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The street-low year-end forecast for the euro is 1.02 from Morgan Stanley. G10 FX strategist David Adams spoke in an interview with Bloomberg today highlighting the call.

“There is plenty of scope for the market to refocus on the fact that the
ECB could be cutting deeper and faster than what is currently priced,”
said Adams, who formerly worked at the Federal Reserve Bank of New York.
“This week’s meeting could prove an important catalyst for the market
to start thinking about that.”

Current pricing pricing is for a cut in September but less than a 50% chance of another cut in October. For year end, 63 bps are priced in for the remaining three meetings.

“If data continue to deteriorate further in Europe, the market has to
start thinking about not just 25 basis points a quarter but maybe 25
basis points every meeting or perhaps even the risk of a 50 basis-points
cut, much in the same way the market has applied concerns about a
slowdown in the US to a faster and deeper cutting cycle from the Fed,”
he said.

A drop to 1.02 would be the lowest since November 2022 and it would be a dramatic move to get it there. I do appreciate an out-of-consensus call.

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

WTI now has a $65 handle.

It’s down 4% on the day or $2.75 to $65.96, which is the worst level since May 2023. It’s traded down here on a handful of days in 2023 but if it finishes here it would be the worst close since December 2021.

Needless to day, it’s not a good day for OPEC. The group earlier today took down its 2024 demand growth forecast to 2.03 mbpd from 2.11 mbpd in last month’s report, largely based on less China demand growth. For next year, they see an additional 1.74 mbpd down from 1.78 mbpd previously.

Those numbers are nearly 1 mbpd less than EIA forecasts.

The market initially shrugged off the OPEC forecasts but when combined with poor Chinese import data, it paints a picture of a slowing global economy.

I think there is something of a capitulation here for the oil bulls with crude down in 6 of the past 7 days but it’s not clear what might turn the tide.

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

US equities are back to flat and the dollar and yen are broadly bid on rising risk aversion. The worst victim at the moment is oil, which is down $2.44 to $66.26 as the bulls throw in the towel after OPEC cut demand forecasts today.

Bonds are bid despite a three-year sale today that will be closely watched.

Shares of Oracle are the big winner today, up 13% after some very bullish commentary on AI demand and the long cycle but that hasn’t translated to NVDA, which is up just 0.5%.

The broader market is likely looking at the signals from oil and China’s import data and worried about the macro side of the equation. The Fed can assuage some of that with a 50 bps cut but the market is giving that just a 29% chance at the moment. A soft inflation report tomorrow could help but those risks are two-sided with some prices rising recently.

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

US major indices are mixed in early trading. The Dow industrial average is mostly lower, but the S&P and NASDAQ indices are higher. The Russell 2000 is also trading lower in the first few minutes of trading.

A snapshot of the market seven minutes into the open is showing:

• Dow industrial average, -41.52 points or -0.10% at 40788.08
• S&P index is up 14.76 points or 0.27% at 5485.82.
• NASDAQ index is up 61.37 points or 0.36% at 16945.98.

The small-cap Russell 2000 is a down -13.22 points or -0.63% at 2101.85…

Looking at some of the major movers:

• Nvidia is trading up $0.70 or 0.64% at $107.02
• Meta-Platform is trading up $7.31 or 1.45% at $511.80
• Apple is trading down $3.70 or -1.69% at $217.17 after their product launch day yesterday
• Amazon is trading up $2.88 or 1.66% at $178.38
• Alphabet is trading up $1.46 or 0.95% $150.12..
• Microsoft is trading up $7.38 or 1.82% at $112.97
• Tesla is trading up $4.60 or 2.11% at $220.81

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

• Businesses are hiring much more slowly than people are entering the work force
• Youth unemployment has gone up a lot
• We have very high rates of immigration
• If we were to see a rise in unemployment, that would be a concern
• It’s reasonable to expect further rate cuts

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

The US economic calendar is bare today save for a three-year auction but China released import data earlier today and it showed growth of just 0.5% y/y compared to 2.0% expected. That’s a sharp slowdown from the +7.2% y/y rise in July.

The global manufacturing cycle starts in China and orders for imports are based on how factories view futures demand. Soft imports highlight a tepid view and also underscores poor domestic demand.

The good news is that exports grew at the fastest pace since March of last year. That signals that current demand is still fine (or was in July). What’s notable is that the breakdown shows a 12.2% rise in exports to the US while Europe was down 5.3%.

On the imports side, Australian intake was down 14.3% partly due to a drop in raw materials prices but also reflecting less of an appetite for resources. Iron ore imports were down 4.73% y/y.

With this data set, China’s trade surplus was $91B compared to $82B expected and that will be seen in better growth data. But Nomura worries that will delay fiscal and monetary support.

“The continued strong run of exports may actually delay near-term policy
support, and we continue to expect bolder measures to be released in
Q4,” Nomura analysts said in a note.

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

The post Ex Dividend 11/09/2024 first appeared on IC Markets | Official Blog.

• The ECB meets later this week, what to expect?
• US August NFIB small business optimism index 91.2 vs 93.7 prior
• It’s debate night in the US
• A short-term bottom for USD/JPY?
• European equities open slightly lower to start the day
• What are the main events for today?
• Eurostoxx futures -0.3% in early European trading
• UK July ILO unemployment rate 4.1% vs 4.1% expected
• Germany August final CPI +1.9% vs +1.9% y/y prelim
• Japan LDP lawmaker Ishiba says key task for Japan is to completely exit from deflation
• TradeLocker: The Future of Trading for Brokers and Prop Firms
• FX option expiries for 10 September 10am New York cut
• A breakdown of China’s trade data for the month of August
• UK labour market data in focus in the session ahead
• China records ¥649.34 billion trade surplus in August
• Dollar holds steady after recent rebound

Markets:

• NZD leads, CAD lags on the day
• European equities lower;
  S&P 500 futures down 0.03%
• US 10-year yields up 1 bps to
  3.719%
• Gold up 0.02% to $2,506
• WTI
  crude down 1.12% to $67.94
• Bitcoin
  up 0.22% to $57,165

It’s been another
quiet session. The mood in the markets has been mixed and the moves have been
shallow.

We got just two notable releases: the UK jobs data and the US NFIB small business optimism index. The former came out generally better than expected, although the August payrolls figure printed negative. The latter disappointed with the index dropping to a two-months low.

There’s nothing else for the day except BoC’s Macklem speech at 12:25 GMT/08:25 ET.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

It is not too uncommon to see the ECB not hog the spotlight during policy decision weeks. But when it is accompanied by a change in rates, that is a bit uncommon. This week though will be one of those weeks, as the ECB has already well telegraphed a 25 bps rate cut for this month.

So, the question now is what will come next?

For now, arguably more of the same. They can’t pre-commit to another move just yet and they cannot outright declare victory against inflation just yet.

The good news perhaps is that the economy is not slowing at a recession-like pace, forcing them to go faster in the cycle. It seems like things are just about right for the ECB at the moment.

Some policymakers have come out to say that one rate cut every quarter seems to be ideal currently. And I don’t think Lagarde will want to fight that this week. She may not be explicit about it but she surely won’t rule it out either. That considering the recent progress in economic developments.

As such, there won’t be much to scrutinise from the ECB policy decision this week. That unless we do get a surprise in terms of language from Lagarde. But by now, she should not make such a rookie mistake.

Market players are pricing in ~63 bps of rate cuts for the remaining three meetings this year. That just means it’s a toss up between two 25 bps rate cuts or three. And that will depend on the data in the weeks and month ahead, more so than the ECB decision.

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

This erases the jump from the previous month and is the 32nd straight month that the index remains below its 50-year average of 98. Looking at the details, the most notable is a jump in the uncertainty index to 92 – up 2 points from July. That’s the highest reading since October 2020. It is perhaps a signal of volatility anticipation, especially with markets playing push and pull on Fed rate pricing and the elections coming up.

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

As a reminder, the debate will take place later in the day at 9pm EDT (or 0100 GMT the next day). I shared some thoughts previously in this post here: Just a week to go until the next US presidential debate

As with these things, it often comes down to how things are said rather than what is said on the stage. One only has to look to the previous debate involving Biden and Trump to understand that. Biden pretty much defeated himself and it was a walk in the park for Trump. And that paved the way for Harris to step up to the plate now.

Will Harris be able to appear presidential enough while shooting down Trump’s tirade of personal attacks? Will she have the wits about her to launch her own offensive against Trump? Or will we see Trump bully his way to another debate “victory”? And what about each of their own economic promises and vision? How much of the debate will focus on that this time around?

Those will be things to keep an eye out for, even if they might not directly impact the market outlook – at least for now.

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