The dollar has seen some steadier tones in the last few sessions but USD/JPY endured a bit more of a mix of fortunes. The pair was down on Friday as bond yields fell but rebounded in trading yesterday. The bounce is keeping up somewhat today, with the pair now up 0.2% to just above 143.50.

It’s not indicative of much but the chart pattern is certainly starting to intrigue.

There looks to be a bit of a double-bottom pattern now near 142.00. And let’s see how that compares to the closely correlated 10-year Treasury yields chart.

It is somewhat similar with yields finding a bit of a double-bottom near 3.67% as well. You can also ascribe it to the 3.70% level but that’s just semantics at this point.

So, what does this all say?

In a week where market players are going to have little to work with and turning their anticipation towards the Fed next week, the charts above likely indicate that there shouldn’t be a meaningful breakdown in either USD/JPY or 10-year Treasury yields in the days ahead.

That unless of course there is a major surprise to the narrative ahead of the Fed next week. The only one that I can think of will be the US CPI report tomorrow. But even that, I doubt it will matter too much.

Traders are convinced that the inflation monster has been slain and policymakers are also not making a great deal of it anymore.

So, if anything else, perhaps the weekly initial jobless claims might offer a bigger surprise factor – if any.

Otherwise, I’d wager we might just observe a more consolidative mood in both USD/JPY and the bond market until we get to the Fed next week. That at least based on what the charts are suggesting, with there being no technical breakdown for now.

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

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

UK stocks are the ones lagging as the labour market data affirms that at the balance, the BOE can keep policy steady next week. That despite wages continuing to cool, both in nominal and real terms. Anyway, equities are keeping more pensive to start the day overall. S&P 500 futures are down 0.1% with Nasdaq futures down 0.3% currently.

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

Global Markets:

•  Asian Stock Markets : Nikkei up 0.06%, Shanghai Composite up 0.27%, Hang Seng up 0.33% ASX up 0.32%
• Commodities : Gold at $2533.35 (0.29%), Silver at $28.7 (0.21%), Brent Oil at $71.50 (-0.49%), WTI Oil at $68.3 (-0.38%)
• Rates : US 10-year yield at 3.710, UK 10-year yield at 3.857, Germany 10-year yield at 2.178

News & Data:

• (USD) Final Wholesale Inventories m/m  0.2%  vs 0.3% expected
• (USD) Consumer Credit m/m  25.5B  vs 12.3B expected

Markets Update:

Asia-Pacific markets climbed on Tuesday, following gains in the U.S. as the S&P 500 and Nasdaq Composite rebounded from their worst week of the year. The S&P 500 rose by 1.16%, recovering from its worst week since March 2023, while the Nasdaq Composite also increased by 1.16%, bouncing back from its worst week in over two years.

Investors in Asia are focused on trade data from China and India for August. China’s exports grew 8.7% year-on-year, while imports increased by 0.5%, beating forecasts of 6.5% and 2%, respectively. This follows July’s data, which showed a 7% rise in exports and a stronger-than-expected 7.2% increase in imports.

In Hong Kong, the Hang Seng Index rose 0.3%, and Taiwan’s Weighted Index was flat. Shares of Alibaba surged over 4% after being added to the Stock Connect scheme, which facilitates cross-border trading between China and Hong Kong.

Apple concluded an event in Cupertino, California, where it unveiled the iPhone 16 Pro and iPhone 16 Pro Max. Preorders for these premium models begin on Friday, with a launch date set for September 20. 

In Japan, the Nikkei 225 edged up by 0.1%, while the broader Topix gained 0.34%. South Korea’s Kospi Index added 0.04%, although the smaller Kosdaq slipped by 0.4%. Meanwhile, the Dow Jones Industrial Average in the U.S. climbed 1.2%, rebounding from last week’s significant losses.

Upcoming Events: 

• 2:00 PM GMT – USD FOMC Member Barr Speaks

The post Tuesday 10th September 2024: Asia-Pacific Markets Climb Amid Wall Street Rebound and Strong China Trade Data first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 10 September 2024

What happened in the Asia session?

The dollar index (DXY) pulled back slightly this morning to stabilize around 101.60 before resuming the uptrend. It was climbing towards 101.80 while spot prices for gold managed to climb above $2,500/oz. Stronger demand for the dollar has put some downward pressure on this precious metal but it gained traction to grind higher by Asia midday.

What does it mean for the Europe & US sessions?

Claimant count change spiked in July as claims surged by 135K, way above the readings for May (51.9K) and June (36.2K) while the unemployment rate edged lower from 4.4% down to 4.2%. The estimate of 95.5K claims for August points to another elevated figure – should claims print higher than this forecast while the unemployment rate ticks higher, the Pound could face significant headwinds before the start of the European session.

The final CPI print for the month of August for Germany is anticipated to show prices falling 0.1% MoM while the annualised reading is anticipated to slow from 2.3% YoY in July to 1.9% YoY. Inflationary pressures have dissipated steadily due to the depressed levels of manufacturing activity and it could cause the Euro to fall even further today.

Following last week’s interest rate cut, Bank of Canada Governor Tiff MAcklem will be speaking at the Canada-United Kingdom Chamber of Commerce in London where he could shed further insights into the outlook on future monetary policy actions by this central bank. Demand for the greenback has picked up significantly since last Friday causing USD/CAD to surge past 1.3550 – any further dovish comments by Governor Macklem will likely lift his currency pair even higher.

The Dollar Index (DXY)

Key news events today

FOMC Member Barr Speaks (2:00 pm GMT)

FOMC Member Bowman Speaks (4:15 pm GMT)

What can we expect from DXY today?

There are not one but two Federal Reserve Governors speaking today. Up first is Governor Michael Barr who will be speaking about Basel III at the Brookings Institution in Washington DC where audience are questions expected while Governor Michelle Bowman delivers her speech titled “The Future of Stress Testing and the Stress Capital Buffer Framework” at the Executive Council of the Banking Law Section of the Federal Bar Association in Arlington. Should either of them drop further dovish rhetoric, it could limit the recent gains seen in the dollar.

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

Medium Bullish

Gold (XAU)

Key news events today

FOMC Member Barr Speaks (2:00 pm GMT)

FOMC Member Bowman Speaks (4:15 pm GMT)

What can we expect from Gold today?

There are not one but two Federal Reserve Governors speaking today. Up first is Governor Michael Barr who will be speaking about Basel III at the Brookings Institution in Washington DC where audience are questions expected while Governor Michelle Bowman delivers her speech titled “The Future of Stress Testing and the Stress Capital Buffer Framework” at the Executive Council of the Banking Law Section of the Federal Bar Association in Arlington. Should either of them drop further dovish rhetoric, it could limit the recent gains seen in the dollar and potentially lift gold prices.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie dropped to an overnight low of 0.6644 as demand for the U.S. dollar returned. This currency pair was trading around 0.6655 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

Medium Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Higher demand for the greenback drove the Kiwi under 0.6150 overnight. This currency pair was trading around 0.6135 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

Medium Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Demand for the yen waned yesterday as USD/JPY rose as high as 143.79. This currency pair dipped under 143 during the U.S. session but it resumed the uptrend to trade around 143.50 as Asian markets came online – these are the support and resistance levels for today.

Support: 142.00

Resistance: 145.00

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 Bullish

The Euro (EUR)

Key news events today

Germany CPI (6:00 am GMT)

What can we expect from EUR today?

The final CPI print for the month of August for Germany is anticipated to show prices falling 0.1% MoM while the annualised reading is anticipated to slow from 2.3% YoY in July to 1.9% YoY. Inflationary pressures have dissipated steadily due to the depressed levels of manufacturing activity and it could cause the Euro to fall even further today.

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

Medium Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Demand for the dollar increased significantly causing USD/CHF to rise towards the 0.8500-level overnight. This currency pair was trading around 0.8495 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8390

Resistance: 0.8550

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

Medium Bullish

The Pound (GBP)

Key news events today

Labour Force Report (6:00 am GMT)

What can we expect from GBP today?

Claimant count change spiked in July as claims surged by 135K, way above the readings for May (51.9K) and June (36.2K) while the unemployment rate edged lower from 4.4% down to 4.2%. The estimate of 95.5K claims for August points to another elevated figure – should claims print higher than this forecast while the unemployment rate ticks higher, the Pound could face significant headwinds before the start of the European session.

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

Medium Bearish

The Canadian Dollar (CAD)

Key news events today

BoC Gov Macklem Speaks (12:10 pm GMT)

What can we expect from CAD today?

Following last week’s interest rate cut, Bank of Canada Governor Tiff MAcklem will be speaking at the Canada-United Kingdom Chamber of Commerce in London where he could shed further insights into the outlook on future monetary policy actions by this central bank. Demand for the greenback has picked up significantly since last Friday causing USD/CAD to surge past 1.3550 – any further dovish comments by Governor Macklem will likely lift his currency pair even higher.

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

OPEC Report (11:00 am GMT)

API Crude Oil Stock (2:30 pm GMT)

What can we expect from Oil today?

OPEC will release its monthly report for September where oil traders will receive the latest insights such as the current state of production and demand levels, and refinery operations for crude oil. There could even be clues on the proposed increase in production supply by OPEC+ and when it could come into effect. Later on, the API will release its update on the latest inventory levels in the U.S. which have drawn down quite strongly over the last couple of weeks – a third consecutive week of a higher-than-anticipated draw could function as a tailwind for crude oil.

Meanwhile, oil prices stabilized yesterday before climbing higher with WTI oil finding support around $68 per barrel. This benchmark gained 0.6% overnight and continued its ascend to rise above the $69-level as Asian markets came online this morning.

Next 24 Hours Bias

Weak Bullish

The post IC Markets Europe Fundamental Forecast | 10 September 2024 first appeared on IC Markets | Official Blog.

• Prior 4.2%
• Employment change 265k vs 123k expected
• Prior 97k
• Average weekly earnings +4.0% vs +4.1% 3m/y expected
• Prior +4.5%; revised to +4.6%
• Average weekly earnings (ex bonus) +5.1% vs +5.1% 3m/yexpected
• Prior +5.4%
• August payrolls change -59k
• Prior 24k; revised to -6k

The jobless rate ticks a little lower with employment change beating estimates in July. However, payrolls for August declined further after a negative revision to the July figure. So, there’s that sort of cancelling one another. And it doesn’t help with ONS continuing to attach a caveat to the data, noting that the estimates continue to contain uncertainty.

Besides that, the BOE can take comfort from the wages front at least. The readings roughly meet estimates and are lower than in the three months to June previously. Both total pay and regular pay are also down to 1.1% and 2.2% respectively in real terms in the three months to July. That is down from 1.6% and 2.4% previously in the three months to June.

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

• Prior +2.3%
• HICP +2.0% vs +2.0% y/y prelim
• Prior +2.6%

Core annual inflation is seen at 2.8% year-on-year in August, so there is still some work to do to get that down. But overall, this still will give the ECB some room to work with in arguing for a rate cut once every quarter. At least for now.

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

• Does not believe that private consumption has recovered strongly yet
• Will aim to achieve conditions where wages grow sustainably so can fully exit from deflation

The leadership race should likely come down to a battle between Ishiba and current digital minister, Tara Kono. For some context, Kono also ran for the post back in 2021 but lost out to Kishida. Funnily enough, it was Ishiba who was the one backing him at the time. Besides them, Shinjiro Koizumi – son of former prime minister Junichiro Koizumi – will also be one to keep an eye out for.

Anyway, Ishiba seems to be one for pushing more domestic policies to bolster growth. So, that will be something to watch for if he gets elected as prime minister. The LDP election will be held later this month on 27 September.

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

DXY (US Dollar Index):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop to 1st support.

Pivot: 102.14
Supporting reasons: Pullback support, aligned with the 61.80% Fibonacci Retracement and 127.20% Fibonacci Extension, indicating Fibonacci confluence where price might face selling pressure.

1st support: 101.11
Supporting reasons: An overlap support, suggesting a potential level where price might find buying interest to prevent further declines.

1st resistance: 102.93
Supporting reasons: Pullback resistance, indicating a level where price may encounter resistance during a potential upward move.

EUR/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and head towards 1st resistance.

Pivot: 1.1021
Supporting reasons: An overlap support, suggesting a key level where price might find support and bounce back.

1st support: 1.0943
Supporting reasons: An overlap support, aligned with the 61.80% Fibonacci Retracement and 161.80% Fibonacci Extension, indicating Fibonacci confluence where price might find strong support.

1st resistance: 1.1103
Supporting reasons: Pullback resistance, indicating a potential level where price may face selling pressure during an upward move.

EUR/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce off the pivot and head towards 1st resistance.

Pivot: 157.55
Supporting reasons: Swing low support, suggesting a key level where price might bounce back.

1st support: 155.90
Supporting reasons: Multi-swing low support, indicating a potential level where price may find buying interest to prevent further declines.

1st resistance: 160.41
Supporting reasons: Pullback resistance, aligned with the 50% Fibonacci Retracement, indicating a key level where price may face selling pressure during an upward move.

EUR/GBP:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop to 1st support.

Pivot: 0.8490
Supporting reasons: Identified as pullback support, reinforced by the 38.2% Fibonacci Retracement, indicating a potential area where the price might stall before continuing downward.

1st support: 0.8409
Supporting reasons: Marked as a multi swing low support, suggesting a significant area where previous declines have found a buying interest.

1st resistance: 0.8543

Supporting reasons: Recognized as pullback resistance, supported by the 61.8% Fibonacci Retracement, indicating a potential level where the price may face selling pressure if it retraces upward.

GBP/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and head towards 1st resistance.

Pivot: 1.30236

Supporting reasons: Pullback support, aligned with the 38.20% Fibonacci Retracement, suggesting a key level where price may find buying interest.

1st support: 1.2942
Supporting reasons: Pullback support, indicating a potential level where price might prevent further declines.

1st resistance: 1.3102
Supporting reasons: an overlap resistance, suggesting a key level where price may face selling pressure during an upward move.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish
Factors contributing to the momentum is that price is: Below the bearish Ichimoku cloud

Price could potentially make a bearish reaction off the pivot and drop to 1st support.

Pivot: 187.95

Supporting reasons: an overlap resistance, aligned with the 23.60% Fibonacci Retracement, indicating a key level where price might face selling pressure.

1st support: 184.79
Supporting reasons: overlap support, indicating a potential level where price might find buying interest to prevent further declines.

1st resistance: 189.77

Supporting reasons: An overlap resistance,  aligned with the 50% Fibonacci Retracement, suggesting a potential area where price may face resistance during an upward move.

USD/CHF:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a Bullish continuation toward 1st resistance

Pivot: 0.8392
Supporting reasons: Multi-swing low support, suggesting a key level where price might bounce back.

1st support: 0.8304
Supporting reasons: Aligned with the 61.80% Fibonacci Projection and 161.80% Fibonacci Extension, indicating Fibonacci confluence where price might find support.

1st resistance: 0.8549
Supporting reasons: An overlap resistance, aligned with the 38.20% Fibonacci Retracement, suggesting a key level where price may face selling pressure during an upward move.

USD/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop to 1st support.

Pivot: 143.66
Supporting reasons: An overlap resistance, aligned with the 38.20% Fibonacci Retracement, suggesting a key level where price might face resistance and reverse.

1st support: 141.67
Supporting reasons: Swing low support, indicating a potential level where price might find buying interest to prevent further declines.

1st resistance: 145.46
Supporting reasons: An overlap resistance, suggesting a level where price may encounter resistance during an upward move.

USD/CAD:

Potential Direction: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 1.3616
Supporting reasons: Identified as an overlap resistance that aligns close to a 38.2% Fibonacci retracement, suggesting a potential area where selling pressures could intensify.

1st support: 1.3493
Supporting reasons: Identified as a swing low support, indicating a key level where price has found support recently.

1st resistance: 1.3699
Supporting reasons: Identified as an overlap resistance that aligns close to a 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

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

Pivot: 0.6640
Supporting reasons: Identified as a pullback support that aligns with a 38.2% Fibonacci retracement, suggesting a potential level where buying interests could pick up to stage a minor rebound.

1st support: 0.6582
Supporting reasons: Identified as a pullback support that aligns close to a 50% Fibonacci retracement, indicating a key level where price has found support in the past.

1st resistance: 0.6752
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bullish
Overall momentum of the chart: Bearish

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

Pivot: 0.6124
Supporting reasons: Identified as an overlap support that aligns with a 38.2% Fibonacci retracement, suggesting a potential level where buying interests could pick up to stage a minor rebound.

1st support: 0.6077
Supporting reasons: Identified as an overlap support that aligns with a 50% Fibonacci retracement, indicating a potential level where price has found support in the past.

1st resistance: 0.6234
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

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 drop towards the 1st support.

Pivot: 41,056.42
Supporting reasons: Identified as a pullback resistance that aligns with a 61.8% Fibonacci retracement, suggesting a potential level where selling pressures could intensify.

1st support: 40,202.56
Supporting reasons: Identified as a swing-low support, indicating a key level where price has found support recently.

1st resistance: 41,590.34
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

DE40 (DAX):

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 drop towards the 1st support.

Pivot: 18,546.80
Supporting reasons: Identified as an overlap resistance that aligns with a 38.2% Fibonacci retracement, suggesting a potential level where selling pressures could intensify.

1st support: 18,244.50
Supporting reasons: Identified as a multi-swing-low support that aligns with a 38.2% Fibonacci retracement, indicating a key level where price has found support recently.

1st resistance: 18,753.45
Supporting reasons: Identified as an overlap resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

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 drop towards the 1st support.

Pivot: 5,534.10
Supporting reasons: Identified as an overlap resistance that aligns close to a 61.8% Fibonacci retracement, suggesting a potential level where selling pressures could intensify.

1st support: 5,385.30
Supporting reasons: Identified as a swing-low support that aligns with a 50% Fibonacci retracement, indicating a key level where price has found support recently.

1st resistance: 5,650.40
Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price has made a bearish reversal off the pivot and could potentially fall towards 1st support.

Pivot: 57,286.93
Supporting reasons: Identified as an overlap resistance that aligns with a 38.2% Fibonacci retracement, suggesting a potential level where selling pressures could intensify.

1st support: 53,477.38
Supporting reasons: Identified as a swing-low support, indicating a key level where price has found strong support recently.

1st resistance: 60,782.67
Supporting reasons: Identified as a swing-high resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

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

Pivot: 2,457.10
Supporting reasons: Identified as a swing-high resistance that aligns close to a 50% Fibonacci retracement, suggesting a potential level where selling pressures could intensify.

1st support: 2,204.57
Supporting reasons: Identified as a swing-low support, indicating a key level where price has found strong support recently.

1st resistance: 2,568.26
Supporting reasons: Identified as an overlap resistance that aligns with a 61.8% 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 could potentially make a bearish reversal off this level to drop towards the 1st support.

Pivot: 70.54
Supporting reasons:  Identified as a pullback resistance that aligns close to a 23.6% Fibonacci retracement, suggesting a potential level where selling pressures could intensify.

1st support: 68.13
Supporting reasons: Identified as a multi-swing-low support, indicating a key level where price has found strong support recently.

1st resistance: 72.61
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off the pivot and drop to 1st support.

Pivot: 2504
Supporting reasons: Pullback resistance, aligned with the 50% Fibonacci Retracement, indicating a key level where price might face selling pressure.

1st support: 2477.49
Supporting reasons: An overlap support, indicating a potential level where price might find buying interest to prevent further declines.

1st resistance: 2526.68 Supporting reasons: multi swing high resistance, suggesting a key level where price may encounter resistance during an upward move.

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The post Tuesday 10th September 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

In dollar terms, China saw exports grew at a pace of 8.7% year-on-year in August. That’s the quickest since March last year. However, imports remain depressing and that arguably owes to a continued poor state in terms of domestic demand. Anyway, here’s the breakdown for those interested (h/t @ Reuters):

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

After the US jobs report last week, the big picture focus in markets is now on major central bank decisions. In particular, the Fed next week will be the most anticipated one. The odds for a 50 bps rate cut are now at ~29% and down from roughly a coin flip at one point last week. The Fed blackout period has begun, so it would be safe to assume that policymakers are comfortable with a 25 bps move at this stage.

The dollar is keeping steadier as such, with some calm permeating back through markets. The overblown fears surrounding the US labour market are ebbing, so that is perhaps helping. That alongside the Fed’s own calm demeanour I would say.

That will make for a bit of a pensive week as we await the FOMC meeting next week. The ECB is on the agenda on Thursday but there shouldn’t be any fireworks. A 25 bps rate cut is well orchestrated already. Besides that, we will have the latest US CPI report tomorrow. But hey, what is inflation data these days?

Looking to the session ahead, we do have UK labour market data to work with. But again, there is a large caveat attached to the data as seen last month here. So, I wouldn’t put too much emphasis into it. Other than that, there will just be some light data to move things along on the day.

0600 GMT – Germany August final CPI figures0600 GMT – UK July ILO unemployment rate, employment change0600 GMT – UK July average weekly earnings0600 GMT – UK August payrolls change1000 GMT – US August NFIB small business optimism index

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.

IC Markets Asia Fundamental Forecast | 10 September 2024

What happened in the U.S. session?

After falling by a whopping 6.6 points to -13.9 in August to mark the lowest level since January 2024, the Sentix Investor Confidence fell even further in September. This index notched its third consecutive month of decline as it hit -15.4 as the Euro Area economy remains under pressure and is threatening to tip into recession. The Euro fell under 1.1050 yesterday before hitting a low of 1.1030 during the U.S. session. Overhead pressures remain and the Euro is likely to drift lower today.

What does it mean for the Asia Session?

The dollar index (DXY) rose above 101.50 yesterday as demand for the greenback returned. After falling sharply since the beginning of July, this index stabilized around 101.20 on Monday before rebounding higher – it was trading around 101.70 this morning.

The Dollar Index (DXY)

Key news events today

FOMC Member Barr Speaks (2:00 pm GMT)

FOMC Member Bowman Speaks (4:15 pm GMT)

What can we expect from DXY today?

There are not one but two Federal Reserve Governors speaking today. Up first is Governor Michael Barr who will be speaking about Basel III at the Brookings Institution in Washington DC where audience are questions expected while Governor Michelle Bowman delivers her speech titled “The Future of Stress Testing and the Stress Capital Buffer Framework” at the Executive Council of the Banking Law Section of the Federal Bar Association in Arlington. Should either of them drop further dovish rhetoric, it could limit the recent gains seen in the dollar.

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

Medium Bullish

Gold (XAU)

Key news events today

FOMC Member Barr Speaks (2:00 pm GMT)

FOMC Member Bowman Speaks (4:15 pm GMT)

What can we expect from Gold today?

There are not one but two Federal Reserve Governors speaking today. Up first is Governor Michael Barr who will be speaking about Basel III at the Brookings Institution in Washington DC where audience are questions expected while Governor Michelle Bowman delivers her speech titled “The Future of Stress Testing and the Stress Capital Buffer Framework” at the Executive Council of the Banking Law Section of the Federal Bar Association in Arlington. Should either of them drop further dovish rhetoric, it could limit the recent gains seen in the dollar and potentially lift gold prices.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie dropped to an overnight low of 0.6644 as demand for the U.S. dollar returned. This currency pair was trading around 0.6655 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

Medium Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Higher demand for the greenback drove the Kiwi under 0.6150 overnight. This currency pair was trading around 0.6135 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

Medium Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Demand for the yen waned yesterday as USD/JPY rose as high as 143.79. This currency pair dipped under 143 during the U.S. session but it resumed the uptrend to trade around 143.50 as Asian markets came online – these are the support and resistance levels for today.

Support: 142.00

Resistance: 145.00

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 Bullish

The Euro (EUR)

Key news events today

Germany CPI (6:00 am GMT)

What can we expect from EUR today?

The final CPI print for the month of August for Germany is anticipated to show prices falling 0.1% MoM while the annualised reading is anticipated to slow from 2.3% YoY in July to 1.9% YoY. Inflationary pressures have dissipated steadily due to the depressed levels of manufacturing activity and it could cause the Euro to fall even further today.

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

Medium Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Demand for the dollar increased significantly causing USD/CHF to rise towards the 0.8500-level overnight. This currency pair was trading around 0.8495 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8390

Resistance: 0.8550

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

Medium Bullish

The Pound (GBP)

Key news events today

Labour Force Report (6:00 am GMT)

What can we expect from GBP today?

Claimant count change spiked in July as claims surged by 135K, way above the readings for May (51.9K) and June (36.2K) while the unemployment rate edged lower from 4.4% down to 4.2%. The estimate of 95.5K claims for August points to another elevated figure – should claims print higher than this forecast while the unemployment rate ticks higher, the Pound could face significant headwinds before the start of the European session.

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

Medium Bearish

The Canadian Dollar (CAD)

Key news events today

BoC Gov Macklem Speaks (12:10 pm GMT)

What can we expect from CAD today?

Following last week’s interest rate cut, Bank of Canada Governor Tiff MAcklem will be speaking at the Canada-United Kingdom Chamber of Commerce in London where he could shed further insights into the outlook on future monetary policy actions by this central bank. Demand for the greenback has picked up significantly since last Friday causing USD/CAD to surge past 1.3550 – any further dovish comments by Governor Macklem will likely lift his currency pair even higher.

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

OPEC Report (11:00 am GMT)

API Crude Oil Stock (2:30 pm GMT)

What can we expect from Oil today?

OPEC will release its monthly report for September where oil traders will receive the latest insights such as the current state of production and demand levels, and refinery operations for crude oil. There could even be clues on the proposed increase in production supply by OPEC+ and when it could come into effect. Later on, the API will release its update on the latest inventory levels in the U.S. which have drawn down quite strongly over the last couple of weeks – a third consecutive week of a higher-than-anticipated draw could function as a tailwind for crude oil.

Meanwhile, oil prices stabilized yesterday before climbing higher with WTI oil finding support around $68 per barrel. This benchmark gained 0.6% overnight and continued its ascend to rise above the $69-level as Asian markets came online this morning.

Next 24 Hours Bias

Weak Bullish

The post IC Markets Asia Fundamental Forecast | 10 September 2024 first appeared on IC Markets | Official Blog.

• Yuan-denominated exports +8.4% y/y
• Yuan-denominated imports 0% y/y
• Dollar-denominated exports +8.7% y/y
• Dollar-denominated imports +0.5% y/y

This compares to the July figures here. Looking to the specifics, China recorded a $33.8 billion surplus with the US for the month of August. As for year-to-date, that figure stands at $224.6 billion. Meanwhile, steel products exports were seen at 9.5 mil metric tonnes.

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