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FX markets stay quiet ahead of US data

Arnaud Masset

Market Brief

G10 Advancers and Decliners vs USD
JPY 0.21
NZD 0.11
GBP 0.09
CAD 0.08
AUD 0.07
CHF -0.10
SEK -0.13
DKK -0.18
EUR -0.19
NOK -0.19
Global Indexes Current Level % Change
Nikkei 225 Index 17645.11 -1.32
Shanghai Index 3095.42 0.1
FTSE futures 6057.5 -0.44
DAX futures 9621 -0.87
CAC futures 4435 -0.78
SMI Futures 8416 -1.03
S&P future 1923.8 0.24
Global Indexes Current Level % Change
Gold 1142.52 -0.34
Silver 15.01 -0.67
VIX 23.62 0.64
Crude wti 45.25 -0.98
USD Index 96.34 0.07

After a quiet week due to a relatively light economic calendar, we are facing into a big week of economic data. The market has had plenty of time to digest the decision by the Federal Reserve to keep the federal fund rate unchanged and took into account hawkish comments from various Fed members. Over the week, the greenback appreciated versus all G10 currencies, without exception. We are starting the week with the Fed’s favourite measure of inflation: the personal consumption expenditure. We'll also get personal income and spending as well as pending home sales and the Dallas manufacturing activity index. S&P/CaseShiller index and consumer confidence are due tomorrow while ADP employment change and the Chicago purchasing manager barometer will be released on Wednesday. On Thursday, we’ll get jobless claims, Markit manufacturing PMI and ISM manufacturing index. Finally, September’s job report will be released on Friday and will capture all the market’s attention as traders try to assess the likely timing of a first rate hike after Federal Reserve officials made very clear they are still committed to raising rates this year.

In Asia this morning, the USD consolidated previous gains in thin market conditions as Taiwan, Hong Kong and South Korea are closed due to public holiday. Data from China this morning showed that industrial profit contracted 8.8%y/y in August after falling 2.9% in the previous month. The Shanghai Composite is up 0.10% while its tech-heavy counterpart, the Shenzhen Composite is also trading in positive territory, up 1.86%.

Japanese shares continue to head lower, unable to reverse negative momentum. The Nikkei is down 1.32%, while the Topix index fell 1.04%. In the FX market, USD/JPY moved slightly lower in Tokyo but remained in its 118.61-121.75 range. Similarly, AUD/USD was treading water around 0.7020. The Aussie will find support at 0.6986 (low from September 6th), while a resistance can be found at 0.7440 (high from August 11th).

In Europe, futures are pointing towards a negative opening with the Footsie down 0.44%, the CAC 40 down 0.78%, the DAX down -0.87% and the SMI down -1.03%. EUR/USD is approaching a key area as the 50dma is about to cross the 200dma to the upside. On the downside, a support can be found at 1.1087 (low from September 3rd), while on the upside, the closest resistance lies at 1.1296 (high from September 24th).

Besides economic data from the US, traders will be watching trade balance retail sales from Sweden; consumer confidence and business confidence from Italy; capacity utilization from Turkey; federal total debt and weekly trade balance from Brazil.

 

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Today's Calendar Estimates Previous Country / GMT
SZ sept..25 Total Sight Deposits - 464.9b CHF / 07:00
SZ sept..25 Domestic Sight Deposits - 402.2b CHF / 07:00
UK Bank of England Deputy Governor Jon Cunliffe Speaks - - GBP / 07:00
SW Aug Trade Balance - 0.3b SEK / 07:30
SW Aug Retail Sales MoM 0.10% 0.50% SEK / 07:30
SW Aug Retail Sales NSA YoY 3.70% 5.90% SEK / 07:30
IT Sep Consumer Confidence Index 108.7 109 EUR / 08:00
IT Sep Business Confidence 102.7 102.5 EUR / 08:00
IT Sep Economic Sentiment - 103.7 EUR / 08:00
EC ECB Executive Board Member Lautenschläger Speaks in Milan - - EUR / 08:00
BZ Central Bank Weekly Economists Survey - - BRL / 11:25
TU Sep Real Sector Confidence SA - 103 TRY / 11:30
TU Sep Real Sector Confidence NSA - 103.7 TRY / 11:30
TU Sep Capacity Utilization - 74.80% TRY / 11:30
US Fed's Dudley Speaks on Monetary Policy in New York - - USD / 12:30
US Aug Personal Income 0.40% 0.40% USD / 12:30
US Aug Personal Spending 0.30% 0.30% USD / 12:30
US Aug Real Personal Spending 0.40% 0.20% USD / 12:30
US Aug PCE Deflator MoM 0.00% 0.10% USD / 12:30
US Aug PCE Deflator YoY 0.30% 0.30% USD / 12:30
US Aug PCE Core MoM 0.10% 0.10% USD / 12:30
US Aug PCE Core YoY 1.30% 1.20% USD / 12:30
CA sept..25 Bloomberg Nanos Confidence - 53.2 CAD / 14:00
US Aug Pending Home Sales MoM 0.40% 0.50% USD / 14:00
US Aug Pending Home Sales NSA YoY 8.00% 7.20% USD / 14:00
US Sep Dallas Fed Manf. Activity -10 -15.8 USD / 14:30
BZ Aug Federal Debt Total - 2604b BRL / 17:00
US Fed's Evans Speaks on Monetary Policy in Milwaukee - - USD / 17:30
BZ sept..27 Trade Balance Weekly - $352m BRL / 18:00
US Fed's Williams speaks at UCLA on Economic Outlook - - USD / 21:00
CH Aug Leading Index - 98.7 CNY / 22:00
IN Aug Eight Infrastructure Industries - 1.10% INR / 22:00
Currency Tech
EURUSD
R 2: 1.1561
R 1: 1.1330
CURRENT: 1.1173
S 1: 1.1017
S 2: 1.0809

GBPUSD
R 2: 1.5659
R 1: 1.5383
CURRENT: 1.5195
S 1: 1.5136
S 2: 1.5089

USDJPY
R 2: 125.86
R 1: 121.75
CURRENT: 120.34
S 1: 118.61
S 2: 116.18

USDCHF
R 2: 1.0240
R 1: 0.9903
CURRENT: 0.9806
S 1: 0.9513
S 2: 0.9259
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