America’s Roundup: Dollar weakens as focus shifts to Fed meet next week ,Wall Street tumbles, Gold rises 1%, Oil prices hit 10-month high, gain 4% on weekly basis-September 16th,2023

Posted at 16 September 2023 / Categories Market Roundups

Market Roundup

•US Aug Export Price Index (MoM)  1.3%,0.4% forecast, 0.7% previous

•US Aug Import Price Index (MoM)  0.5%, 0.3% forecast, 0.4% previous

•US Sep NY Empire State Manufacturing Index 1.90,-10.00 forecast,-19.00 previous

•Canada Jul Foreign Securities Purchases 11.62B, 12.56B previous

•Canada Jul Foreign Securities Purchases by Canadians  2.61B, 14.44B previous

•Canada Jul Manufacturing Sales (MoM) 1.6%,0.7% forecast, -1.7% previous

•Canada New Motor Vehicle Sales (MoM) 147.4K,165.6K previous

•US Export Price Index (YoY) -5.5%,-7.8% previous

•US Import Price Index (YoY) -3.0%,-4.4% previous

•US Aug Industrial Production (YoY) 0.25%, -0.23% previous

•US Aug Manufacturing Production (MoM) 0.1%,0.1%forecast,0.5% previous

•US Capacity Utilization Rate  79.7%, 79.3% forecast,79.3% previous

•US  Aug Industrial Production (MoM ) 0.4%,0.1% forecast, 1.0% previous

•US Sep Michigan Consumer Sentiment  67.7,69.1 forecast,69.5 previous

•US Sep Michigan Inflation Expectations 3.1%,3.5% previous

•US Sep Michigan 5-Year Inflation Expectations  2.7%, 3.0% previous

•US Sep Michigan Consumer Expectations  66.3, 66.0 forecast,65.5 previous

•US Sep Michigan Current Conditions  69.8, 75.3 forecast,75.7 previous

•U.S. Baker Hughes Oil Rig Count 515,  513 previous

•  U.S. Baker Hughes Total Rig Count 641, 632 previous

Looking Ahead Economic Data(GMT)

•No data ahead

Looking Ahead Events And Other Releases(GMT)

•No significant events

Currencies Summaries

EUR/USD: The euro edged higher against dollar on Friday buoyed by hopes that the European Central Bank is ending its rate rise cycle and data that suggested China's wobbly economy may be regaining some momentum. The European Central Bank (ECB) hiked its key interest rate to a record 4% on Thursday and warned it would stay at that level until above-target inflation was dealt with. Also bolstering European investors' risk appetite on Friday, data showed Chinese gauges of retail sales and industrial output for August topped economists' expectations, though its property slump deepened, threatening to undercut a flurry of support measures. The euro rose 0.2% to $1.066, as it clawed its way off an overnight trough of $1.0632, the lowest level since March 20.Immediate resistance can be seen at 1.0707(5DMA), an upside break can trigger rise towards 1.0723(38.2%fib).On the downside, immediate support is seen at  1.0637(23.6%fib), a break below could take the pair towards 1.0592(Lower BB).

GBP/USD: The pound rose against the dollar on Friday as the greenback slipped and as traders looked ahead to the Bank of England's interest rate decision next week. Sterling has been one of the best performing currencies this year, up 2.8% against the dollar since the start of January. But it has fallen since mid-July as the UK labour market has weakened and the dollar has rebounded on the back of a relatively strong U.S. economy. The Bank of England will set interest rates next week and pricing in derivatives markets shows traders think it highly likely that policymakers will increase borrowing costs by 25 basis points to 5.5%. Sterling was up 0.18% against the dollar at $1.2433.Immediate resistance can be seen at 1.2454(5DMA), an upside break can trigger rise towards 1.2488(38.2%fib).On the downside, immediate support is seen at 1.2371 (23.6%fib), a break below could take the pair towards 1.2334(Lower BB). 

 USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Friday, but the currency held on to much of its weekly gain as oil prices rose and investors turned attention to domestic inflation data. The price of oil, one of Canada’s major exports, settled 0.6% higher at $90.77 a barrel, notching a 10-month high, as supply tightness spearheaded by Saudi Arabian production cuts combined with optimism around Chinese demand to lift crude. Canada’s consumer price index report, due on Tuesday, economists expect inflation rising to an annual rate of 3.8% in August from 3.3% in July. The loonie was trading 0.1% lower at 1.3515 to the greenback, after trading in a range of 1.3495 to 1.3549. For the week, it was up 0.9%, its biggest weekly advance since June. Immediate resistance can be seen at 1.3539(5 DMA), an upside break can trigger rise towards 1.3573 (23.6% fib).On the downside, immediate support is seen at 1.3499 (38.2%fib), a break below could take the pair towards 1.3451(Lower BB).

USD/JPY: The dollar strengthened to hit 10-month high against Japanese yen on Friday as investors focus turned to next week's US monetary policy meeting. Economic indicators this week have cemented expectations that the Federal Reserve will leave its key interest rate unchanged at the conclusion of next week's monetary policy meeting, and fueled hopes that the central bank's tightening cycle might have run its course. Financial markets have priced in a 97% likelihood that the central bank will hold the Fed funds target rate at 5.25%-5.00% when it announces its decision next Wednesday, and a 68.5% likelihood of it doing the same at the conclusion of its November meeting, according to CME's FedWatch tool.  The dollar was last up 0.25% at 147.84 yen after hitting a 10-month high of 147.96. Strong resistance can be seen at 147.84(23.66%fib) an upside break can trigger rise towards 148.43 ( Higher BB).On the downside, immediate support is seen 147.23 (5DMA), a break below could take the pair towards 146.4000(38.2%fib).

Equities Recap

European shares marked weekly gains on Friday, as better-than-expected Chinese data lifted luxury firms while investors took comfort from signs that the European Central Bank (ECB) is nearly done raising interest rates.

UK's benchmark FTSE 100 closed down by 0.50 percent, Germany's Dax ended up by 0.56 percent, France’s CAC finished the day up by 0. 96 percent.

U.S. stocks ended sharply lower on Friday as plunging chip stocks and mixed economic data dampened investors' risk appetite, providing a downbeat ending to a tumultuous week.

Dow Jones closed down by 0.83 percent, S&P 500 ended down by 1.22 percent, Nasdaq finished the day down by 1.56 percent.

Treasuries Recap

Treasuries yields edged higher on Friday, with the two-year above the 5% threshold, as futures price in higher rates for longer ahead of a Federal Reserve policy meeting next week that faces a strong U.S. economy with inflation that's still above target.

The yield on the 30-year Treasury bond   rose 1.9 basis points to 4.405%.The 10-year TIPS breakeven rate   was last at 2.346%, indicating the market sees inflation averaging just above 2.3% a year for the next decade.

Commodities Recap

Gold jumped 1% on Friday, helped by a weaker dollar and safe-haven buying after United Auto Workers union kicked of strikes at three automakers in Detroit, while hopes around a likely pause in U.S. interest-rate hikes lent further support.

Spot gold was up 0.7% at $1,924.27 per ounce by 1:56 p.m. EDT (1756 GMT). Bullion has risen 0.3% so far this week.U.S. gold futures settled 0.7% higher at $1,946.2 per ounce.

Oil prices hit a 10-month high on Friday and posted a third weekly gain as supply tightness spearheaded by Saudi Arabian production cuts combined with optimism around Chinese demand to lift crude.

Brent crude futures rose 23 cents, or 0.3%, to settle at $93.93 a barrel, while U.S. West Texas Intermediate futures was up 61 cents, or 0.7%, to close at $90.77 a barrel. Both contracts traded at 10-month highs on Tuesday for the fifth consecutive session, and gained about 4% on a weekly basis.

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