Ex Dividend 12/09/2024 first appeared on IC Markets | Official Blog.

Treasuries are keeping strongly bid so far this week and we’re seeing some key levels being challenged. 10-year yields are down to their lowest since June last year, down to 3.61% currently. Meanwhile, 2-year yields are down to their lowest in almost two years as it falls by nearly 5 bps today to 3.56% now:

Are traders severely underestimating inflation risks here? Or are they right in saying that inflation isn’t even a factor anymore at the moment?

In that lieu, 10-year breakevens have even dropped to 2.03% – its lowest since the start of 2021 (h/t @ lisaabramowicz1).

And all of this is coming just before the next US CPI report later today at 1230 GMT. I reckon that says a lot about how the market is positioned and what traders are expecting.

Personally, I don’t see how the inflation numbers today will have any significant bearings on the Fed’s decision next week. But if it solidifies the momentum for yields to continue to push lower, that will have broader market ramifications regardless.

As such, it is definitely something to keep an eye out for especially with the 2-year yields chart above in play.

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

• 92 of 101 economists expect a 25 bps rate cut next week
• 65 of 95 economists expect three 25 bps rate cuts for the remainder of the year
• 54 of 71 economists believe that the Fed cutting by 50 bps at any of the meetings as ‘unlikely’

On the final point, five other economists believe that a 50 bps rate cut for this year is ‘very unlikely’. Meanwhile, there were thirteen economists who thought that it was ‘likely’ with four saying that it is ‘very likely’ for the Fed to go big.

Anyway, the poll points to a clear expectation for the Fed to cut by just 25 bps at its meeting next week. And for the year itself, there is stronger conviction for three rate cuts after taking on that narrative back in August (as seen with the image above).

Some comments:

“The employment report was soft but not disastrous. On Friday, both Williams and Waller failed to offer explicit guidance on the pressing question of 25 bps vs 50 bps for September, but both offered a relatively benign assessment of the economy, which points strongly, in my view, to a 25 bps cut.” – Stephen Stanley, chief US economist at Santander

“If the Fed were to cut by 50 bps in September, we think markets would take that as an admission it is behind the curve and needs to move to an accommodative stance, not just get back to neutral.” – Aditya Bhave, senior US economist at BofA

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

• Eurostoxx +0.3%
• Germany DAX +0.3%
• France CAC 40 +0.3%
• UK FTSE +0.1%
• Spain IBEX +0.8%
• Italy FTSE MIB +0.2%

It’s a mixed start to the day as risk sentiment is nudging back and forth a little. S&P 500 futures are now down just 0.2% from around 0.5% earlier as well. But bond yields are holding lower, so that is keeping things in check in the bigger picture. In FX, USD/JPY remains down by 0.7% to 141.45 but well off earlier lows of 140.70 on the day.

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

• Prior 0.0%
• Services +0.1% vs +0.2% m/m expected
• Prior -0.1%
• Industrial output -0.8% vs +0.3% m/m expected
• Prior +0.8%
• Manufacturing output -1.0% vs +0.2% m/m expected
• Prior +1.1%
• Construction output -0.4% vs +0.4% m/m expected
• Prior +0.5%

The readings above are all a miss on estimates, as the UK economy stagnated in the month of July. Looking at the breakdown, services contributed 0.11% to GDP on the month but that was offset by a 0.10% decline in production and 0.03% fall in construction. After having already stagnated in June as well, the UK economy is starting to see slower times now in Q3.

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

Global Markets:

•  Asian Stock Markets : Nikkei down 1.63%, Shanghai Composite down 1.07%, Hang Seng down 1.33% ASX down 0.41%
• Commodities : Gold at $2550.35 (0.29%), Silver at $28.9 (1.21%), Brent Oil at $69.80 (1.09%), WTI Oil at $66.3 (1.08%)
• Rates : US 10-year yield at 3.617, UK 10-year yield at 3.822, Germany 10-year yield at 2.148

News & Data:

• (USD) NFIB Small Business Index  91.2  vs 93.6 expected

Markets Update:

Asia-Pacific markets declined on Wednesday, with Japan’s Nikkei 225 leading the losses. The index dropped 1.6%, extending its losing streak to seven days, while the Topix fell 1.8%.

Investors in Asia evaluated economic data from Japan and South Korea. South Korea reported a drop in unemployment to 2.4% in August, the lowest since 1999. In Japan, the Reuters Tankan survey showed business confidence among large manufacturers hit a seven-month low in September, declining to plus 4 from plus 10 in August. Non-manufacturing sentiment also fell for the third consecutive month.

Bank of Japan board member Junko Nakagawa stated that the central bank would continue raising interest rates if economic conditions aligned with forecasts. She emphasized the need to carefully assess market changes following the July policy shift.

The Japanese yen strengthened to its highest level against the U.S. dollar since January, trading at 141.68. Meanwhile, investors also considered the U.S. presidential debate between Donald Trump and Kamala Harris.

Elsewhere, Taiwan Semiconductor Manufacturing Co. reported August revenues of 250.87 billion New Taiwan Dollars ($7.8 billion), up 33% year-on-year, though shares dipped slightly. South Korea’s Kospi fell 0.57%, while Kosdaq rose 0.57%. Australia’s S&P/ASX 200 lost 0.4%, and Hong Kong’s Hang Seng dropped 1.3%.

In the U.S., stocks fluctuated, with the S&P 500 up 0.45% and the Nasdaq rising 0.84%. The Dow Jones Industrial Average, however, dipped 0.23%.

Upcoming Events: 

• 12:30 PM GMT – USD Core CPI m/m
• 12:30 PM GMT – USD CPI m/m
• 12:30 PM GMT – USD CPI y/y

The post Wednesday 11th September 2024: Asia-Pacific Markets Slide as Nikkei Leads Losses first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 11 September 2024

What happened in the Asia session?

After what started as a relatively quiet morning, demand for the yen picked up noticeably sending the yen crosses lower as Bank of Japan (BoJ) board member Junko Nakagawa reiterated the central bank’s hawkish stance of further rate hikes in 2024. USD/JPY broke cleanly under the 142-level before plunging below 141 to hit a low of 140.90 by Asia midday. With the next monetary policy meeting taking place on 20th September, the yen is certain to face higher volatility from now till next Friday.

What does it mean for the Europe & US sessions?

After stalling in June, the U.K.’s economy is anticipated to grow 0.2% MoM in July. GDP output has been pretty steady in 2024 so far while PMI activity has also expanded over the last few months. Should the latest GDP result print to the upside, the Pound could receive a boost before the start of the European trading hours.

Moving over to crude oil, the API stockpiles declined for the third consecutive week to signal higher demand in the U.S. overnight but it could not prevent oil prices from tumbling lower with the oil bears firmly in control. The EIA crude oil inventories are due for release later today but even a higher drawdown in these storage levels would probably not be sufficient to stabilize prices.

The Dollar Index (DXY)

Key news events today

CPI (12:30 pm GMT)

What can we expect from DXY today?

Inflationary pressures for the American consumer have dissipated quite steadily in recent months and this downward trend is likely to continue for the month of August as headline CPI is expected to moderate lower from 2.9% YoY in July to 2.6% YoY. Another month of cooler prices will cement the Federal Reserve’s first interest rate cut on 18th September and will likely create strong headwinds for the dollar later today.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

CPI (12:30 pm GMT)

What can we expect from Gold today?

Inflationary pressures for the American consumer have dissipated quite steadily in recent months and this downward trend is likely to continue for the month of August as headline CPI is expected to moderate lower from 2.9% YoY in July to 2.6% YoY. Another month of cooler prices will cement the Federal Reserve’s first interest rate cut on 18th September and will likely create strong headwinds for the dollar which could provide a boost for gold later today.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie stayed under the 0.6650-level overnight as demand for the greenback remained strong. This currency pair was trading around 0.6645 as Asian markets came online – these are the support and resistance levels for today.

Support: 0.6630

Resistance: 0.6700

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 6th August, marking the sixth consecutive pause.
• Inflation has fallen substantially since its peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance but it still remains above the midpoint of the 2 to 3% target range.
• The CPI rose by 3.9% over the year to the June quarter, demonstrating that inflation is proving persistent. In year-ended terms, underlying inflation has now been above the midpoint of the target for 11 consecutive quarters while quarterly underlying CPI inflation has fallen very little over the past year.
• The central forecasts set out in the latest SMP are for inflation to return to the target range of 2 to 3% in late 2025 and approach the midpoint in 2026. This represents a slightly slower return to target than forecast in May, based on estimates that the gap between aggregate demand and supply in the economy is larger than previously thought.
• Momentum in economic activity has been weak, as evidenced by slow growth in GDP, a rise in the unemployment rate and reports that many businesses are under pressure. In addition, there is a risk that household consumption picks up more slowly than expected, resulting in continued subdued output growth and a noticeable deterioration in the labour market.
• Inflation in underlying terms remains too high, and the latest projections show that it will be some time yet before inflation is sustainably in the target range while recent data have reinforced the need to remain vigilant to upside risks to inflation and the Board is not ruling anything in or out.
• Policy will need to be sufficiently restrictive until the Board is confident that inflation is moving sustainably towards the target range and will rely upon the incoming data and the evolving assessment of risks to guide its decisions.
• Next meeting is on 5 November 2024.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Higher demand for the greenback kept the Kiwi under 0.6150 overnight. This currency pair was trading around 0.6140 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.6120

Resistance: 0.6235

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The yen appreciated yesterday as USD/JPY reversed from a high of 143.71 before tumbling under 142.50. Demand continues to remain strong putting downward pressure on USD/JPY. This currency pair was trading around 142.20 as Asian markets came online – these are the support and resistance levels for today.

Support: 141.60

Resistance: 143.70

Central Bank Notes:

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

Next 24 Hours Bias

Medium Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

Overnight demand for the greenback drove the Euro down towards the 1.1000 threshold but it found a floor around 1.1020 and consolidated around this region by the end of the U.S. session. This currency pair was rising towards 1.1050 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 1.1020

Resistance: 1.1125

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Demand safe-haven currencies picked up yesterday as the franc also strengthened alongside the yen. This increase in the franc caused USD/CHF to reverse from just under 0.8500 to dive as low as 0.8456. This currency pair remains under pressure and was sliding towards the 0.8400 threshold at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8390

Resistance: 0.8520

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bearish

The Pound (GBP)

Key news events today

GDP (6:00 am GMT)

What can we expect from GBP today?

After stalling in June, the U.K.’s economy is anticipated to grow 0.2% MoM in July. GDP output has been pretty steady in 2024 so far while PMI activity has also expanded over the last few months. Should the latest GDP result print to the upside, the Pound could receive a boost before the start of the European trading hours.

Central Bank Notes:

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

Next 24 Hours Bias

Weak Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Plummeting crude oil prices have significantly removed demand for the Loonie causing USD/CAD to surge past the 1.3600-threshold overnight. This currency pair hit a high of 1.3616 before pulling back slightly to trade around 1.3600 as Asian markets came online – these are the support and resistance levels for today.

Support: 1.3490

Resistance: 1.3650

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

Medium Bullish

Oil

Key news events today

EIA Crude Oil Inventories (2:30 pm GMT)

What can we expect from Oil today?

OPEC’s monthly report for September highlighted weaker global demand in 2024 in its latest forecast, stating that demand would rise by 2.03M barrels per day (bpd), down from last month’s forecast of a 2.11M bpd increase. WTI oil dived under the $66 per barrel yesterday as oil traders digest the latest OPEC report and this benchmark was sliding towards the $65.50-mark once again, inching closer to the lows of $63.65 per barrel last seen in May of 2023. 

Although the API stockpiles declined for the third consecutive week to signal higher demand in the U.S., it could not prevent oil prices from tumbling lower with the oil bears firmly in control. The EIA crude oil inventories are due for release later today but even a higher drawdown in these storage levels would probably not be sufficient to stabilize prices.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 11 September 2024 first appeared on IC Markets | Official Blog.

US Markets Mixed Ahead of Debate and Data – Nasdaq up 0.8%

US stock indices had a mixed trading day yesterday as investors anticipated the potential impacts of the first presidential debate between Kamala Harris and Donald Trump, along with key CPI data. The Dow Jones fell by 0.23%, while the S&P 500 and Nasdaq posted gains, finishing up 0.45% and 0.84%, respectively. The dollar and treasury yields hovered around recent levels, with the dollar rising 0.06% on the index. Treasury yields dipped slightly, with the 2-year yield down 2 basis points to 3.643%, and the 10-year yield off by 1.4 basis points, closing at 3.685%.

Oil was the standout mover of the day, with Brent crude hitting a three-and-a-half-year low, dropping 3.69% to $69.19 a barrel. WTI fell further, losing 4.31% to close at $65.75 a barrel. Meanwhile, gold edged higher, gaining 0.5% to finish at $2,516.61 an ounce.

Inflation Data is Not the Only Focus Today

It has already been a long trading week in the US, with markets largely treading water ahead of today’s crucial US CPI data release. However, it is not the only event drawing attention. The first presidential debate could also influence market sentiment. That said, investors are likely to place more weight on the data than political developments—unless, of course, something extraordinary happens. The headline figures are expected to show a 0.2% month-on-month increase for both CPI and core CPI, with a year-on-year rise of 2.5%. Any significant deviations from these expectations could trigger sharp market movements as traders reassess how much the Federal Reserve might cut rates next week.

Busy Day Ahead for Traders

Traders face a relatively full calendar of risk events today, offering a bit of something for everyone. During the Asian session, investor attention will remain unusually fixed on US markets due to the presidential debate, which could have far-reaching consequences following Joe Biden’s recent departure.

In Europe, the focus will shift to the UK’s GDP release, where a 0.2% month-on-month growth is expected. Currency traders will be watching the pound closely for any significant moves following the announcement.

However, the main event remains the US session, with the key CPI data release expected early in the day. Oil traders, in particular, will be bracing for further volatility, especially with the release of US inventory data, which could add further turbulence to an already unstable market.

The post General Market Analysis – 11/09/24 first appeared on IC Markets | Official Blog.

The bond market is in the driver’s seat and traders don’t seem to want to wait around for the Fed next week. 10-year Treasury yields have now dropped to its lowest since June last year and 2-year yields are threatening an even bigger level on the charts now:

Things are certainly heating up on the week and the action here is reverberating to broader markets. USD/JPY is now down another 1% to clip the 141.00 mark, with eyes on the December low at 140.24 and the 140.00 level next. The latter is a crucial psychological level to watch, so do be mindful about that.

Meanwhile, US futures are weighed lower as well with S&P 500 futures now down 0.5%.

That is pretty much how things are playing out now ahead of European trading. Looking to the session ahead, there won’t be much on the agenda to impact the ongoing proceedings. We do have UK monthly GDP data but that’s a minor release, all things considered.

As such, trading sentiment is going to continue to center around the flows in the bonds and how that plays to broader market sentiment. With Treasuries staying bid again, the dollar might be weighed down at the balance. But with risk also leaning towards the softer side, it might not extend towards the antipodeans.

Those will be some key considerations before we get to the US CPI report later in the day.

0600 GMT – UK July monthly GDP figures1100 GMT – US MBA mortgage applications w.e. 6 September

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.

The pricing there is reflected in the fall in bond yields this week, with 10-year Treasury yields now hitting its lowest since June last year. The odds of a 50 bps rate cut next week now stands at ~35%, up from around ~25% early Monday. It’s still down from the near coin flip odds prior to the US jobs report last week though.

But if anything else, it speaks to a continued push and pull in market pricing and sentiment. My take coming into this week was that market players would’ve looked to settle closer towards a 25 bps move. That doesn’t seem to be the case now at all. And with the bond market acting up as it is, this week just got a whole lot more interesting.

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

We’re already starting to see some notable market moves on the day ahead of European trading. I would argue the main culprit to be the bond market, after the move there yesterday. 10-year Treasury yields fell below the threshold of what might’ve resembled a short-term bottom around 3.67%. And that is continuing today, with yields down another 2 bps to 3.62%. In turn, that is triggering some broader market moves so far today.

USD/JPY in particular is down 1% to 141.00, not helped by some remarks by BOJ policymaker Nakagawa earlier here. The pair remains very closely tied to action in the bond market at the moment. And while I would’ve presumed it might be a quieter week, it seems like bond traders aren’t waiting around for the Fed next week.

Besides that, we’re starting to see equities sentiment also suffer a bit after the gains overnight. S&P 500 futures are now down 0.5% with Nasdaq futures down 0.6%.

The move in the bond market is pretty much setting the tone across all other asset classes at the moment.

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