America’s Roundup: Dollar eases from one-year high after US inflation data, Wall Street ends higher, Gold jumps 2% ,Oil eases on profit taking, demand jitters; stays near highest in years-October 14th,2021

Posted at 14 October 2021 / Categories Market Roundups

Market Roundup

•US Sep Real Earnings (MoM) 0.8%, 0.3% previous

• US Sep CPI Index, s.a 274.14, 273.01 previous

• US Sep CPI, n.s.a (MoM)  0.27%,0.21% previous

• US Sep Core CPI (MoM) 0.2%, 0.2% forecast, 0.1% previous

• US Sep Core CPI (YoY)  4.0%,4.0% forecast, 4.0% previous

• US Sep CPI (MoM)  0.4%,0.3% forecast, 0.3% previous

• US Cleveland Sep CPI (MoM) 0.5%,0.3% previous

Looking Ahead Economic Data (GMT)

• 00:30 Australia Sep  Participation Rate 64.7% forecast, 65.2% previous

• 00:30 Australia Sep Unemployment Rate  4.8% forecast, 4.5% previous

• 00:30 Australia Sep Employment Change  -137.5K forecast, -146.3K previous

• 00:30 Australia Sep Full Employment Change  -68.0K previous

• 01:30 China Sep CPI (MoM) 0.3% forecast,0.1% previous

• 01:30 China Sep PPI (YoY) 10.5% forecast, 9.5% previous

• 01:30 China Sep CPI (YoY) 0.9% forecast, 0.8% previous

• 04:30 Japan Aug Capacity Utilization (MoM)  -3.4% previous

• 04:30 Japan Aug Industrial Production (MoM)  -3.2% previous

Looking Ahead - Events, Other Releases (GMT)

•No significant events

Currency Summaries

EUR/USD: The euro rose on Wednesday as dollar took a breather after U.S. inflation data. U.S. consumer prices increased solidly in September as Americans paid more for food, rent and a range of other goods, putting pressure on the Biden administration to urgently resolve strained supply chains, which are hampering economic growth. The consumer price index rose 0.4% last month after climbing 0.3% in August. Food prices jumped 0.9% after increasing 0.4% in the prior month. The largest rise in food prices since April 2020 was driven by a surge in the cost of meat. The euro was up 0.56% at $1.15945, rebounding from its nearly 15-month low of $1.1522 hit in the previous session. Immediate resistance can be seen at 1.1608 (50%fib), an upside break can trigger rise towards 1.1642(61.8%fib).On the downside, immediate support is seen at 1.1580 (38.2%fib), a break below could take the pair towards 1.1538 (23.6%fib).

GBP/USD: Sterling edged higher on Wednesday as traders assessed that data showing the British economy grew slightly below consensus in August was not enough to dent expectations the Bank of England will increase interest rates.Britain's economy grew 0.4% in August, leaving it just 0.8% smaller than it was in February 2020, the Office for National Statistics said. Economists polled by Reuters had forecast monthly gross domestic product growth of 0.5% for August. At 21:00 GMT, the pound was up 0.4% at $1.3665, not far from a two-week high touched on Monday. Immediate resistance can be seen at 1.3681(30DMA), an upside break can trigger rise towards 1.3714(50%fib).On the downside, immediate support is seen at 1.3643(38.2%fib), a break below could take the pair towards 1.3558(23.6%fib).

USD/CAD: The Canadian dollar edged higher against its U.S. counterpart on Wednesday but gains were capped ahead of a 2-month high that was notched the day before, as oil prices fell and investors weighed data showing a faster rate of U.S. inflation. The price of oil, one of Canada's major exports, fell as expectations grew that oil demand growth will fall as inflation and supply chain issues strain major economies. On Tuesday, the currency touched its strongest level since July 30 at 1.2430 as the gap widened between Canadian and U.S. bond yields. The loonie was trading 0.1% higher at 1.2441 to the greenback , after trading in a range of 1.2436 to 1.2478. Immediate resistance can be seen at 1.2460(5DMA), an upside break can trigger rise towards 1.2496 (38.2%fib).On the downside, immediate support is seen at 1.2430(23.6%fib), a break below could take the pair towards 1.2386(Lower BB).

USD/JPY: The dollar dipped against yen on Wednesday as longer-dated Treasury yields dipped after U.S. inflation data showed prices rose solidly last month, while the minutes from the Federal Reserve's September meeting confirm tapering will begin soon.The consumer price index rose 0.4% last month versus a 0.3% rise anticipated by economists. Year-over-year, the CPI increased 5.4%, up from 5.3% in August. Excluding the volatile food and energy components, the so-called core CPI climbed 0.2% last month versus 0.1% in August. The greenback initially moved higher after the CPI data, touching a nearly three-year high versus the Japanese yen , before edging lower along with the longer-dated bond yields. Strong resistance can be seen at 113.79(23.6%fib), an upside break can trigger rise towards 114.00(Psychological level).On the downside, immediate support is seen at 113.22(38.2%fib), a break below could take the pair towards 112.80(50%fib).

Equities Recap

European stocks rose on Wednesday as upbeat earnings forecast from German software group SAP and robust quarterly sales for French luxury goods maker LVMH helped soothe worries about inflation.

UK's benchmark FTSE 100 closed up by 0.16 percent, Germany's Dax ended up by 0.68 percent, France’s CAC finished the day up by 0.75percent.

Wall Street rose on Wednesday in choppy trade as investors saw an imminent end to ultra-loose U.S. monetary policy as a vote of confidence in the economy, while two-year Treasury yields hit 18-month highs on bets that policy tightening is in the offing.

 Dow Jones ended   down by 0.00 percent, S&P 500 ended up by 0.30 percent, Nasdaq ended the day up by 0.73 percent.

Treasuries Recap

Yields on shorter-term U.S. Treasuries rose on Wednesday, while longer-dated yields dipped following data on consumer prices that further fanned concerns inflation will continue to climb and force the Federal Reserve to take action.

The yield on the two-year Treasury note, which typically moves in step with interest rate expectations, was up 1.6 basis points to 0.364% after reaching a high of 0.394%, its highest since March 24, 2020.

The three-year note yield was up 1.6 basis points to 0.657% after climbing to 0.701%, its highest since March 5, 2020.

Commodities Recap

Gold prices rose 2% to a near one-month peak on Wednesday, as a pullback in the dollar and U.S. Treasury yields lifted demand for the safe-haven metal.

Spot gold was up 1.8% at $1,791.41 per ounce by 2:13 p.m. ET (1813 GMT). U.S. gold futures settled 2% higher at $1,794.70.

Oil prices eased on Wednesday on worries that crude demand growth would slow, which ate into recent gains that had brought prices to multi-year highs in recent sessions.

Brent futures fell 24 cents, or 0.3%, to settle at $83.18 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 20 cents, or 0.3%, to $80.44.

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