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Morning Market Review for 11.04.2025

By LiteFinance
The European currency shows uncertain growth in the EUR/USD pair during the Asian session, testing 1.1260 for a breakout. Investors are focusing on inflation statistics from Germany: as expected, the Harmonized CPI in March stood at 2.3% year-on-year and 0.4% month-on-month, while the CPI rose 2.2% and 0.3%, respectively, which is unlikely to have a significant impact on future decisions by the European Central Bank (ECB).

Morning Market Review for 09.04.2025

By LiteFinance
The European currency is showing confident growth in the EUR/USD pair during the Asian session, developing the upward signal formed at the beginning of the week. The instrument is testing 1.1060 for a breakout, while investors are analyzing the first reactions of world leaders to the introduction of import duties by the United States. Last week, President Donald Trump announced tariffs in addition to taxes on imported steel, aluminum and a range of other goods. Separately, the White House administration imposed a 25.0% tariff on imported passenger cars.

Morning Market Review for 03.04.2025

By LiteFinance
EUR/USD The European currency is showing a significant growth in the EUR/USD pair during the Asian session, developing a strong "bullish" momentum formed the day before. The instrument is testing 1.0950 for a breakout, updating local highs from March 18. The euro is receiving significant support from the fall of the American currency amid the introduction of new import duties by the United States.

Morning Market Review for 18.03.2025

By LiteFinance
The euro has been mixed in the EUR/USD pair during the Asian session, consolidating near 1.0910. The day before, the instrument once again demonstrated quite active growth, but was unable to update the local highs formed last week.

Morning Market Review for 11.03.2025

By LiteFinance
EUR/USD The European currency is relatively stable in the EUR/USD pair during trading in the Asian session. The instrument is consolidating near local highs, while market participants are waiting for new drivers to emerge. Tomorrow, at 14:30 (GMT+2), investors will pay attention to the US inflation report for February: analysts expect a further slowdown in the Consumer Price Index from 3.0% to 2.9% year-on-year and from 0.5% to 0.3% month-on-month, while the Core CPI excluding Food and Energy may decline from 3.3% to 3.2% and from 0.4% to 0.3%, respectively, which will favorably affect expectations regarding further interest rate cuts by the US Federal Reserve. However, markets are somewhat concerned about the possibility of inflation accelerating as the trade wars develop. In particular, this month, the introduction of new tariffs from the administration of President Donald Trump against the EU, as well as on all imports of steel and aluminum, cannot be ruled out. The single currency received some support the day before from January data on Industrial Production in Germany, which showed a 2.0% increase in monthly terms after –1.5% in the previous month, with a forecast of 1.5%, while in annual terms the negative dynamics slowed from –2.2% to –1.6%. In addition, the euro is strengthening against the backdrop of the European Commission's large-scale plans to re-arm the EU, as well as after the German authorities announced the creation of a special fund in the amount of 500.0 billion euros, the funds from which should be used for the modernization of infrastructure and investments in the defense sector. GBP/USD The British pound is losing value in the GBP/USD pair during the Asian session, consolidating near 1.2870. Market activity remains subdued as traders await new drivers of movement. Tomorrow, at 14:30 (GMT+2), investors will be assessing macroeconomic statistics on inflation: the Core Consumer Price Index in February is expected to slow from 3.3% to 3.2% year-on-year and from 0.4% to 0.3% month-on-month, while the CPI is expected to decline from 3.0% to 2.9% and from 0.5% to 0.3%, respectively. If the actual dynamics turn out to be close to the forecasts, the American currency is unlikely to react significantly to this data, but investors are closely monitoring the prospects for a reduction in the US Federal Reserve interest rate. Markets are not ruling out the possibility of three 25-basis-point adjustments to the indicator now, while last week only two adjustments were expected. Meanwhile, some pressure on the pound's position is being exerted by data on the dynamics of Retail Sales in the UK: the February figure from the British Retail Consortium (BRC) slowed sharply from 2.5% to 0.9%, while analysts had expected 2.4%. On Friday, at 09:00 (GMT+2), January statistics on Gross Domestic Product and Industrial Production will be presented. Forecasts suggest that the monthly growth rate of the UK economy will slow from 0.4% to 0.1%, while Industrial Production will contract by 0.1% after increasing by 0.5% in the previous month, and in annual terms it may increase from –1.9% to –0.8%. AUD/USD The Australian dollar is showing a moderate decline in the AUD/USD pair during the Asian session, developing an uncertain "bearish" trend that has been trying to form since the end of last week. The instrument is testing 0.6260 for a breakdown in anticipation of the emergence of new drivers. Tomorrow, at 14:30 (GMT+2), the US consumer inflation report will be published: analysts expect a further slowdown in the Consumer Price Index from 3.0% to 2.9% year-on-year and from 0.5% to 0.3% month-on-month, while the Core CPI excluding Food and Energy may adjust from 3.3% to 3.2% and from 0.4% to 0.3%, respectively. This could have a positive impact on expectations for further reduction in borrowing costs by the US Federal Reserve. At the same time, markets are somewhat concerned about the possible acceleration of price growth in the future as the "trade wars" develop. In particular, new tariffs from the White House administration, previously announced, cannot be ruled out this month. Thus, duties on goods from the EU, as well as on all imports of steel and aluminum into the US may come into effect. The macroeconomic statistics from Australia published the day before do not provide any noticeable support to the instrument: Westpac Consumer Confidence in March increased from 0.1% to 4.0%, the National Australia Bank Business Conditions Index in February increased from 3.0 points to 4.0 points, and the National Australia Bank Business Confidence indicator fell from 5.0 points (revised from 4.0 points) to –1.0 points. USD/JPY The US dollar is showing an uncertain decline in the USD/JPY pair in Asian trading, developing a stable downward trend formed in the short-term and medium-term. The instrument is testing 146.90 for a breakdown, having managed to update the local lows of October 4, 2024. Pressure on the position of the American currency is being exerted by concerns about the state of the national economy and the possible acceleration of inflation in the country as the global trade situation worsens. This week, the United States imposed tariffs on imports from Canada and Mexico, and also increased tariffs on a range of goods from China. By the end of March, additional trade restrictions against the EU are likely to be introduced, as well as global ones on the import of steel and aluminum. In addition, the US labor market report published on Friday put some pressure on the dollar: thus, Nonfarm Payrolls in February increased from 125.0 thousand to 151.0 thousand, while analysts expected 160.0 thousand, Average Hourly Earnings in annual terms accelerated from 3.9% to 4.0% with a forecast of 4.1%, and in monthly terms — slowed from 0.4% to 0.3%, and the Unemployment Rate adjusted from 4.0% to 4.1%. Meanwhile, statistics from Japan are currently preventing the yen from growing more actively: the data on Gross Domestic Product (GDP) showed an annual growth rate of only 2.2% in the fourth quarter of 2024, while the preliminary estimate published in February of this year suggested an increase of 2.8%, and in quarterly terms the indicator was also adjusted from 0.7% to 0.6%. In addition, Overall Household Spending slowed to 0.8% in January from 2.7%, contrary to the forecast of 3.6%. XAU/USD The XAU/USD pair is showing weak growth during the morning session, recovering from a moderate decline the day before. The instrument is once again preparing to test 2900.00 for a breakout, while the US dollar's positions remain vulnerable amid concerns about the state and prospects of the national economy. Investors are also concerned about a possible pickup in inflation as President Donald Trump imposes new tariffs on goods from the EU, for example, as well as on steel and aluminum imports, causing market participants to revise their forecasts for the prospects for the US Federal Reserve to lower borrowing costs in 2025. Market quotes on Friday showed investors were already counting on three 25-basis-point rate adjustments, up from just two earlier last week. The report on the US labor market also did not provide significant support to the dollar: thus, Nonfarm Payrolls in February increased from 125.0 thousand to 151.0 thousand, while analysts expected 160.0 thousand, Average Hourly Earnings in annual terms accelerated from 3.9% to 4.0% with a forecast of 4.1%, and in monthly terms — slowed from 0.4% to 0.3%, and the Unemployment Rate adjusted from 4.0% to 4.1%. Tomorrow, at 14:30 (GMT+2), investors will be assessing macroeconomic statistics on inflation: the Core Consumer Price Index in February is expected to slow from 3.3% to 3.2% year-on-year and from 0.4% to 0.3% month-on-month, while the CPI is expected to decline from 3.0% to 2.9% and from 0.5% to 0.3%, respectively.

Morning Market Review for 04.03.2025

By LiteFinance
The European currency is showing a slight decline in the EUR/USD pair during the Asian session, correcting after a noticeable rise the day before, which allowed the instrument to quickly recover some of the losses incurred last week.

Morning Market Review for 27.02.2025

By LiteFinance
EUR/USD The European currency shows a moderate decline in the EUR/USD pair during the Asian session, developing the “bearish” impulse formed yesterday, when quotes managed to update local highs from January 27: the instrument is testing the 1.0465 mark for a breakdown, while traders are waiting for new drivers of movement.

Morning Market Review for 11.02.2025

By LiteFinance
EUR/USD The European currency is mixed in the EUR/USD pair during the Asian session, holding near 1.0300. The instrument managed to show growth the day before, but the euro only updated the local lows of February 4. Investors are reluctant to open new trading positions ahead of US Federal Reserve Chairman Jerome Powell's testimony to Congress at 17:00 (GMT+2) today, which is currently expected to touch on the topic of lower borrowing costs in 2025. Analysts are currently expecting only two 25-basis-point rate adjustments in the second half of the year, while President Donald Trump is pushing for more aggressive rate cuts. Tomorrow, at 15:30 (GMT+2), inflation data will be presented in the US, which may influence the decisions of monetary authorities: analysts expect the Core CPI excluding Food and Energy to accelerate to 0.3% from 0.2% in January, and to slow to 3.1% from 3.2% on an annual basis, while the broader measure is likely to adjust from 0.4% to 0.3% and to consolidate at 2.9%, respectively. In turn, in the eurozone, on Thursday, at 12:00 (GMT+2), December data on Industrial Production will be released: according to forecasts, the monthly indicator will decrease by 0.6% after increasing by 0.2% the month before, and in annual terms — by 3.1% after –1.9%. On Friday, at 12:00, (GMT+2), statistics on Gross Domestic Product (GDP) for the fourth quarter of 2024 will hit the market: analysts do not expect a change in the previous dynamics at 0.0% on a quarterly basis and 0.9% on an annual basis. GBP/USD The British pound is slightly lower in the GBP/USD pair during the morning session, consolidating near 1.2360 and local lows from February 3. Market activity remains subdued as traders await the emergence of new drivers for price movements and closely monitor the rhetoric of US President Donald Trump. In particular, this week, 25.0% tariffs were imposed on all steel and aluminum imports into the country — a step the American leader resorted to during his first term, but then the duties did not last long enough, since Joe Biden replaced him as president. In addition, protective measures were also announced midweek to achieve sustainable trade surpluses with all key US partners. In turn, the UK hopes to secure an exception for its steel industry, since otherwise it could lead to significant losses for the national economy. Tomorrow at 15:30 (GMT+2) January inflation statistics will be published, which may affect the monetary policy of the US Federal Reserve: forecasts suggest a slowdown in the monthly dynamics of the Consumer Price Index from 0.4% to 0.3%, and in annual terms the indicator is expected to remain at the previous level of 2.9%, while Core CPI is likely to adjust from 3.2% to 3.1% in annual terms and from 0.2% to 0.3% in monthly terms. On Thursday, at 09:00 (GMT+2), the UK will release data on Gross Domestic Product (GDP) for the fourth quarter of 2024 and for December: analysts expect the national economy to accelerate in annual terms from 0.9% to 1.1%, while in quarterly terms a decrease of 0.1% is expected after zero dynamics in the previous period, and in December the indicator may add another 0.1%. AUD/USD The Australian dollar has seen mixed performance in the AUD/USD pair during the Asian session, holding near 0.6275. The day before, the instrument demonstrated quite noticeable growth, but now the "bullish" momentum has noticeably weakened, while traders are expecting the emergence of new drivers for price movements. Today, there will be speeches by representatives of the US Federal Reserve, including a speech by the Chair of the US regulator, Jerome Powell, in Congress, and another speech by the official is expected tomorrow. On Wednesday, at 15:30 (GMT+2), the market will see January inflation data in the US, and at 21:00 (GMT+2) — the Monthly Budget Statement. Analysts expect the core cpi excluding food and energy to accelerate to 0.3% from 0.2% in january, and to slow to 3.1% from 3.2% on an annual basis, while the broader measure is likely to adjust from 0.4% to 0.3% and to consolidate at 2.9%, respectively. The US budget deficit in January could decrease from –87.0 billion dollars to –47.6 billion dollars, which will provide additional support to the American currency. The macroeconomic statistics from Australia presented today failed to provide significant support to the instrument: the Consumer Confidence index from Westpac Banking Corp. in February added 0.1% after –0.7% in the previous month, the Business Confidence index from the National Australia Bank in January rose from –2.0 points to 4.0 points, and the Business Conditions index, on the contrary, slowed from 6.0 points to 3.0 points. USD/JPY The US dollar is showing mixed dynamics in the USD/JPY pair, consolidating near 152.00. Investors are in no hurry to open new positions, waiting for clarification of the White House's tariff policy and preparing for the emergence of new drivers of price movements. Tomorrow, at 15:30 (GMT+2), inflation data will be presented, which may influence the decisions of monetary authorities: analysts expect the Core CPI excluding Food and Energy to accelerate to 0.3% from 0.2% in January, and to slow to 3.1% from 3.2% on an annual basis, while the broader measure is likely to adjust from 0.4% to 0.3% and to consolidate at 2.9%, respectively. Meanwhile, some pressure on the yen's position at the beginning of the week was exerted by macroeconomic statistics from Japan, where Bank Lending volumes in January added another 3.0%, while experts expected 3.1%, the Current Situation index from Eco Watchers fell from 49.0 points to 48.6 points with preliminary estimates of 49.7 points, and the Eco Watchers Outlook fell from 49.4 points to 48.0 points. Investors also noted a significant decline in the seasonally adjusted balance of payments in December from 3352.5 billion yen to 1077.3 billion yen, which was worse than market expectations of 1362.0 billion yen. However, the yen continues to enjoy some support as a safe-haven currency given that markets are extremely concerned about a possible deterioration in global trading conditions. US President Donald Trump has imposed 25.0% tariffs on all steel and aluminum imports, and has also announced retaliatory measures for all partners who impose duties on American goods, which was a completely expected step, since the politician had already resorted to it during his first presidential term. However, it can be noted that the restrictions are now more global in nature and more systemic, although some experts believe that this is only a tool of pressure in the upcoming negotiations. XAU/USD The XAU/USD pair shows a moderate increase during the Asian session, testing 2915.00 for a breakout. The instrument retreated from new record highs, updated on Tuesday morning, located near the level of 2940.00. Market activity remains fairly high as traders remain concerned about Donald Trump's aggressive import tariff policies. In particular, a decree was signed introducing duties on steel and aluminum in the amount of 25.0% in addition to the existing ones. In his first term, the head of the White House also initiated similar tariffs: in 2018, 25.0% taxes were imposed on steel imports and 10.0% on aluminum from all countries except Canada and Mexico, which were later repealed. Then they were justified by issues of national security, but this time the politician referred to the creation of jobs and the reduction of the trade deficit. In addition, the American leader announced the introduction of retaliatory tariffs in the middle of this week in order to achieve a sustainable trade surplus with all key US partners. Today, at 17:00 (GMT+2), traders will pay attention to the speech of the US Federal Reserve Chairman Jerome Powell in Congress, as well as other representatives of the American regulator, among whom we can note Michelle Bowman and John Williams. Tomorrow at 15:30 (GMT+2) January inflation statistics will be published, which may affect the monetary policy of the US Federal Reserve: forecasts suggest a slowdown in the monthly dynamics of the Consumer Price Index from 0.4% to 0.3%, and in annual terms the indicator is expected to remain at the previous level of 2.9%, while Core CPI is likely to adjust from 3.2% to 3.1% in annual terms and from 0.2% to 0.3% in monthly terms.

Morning Market Review for 05.02.2025

By LiteFinance
EUR/USD The euro has been mixed in the EUR/USD pair during the Asian session, consolidating near 1.0380. The currency has been actively increasing in value over the past two days, but has now only reached Friday's levels, which is due to a sharp "bearish" gap at the opening of trading this week. Investors are focusing on the January block of macroeconomic statistics on business activity in the eurozone from S&P Global today: forecasts suggest that the PMI in the German services sector will remain at the previous level of 52.5 points, and the Services PMI for the eurozone as a whole may be fixed at 51.4 points. In Italy, a slight decrease in the indicator is expected from 50.7 points to 50.5 points. At 12:00 (GMT+2), December data on producer price indices will be published: analysts expect that the monthly growth rate of the indicator in the eurozone will slow sharply from 1.6% to 0.4%, and the annual figure will rise from –1.2% to –0.1%. Today, at 17:00 (GMT+2), the US market will receive January business activity statistics: the S&P Global index in the services sector is expected to remain at 52.8 points, while the similar indicator from the Institute for Supply Management (ISM) may be adjusted from 54.1 points to 54.3 points. Also, in focus at 15:15 (GMT+2) will be the Automatic Data Processing (ADP) report on private sector employment, which is expected to rise from 122.0 thousand to 150.0 thousand, ahead of the final labor market statistics on Friday, February 7. Nonfarm Payrolls is expected to decline from 256.0 thousand to 170.0 thousand, and Average Hourly Earnings are expected to decline from 3.9% to 3.8% year-on-year, while the Unemployment Rate is expected to remain at 4.1%. GBP/USD The British pound is trading with near-zero dynamics in the GBP/USD pair during the morning session, consolidating near 1.2470 and local highs from January 28. Market activity is gradually easing towards the middle of the week as the situation around higher import duties imposed by US President Donald Trump stabilises. Tariffs of 25.0% on goods from Mexico and Canada went into effect on February 1. Later, however, the White House agreed to delay the implementation of these measures for one month, as Canada promised to strengthen the border with the United States, and Mexico agreed to a project to send an additional 10,000 troops to protect the border from illegal migration and the transportation of prohibited substances. Instead, Trump's focus has shifted to EU goods. At the same time, European leaders declared their readiness to defend their trade interests and give a symmetrical response to American tariffs. Investors are currently focusing on business activity statistics in the US and UK services sectors, with forecasts not suggesting any changes in the figures from previous values. The UK S&P Global Services PMI is expected to come in at 51.2 points, while the US one is expected to come in at 52.8 points. At 15:15 (GMT+2), the market will receive a report from Automatic Data Processing (ADP) on the level of employment in the private sector: forecasts suggest a moderate increase in employment from 122.0 thousand to 150.0 thousand, which could slightly strengthen the position of the American currency. Tomorrow, investors will be assessing the Bank of England's interest rate decision, which will be announced at 14:00 (GMT+2). Markets are almost certain of a 25-basis-point cut to 4.50%, given progress in easing inflationary pressures and the speed of the UK economy's slowdown. NZD/USD The NZD/USD pair is showing minor gains during the Asian session, extending the "bullish" momentum of the last two trading days. The instrument is testing 0.5660 for a breakout, while traders are awaiting the publication of January statistics on the US labor market. They are also closely monitoring the developments around increased import duties from the United States. Tariffs of 25.0% on goods from Mexico and Canada went into effect on February 1. Later, however, the White House agreed to delay the implementation of the measures for one month as a result of preliminary agreements. However, products from China are subject to 10.0% taxes in addition to the existing tariffs. Investors are focusing on the New Zealand labour market statistics for the fourth quarter of 2024 today: the Unemployment Rate rose sharply from 4.8% to 5.1%, the Employment Change fell by 0.1% after –0.5% in the previous period, while analysts expected –0.2%, and the Labour Cost Index slowed from 3.4% to 2.9% in annual terms with a forecast of 3.0% and remained at the same level of 0.6% in the quarterly terms. Some pressure on the New Zealand dollar was exerted by macroeconomic data from China, where the Caixin Services PMI fell from 52.2 points to 51.0 points in January, compared to preliminary estimates of 52.3 points. USD/JPY The US dollar is showing a moderate decline in the USD/JPY pair during Asian trading, testing 153.40 for a breakdown and updating local lows from December 13. The instrument did not show active growth at the beginning of the week, as was observed in other currency pairs, in response to the introduction by US President Donald Trump of increased import duties on goods from China, Mexico and Canada. This suggests that markets still view the yen as a "safe haven" asset, especially as the Bank of Japan's monetary policy makes the currency more attractive. The yen is receiving additional support from macroeconomic statistics: the Jibun Bank Manufacturing PMI in January from S&P Global was adjusted from 52.7 points to 53.0 points. Analysts also drew attention to the significant increase in wages in December from 3.9% to 4.8%, with a forecast of 3.8%. The indexation of wages will affect the dynamics of inflation, and, consequently, will become another argument in favor of further tightening of monetary policy by the Japanese regulator. Today, at 15:15 (GMT+2), investors will pay attention to the report from Automatic Data Processing (ADP) on the level of employment in the US private sector: according to preliminary estimates, the figure will be adjusted from 122.0 thousand to 150.0 thousand. The statistics precede the final figures, which will be released on Friday, at 15:30 (GMT+2): markets forecast a decline in the Nonfarm Payrolls from 256.0 thousand to 170.0 thousand, a slowdown in Average Hourly Earnings from 3.9% to 3.8% year-on-year, and a maintenance of the Unemployment Rate at 4.1%. XAU/USD During the Asian session, the XAU/USD pair is developing an upward trend in the short term, testing 2850.00 for a breakout and receiving support from increased demand for safe assets. Investors were reacting to US President Donald Trump's decision to impose new import duties on goods from Canada and Mexico in the amount of 25.0% from February 1. Later, however, the White House agreed to delay the implementation of these measures for one month, as Canada promised to strengthen the border with the United States, and Mexico agreed to a project to send an additional 10,000 troops to protect the border from illegal migration and the transportation of prohibited substances. In addition, 10.0% tariffs were imposed on imports from China, after which official Beijing introduced mirror measures on the import of coal, liquefied natural gas, agricultural machinery and some cars from the United States. Analysts expect that Donald Trump and Chinese President Xi Jinping may soon hold talks that could result in tariffs being eased or in a new phase of the "trade war" with disruption of supply chains that could impact household budgets around the world. At 15:15 (GMT+2), the market will receive a report from Automatic Data Processing (ADP) on the level of employment in the private sector: forecasts suggest a moderate increase in employment from 122.0 thousand to 150.0 thousand, which could slightly strengthen the position of the American currency. On Friday, at 15:30 (GMT+2), January data on the labor market will be presented: Nonfarm Payrolls is expected to decline from 256.0 thousand to 170.0 thousand, and Average Hourly Earnings are expected to decline from 3.9% to 3.8% year-on-year, while the Unemployment Rate is expected to remain at 4.1%.

Morning Market Review for 10.12.2024

By LiteFinance
EUR/USD The EUR/USD pair shows ambiguous trading dynamics, holding near 1.0555. Market activity remains moderate as traders prefer to wait for the publication of macroeconomic statistics on inflation in the US. On Wednesday, at 15:30 (GMT+2), the market will receive November data on the Consumer Price Index, which, according to forecasts, will accelerate in annual terms from 2.6% to 2.7%, and in monthly terms will remain unchanged at 0.2%, while the Core CPI excluding Food and Energy will grow by another 0.3% in monthly terms and 3.3% in annual terms. Statistics on the Producer Price Index will be released on Thursday: analysts expect the figure to rise in November from 2.4% to 2.6% year-on-year and from 0.2% to 0.3% month-on-month, while the annual Core PPI will rise from 3.1% to 3.3% and in monthly terms will be adjusted from 0.3% to 0.2%. However, this data is unlikely to significantly change expectations regarding the next meeting of the US Federal Reserve, which is scheduled for December 17-18. According to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, the probability of a 25-basis-point interest rate cut is estimated at 80.0%, but at the beginning of 2025 the regulator will probably try to take a wait-and-see position. In turn, today, at 09:00 (GMT+2), in Germany, inflation data was released: the Consumer Price Index in monthly terms fell from 0.4% to –0.2%, and in annual terms it increased from 2.0% to 2.2%, justifying preliminary estimates. The European Central Bank (ECB) meets on Thursday and analysts are confident that officials will adjust the interest rate by –25 basis points to 3.15%, which could put further pressure on the euro. GBP/USD The GBP/USD pair consolidates around 1.2745 during the Asian session. Trading activity remains low at the start of the week, and investors continue to evaluate the November report on the US labor market. The American economy managed to create 227.0 thousand new jobs outside the agricultural sector, which was significantly higher than the October figure of 36.0 thousand with a forecast of 200.0 thousand, the Average Hourly Earnings consolidated at the previous levels of 0.4% in monthly terms and 4.0% in annual terms, while analysts expected a slowdown to 0.3% and 3.9%, respectively, and the Unemployment Rate expectedly accelerated from 4.1% to 4.2%. Overall, these statistics have increased expectations for a possible 25-basis-point interest rate cut at the US Federal Reserve meeting scheduled for December 17-18. The Chicago Mercantile Exchange (CME Group) FedWatch Tool currently estimates the probability of such an outcome at more than 80.0%, but November data on consumer and industrial inflation dynamics could affect the forecasts. On Friday, at 09:00 (GMT+2), October data on UK Gross Domestic Product (GDP) will be released, with analysts expecting the national economy to accelerate by 0.2%, after –0.1% a month earlier. Investors will also be looking at Industrial Production data, which is forecast to rise 0.3% after falling 0.5% in September, and to increase 0.2% year-on-year after falling 1.8%. AUD/USD The AUD/USD pair is showing a confident decline, leveling out the results of yesterday's session, when the instrument demonstrated quite active growth and managed to update local highs from December 4. The Reserve Bank of Australia's (RBA) interest rate decision put pressure on quotes. The regulator kept the rate at the current level of 4.35% for the ninth time in a row, which coincided with forecasts. In the follow-up statement, officials noted that the current monetary policy is fully consistent with the economic situation in the country. There is no need to further reduce the cost of borrowing, since inflation risks remain quite high, and the rate of economic growth so far allows the officials to refrain from easing monetary conditions. Market participants also paid attention to the publication of macroeconomic statistics: the National Australia Bank's Business Confidence index fell from 5.0 points to –3.0 points in November, and the National Australia Bank's Business Conditions index fell from 7.0 points to 2.0 points. On Thursday, investors will be assessing November statistics on the Australian labour market, with forecasts suggesting Employment Change will rise from 15.9 thousand to 25.0 thousand, and the Unemployment Rate will be adjusted from 4.1% to 4.2%. In turn, the US will present data on consumer inflation tomorrow, and on Thursday — on producer inflation. Analysts expect this to further weigh on expectations for a possible 25-basis-point rate cut by the US Federal Reserve at its December meeting, with the likelihood of such a scenario exceeding 80.0%, according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool. USD/JPY The USD/JPY pair shows mixed trading: market activity remains quite low on Tuesday morning, with the instrument holding above 151.10, not far from the local highs of November 28. In the near future, US investors will focus on November consumer and producer inflation data, which could further impact the likelihood of a 25-basis-point rate cut by the US Federal Reserve at its December 17-18 meeting: according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, the likelihood of such a scenario exceeds 80.0%. Meanwhile, statistics released yesterday from Japan provided moderate support to the yen: the national economy's growth rate in the third quarter in annual terms amounted to 1.2%, which was significantly higher than the previous estimate of 0.9%, and in quarterly terms, Gross Domestic Product (GDP) increased from 0.2% to 0.3%. Bank Lending volumes also increased significantly in November, from 2.6% to 3.0%, the Eco Watchers Current Situation Index rose from 47.5 points to 49.4 points, contrary to forecasts of a slowdown to 47.3 points, and the Eco Watchers Outlook rose from 48.3 points to 49.4 points. The Bank of Japan's fourth-quarter business activity data and October industrial production data are due out on Friday. XAU/USD The XAU/USD pair is showing moderate growth, again testing 2670.00 for a breakout. The instrument is supported by expectations of monetary policy easing by leading global regulators, which will reduce the attractiveness of their currencies compared to gold, which does not generate interest income. The Bank of Canada, the Swiss National Bank and the European Central Bank (ECB) are expected to cut borrowing costs this week. Also in focus is the US Federal Reserve meeting next week, December 17-18. Following the release of the November labor market report last Friday, the probability of a –25-basis-point interest rate adjustment rose to nearly 90.0%, according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool. The American economy managed to create 227.0 thousand new jobs outside the agricultural sector, which was significantly higher than the October figure of 36.0 thousand with a forecast of 200.0 thousand, the Average Hourly Earnings consolidated at the previous levels of 0.4% in monthly terms and 4.0% in annual terms, while analysts expected a slowdown to 0.3% and 3.9%, respectively, and the Unemployment Rate expectedly accelerated from 4.1% to 4.2%. Tomorrow, at 15:30 (GMT+2), investors will turn their attention to the US Consumer Price Index for November, which is projected to increase from 2.6% to 2.7% on an annual basis and remain at 0.2% on a monthly basis. The Core CPI excluding Food and Energy may amount to the previous 3.3% and 0.3%, respectively. On Thursday, at the same time, the Producer Price Index will be published: experts expect the indicator to accelerate from 2.4% to 2.6% and from 0.2% to 0.3% in annual and monthly terms, respectively, and the Core PPI may increase from 3.1% to 3.3% in annual terms, but slow down from 0.3% to 0.2% in monthly terms.

Morning Market Review for 02.12.2024

By LiteFinance
EUR/USD The EUR/USD pair is showing a confident decline, correcting after the predominantly "bullish" trading at the end of last week. Quotes are testing 1.0531 for a breakdown, while investors await the publication of November statistics on business activity in the US and the eurozone. S&P Global's Manufacturing PMIs in Germany and the eurozone are expected to remain unchanged at 43.2 points and 45.2 points, respectively, and in the US — at 48.8 points. At the same time, the Institute for Supply Management (ISM) PMI is likely to increase from 46.5 points to 47.5 points. At 12:00 (GMT+2), the market will see October data on the eurozone Unemployment Rate, which currently stands at 6.3%, and a speech by the President of the European Central Bank (ECB) Christine Lagarde, who may clarify the regulator’s plans for further easing of monetary policy in the region. Last Friday, the EU released its November inflation statistics: the Consumer Price Index accelerated from 2.0% to 2.3% year-on-year, in line with market forecasts, and fell 0.3% month-on-month after increasing by 0.3% in the previous month, while the Core CPI adjusted from 2.7% to 2.8% year-on-year and fell by 0.6% after growing by 0.2% month-on-month. The November US labor market report is due out later this week, with nonfarm payrolls expected to rise by 183.0 thousand after increasing by 12.0 thousand last month, with Average Hourly Earnings falling slightly from 0.4% to 0.3% and the Unemployment Rate remaining at 4.1%. GBP/USD The GBP/USD pair is trading with a downtrend, retreating from local highs from November 13, updated at the end of last week. The instrument is testing 1.2690 for a breakdown, and traders are awaiting the publication of November data from S&P Global on business activity in the UK and the US. The UK Manufacturing PMI is expected to remain at 48.6 points, while the US one is expected to remain at 48.8 points. In addition, today, at 09:00 (GMT+2), in the UK, the November statistics on the Nationwide Housing Price Index hit the market: the indicator in monthly terms accelerated from 0.1% to 1.2% with expectations of 0.2%, and in annual terms (without seasonal adjustment) — from 2.4% to 3.7% with neutral forecasts. It is worth noting that last Friday, some pressure on the position of the British currency was exerted by the minutes of the Bank of England meeting, as well as the financial stability report. As expected, the regulator came out with rather cautious wording, pointing out the risks to the global economy in connection with the deterioration of trade prospects, hinting at the readiness of the newly elected US President Donald Trump to raise import duties. At the same time, officials pointed to the stable state of the British financial sector, which is ready for new challenges. Investors also took note of consumer lending data, with Net Lending to Individuals rising to 4.5 billion pounds in October from 3.8 billion pounds, compared with analysts' expectations of 4.1 billion pounds, and Mortgage Approvals rising to 68.303 thousand from 66.115 thousand, compared with market expectations of 64.5 thousand. AUD/USD The AUD/USD pair shows moderate decline, testing the level of 0.6500 for a breakdown. Some pressure on the instrument is exerted by macroeconomic statistics from Australia. In particular, analysts drew attention to the November inflation data from TD Securities: the annualized figure was adjusted from 3.0% to 2.9%, and the monthly figure — from 0.3% to 0.2%. A further slowdown in inflation could signal further monetary easing by the Reserve Bank of Australia (RBA), which has so far maintained a fairly neutral stance. At the same time, Retail Sales in October added 0.6% after increasing by 0.1% in the previous month, while analysts expected 0.3%, and Building Permits increased by 4.2% in monthly terms after 5.8% with preliminary estimates of 2.1%, and in annual terms it fell from 6.8% to 6.1%. The instrument also received some support from data from China, where the Caixin Manufacturing PMI from S&P Global accelerated in November from 50.3 points to 51.5 points, with expectations of 50.5 points. Australia will release November business activity data on Wednesday, as well as revised figures for third-quarter Gross Domestic Product (GDP), with analysts expecting the figure to rise to 0.5% from 0.2%. The US will release its November labor market report later this week, with Nonfarm Payrolls forecast to rise by 183.0 thousand after 12.0 thousand in the previous month. USD/JPY The USD/JPY pair is recovering from a sharp decline at the end of last week, when local lows from October 21 were updated. During the Asian session, quotes are testing 150.65 for a breakout, supported by technical factors and in anticipation of key macroeconomic statistics on the US labor market at the end of the week. Nonfarm Payrolls are expected to increase by 183.0 thousand in November after increasing by 12.0 thousand in the previous month, Average Hourly Earnings are expected to adjust to 0.3% from 0.4% on a monthly basis, and the Unemployment Rate is expected to remain unchanged at 4.1%. In turn, Michigan Consumer Sentiment Index is projected to rise in December from 71.8 points to 72.9 points. On Wednesday, at 15:15 (GMT+2), the US will see a report from Automatic Data Processing (ADP) on private sector employment, with forecasts suggesting a slowdown in November from 233.0 thousand to 165.0 thousand, and at 21:00 (GMT+2), the US Federal Reserve’s monthly economic review, the Beige Book, will be released. Meanwhile, the yen is being supported by statements by Bank of Japan Governor Kazuo Ueda that the cost of borrowing may soon be raised from the current 0.25% at a meeting on December 18-19, since macroeconomic statistics are consistent with the regulator's expectations. Japan released Tokyo-area inflation data for November on Friday, with the annual Consumer Price Index (CPI) rising sharply from 1.8% to 2.6%, while the CPI excluding Food and Energy rose from 1.8% to 2.2%. Investors also noted the growth in Retail Sales in October from 0.5% to 1.6%, which, however, turned out to be worse than the expected 2.2%, while Industrial Production in monthly terms increased from 1.6% to 3.0% with preliminary estimates of 3.9%. XAU/USD The XAU/USD pair is falling, testing 2620.00 for a breakdown. Market activity is fairly strong for a Monday morning session, partly due to US investors returning to the market after Thanksgiving. The dollar is also strengthening amid expectations of new drivers of movement. In particular, November data on Manufacturing PMI will be presented today: forecasts suggest that the S&P Global index will remain at 48.8 points, and the indicator from the Institute for Supply Management (ISM) may rise from 46.5 points to 47.5 points. On Wednesday, the market will receive statistics on Services PMI: it is expected that the index from S&P Global will be fixed at 57.0 points, while the ISM indicator may be adjusted from 56.0 points to 55.5 points. Also, on Wednesday, a report from Automatic Data Processing (ADP) on private sector employment will be published: analysts expect a slowdown in November from 233.0 thousand to 165.0 thousand. The ADP data will come ahead of the Labor Department's final jobs report, which showed a record low of just 12.0 thousand Nonfarm Payrolls in the previous month. In November, a more noticeable increase of 183.0 thousand is expected. Markets also expect Average Hourly Earnings to slow from 0.4% to 0.3%.

Morning Market Review for 31.10.2024

By LiteFinance
EUR/USD The EUR/USD pair is showing an uncertain decline, retreating from the local highs of October 21, updated the day before. The instrument is testing 1.0850 for a breakdown, while trading participants expect new movement drivers to emerge. Among other things, investors are focusing on September data on Retail Sales in Germany: the indicator added 1.2% after increasing by 1.6% in the previous month, while the forecast was –0.5%, and in annual terms the indicator rose from 2.1% to 3.8%, while analysts expected 1.6%. At 12:00 (GMT+2), the market will be given data on inflation in the eurozone: analysts are pricing in a slowdown in the Core CPI from 2.7% to 2.6%, while the broader measure is likely to rise from 1.7% to 1.9%. Any acceleration in inflationary pressures in the eurozone would be seen as a signal in favour of slower monetary easing by the European Central Bank (ECB). At the same time, investors have access to data from Germany, which was published the day before: the Harmonized CPI in October accelerated from 1.8% to 2.4%, with expectations of 2.1% in annual terms, and increased by 0.4% after –0.1% in monthly terms, while experts expected 0.2%. The CPI rose to 2.0% from 1.6% on an annual basis, beating forecasts of 1.8%, while the monthly figure rose 0.4%, doubling preliminary estimates. On Friday, at 14:30 (GMT+2), the US will present the October labor market report: according to preliminary estimates, Nonfarm Payrolls will be adjusted from 254.0 thousand to 111.0 thousand, and Average Hourly Earnings — from 0.4% to 0.3%. Today, at 14:30 (GMT+2), investors will pay attention to the September Personal Consumption Expenditure Price Index: the Core PCE could slow from 2.7% to 2.6% on an annual basis and accelerate from 0.1% to 0.3% on a monthly basis. GBP/USD The GBP/USD pair is trading with downward dynamics, developing a "bearish" momentum formed the day before. The instrument is testing 1.2950 for a breakdown, while analysts are preparing for the publication of statistics from the US. Today at 14:30 (GMT+2) the market will receive September data on the dynamics of Personal Income and Spending of American households: experts expect that Income will rise from 0.2% to 0.3%, and Spending — from 0.2% to 0.4%. In addition, investors will pay attention to the data on jobless claims: Initial Jobless Claims for the week ended October 25, according to preliminary estimates, will increase from 227.0 thousand to 230.0 thousand, and Continuing Jobless Claims for the week ended October 18 will decrease from 1.897 million to 1.89 million. Finally, the PCE price index statistics will be released today: the Core PCE is expected to slow in annual terms in September from 2.7% to 2.6%, and in monthly terms a weak increase from 0.1% to 0.3% is projected. In the UK, the market will see data on the October Nationwide Housing Prices, which could be adjusted from 3.2% to 2.8%, as well as the S&P Global Manufacturing PMI, which is likely to be fixed at 50.3 points. AUD/USD The AUD/USD pair is showing mixed dynamics during the Asian session on October 31, holding near 0.6570. Macroeconomic statistics from Australia are putting pressure on the instrument's position. Retail Sales volumes slowed sharply in September from 0.7% to 0.1% against the forecast of 0.3%, while in the third quarter the indicator added 0.5% after –0.3% in the previous period. In turn, data on Building Permits in September reflected an increase in their number by 4.4% after –3.9% the month before, and in annual terms the indicator accelerated from 3.6% to 6.8%. Investors also paid attention to statistics from China, where NBS Non-Manufacturing PMI in October adjusted from 50.0 points to 50.2 points, while the markets expected 50.4 points, and Manufacturing PMI from the China Federation of Logistics and Supply increased from 49.8 points to 50.1 points, slightly ahead of preliminary estimates of 50.0 points. The day before, pressure on the AUD/USD pair was exerted by Australian inflation data, which increased expectations of further monetary easing by the Reserve Bank of Australia (RBA): the Consumer Price Index in annual terms in September fell from 2.7% to 2.1%, while analysts expected 2.3%, and in quarterly terms — from 1.0% to 0.2%, while experts expected 0.3%. In turn, the American currency reacted negatively to the slowdown in Gross Domestic Product (GDP) from 3.0% to 2.8%, but received strong support from the report from Automatic Data Processing (ADP) on the level of employment in the private sector: in October, Employment increased from 159.0 thousand to 233.0 thousand, while the markets expected a slowdown in the dynamics to 115.0 thousand. USD/JPY The USD/JPY pair is showing a moderate decline, retreating from local highs from July 31, updated at the beginning of the week. The instrument is testing 152.90 for a breakdown, while trading participants are preparing for the publication of key macroeconomic statistics on the US labor market. Forecasts suggest a sharp slowdown in Nonfarm Payrolls from 254.0 thousand to 115.0 thousand, as well as a decrease in Average Hourly Earnings from 0.4% to 0.3% month-on-month and growth of 4.0% year-on-year. At the same time, the Unemployment Rate is expected to remain at 4.1%. At the moment, investors have at their disposal the October report from Automatic Data Processing (ADP), presented the day before and reflecting an increase in the level of employment in the private sector from 159.0 thousand to 233.0 thousand with preliminary estimates of 115.0 thousand. At the same time, the US dollar came under pressure the day before from statistics on Gross Domestic Product (GDP), which fell in the third quarter from 3.0% to 2.8%. Investors are focusing on the results of the Bank of Japan meeting today: as expected, the regulator kept the interest rate unchanged at 0.25%, without receiving sufficient grounds for further tightening of monetary policy. In the current financial year (ending in March 2025), the Bank expects the Consumer Price Index to remain stable at around 2.5%, while in the next year it could fall to 1.9%, below the target of 2.0%, while the country's GDP will increase by 0.6%. The domestic political situation in the country is putting pressure on the position of the monetary authorities: in the elections to the lower house of parliament held on October 27, the ruling coalition lost its advantage and is now forced to seek new allies or form a minority government. Additional pressure on the yen's position is being exerted by statistics from Japan on the dynamics of Retail Sales: in September, their volumes in annual terms slowed sharply from 2.8% to 0.5% with preliminary estimates of 2.3%, and in monthly terms the indicator lost 2.3% after increasing by 1.0% the month before. XAU/USD The XAU/USD pair is showing a hesitant decline, still holding near record highs located near 2790.00. The instrument is approaching another psychological level of 2800.00, receiving support from growing geopolitical uncertainty. In particular, the US presidential election will take place on November 5, after which the vector of the US Federal Reserve’s further monetary policy may change. If Republican candidate Donald Trump wins, the pace of decline in borrowing costs could slow due to tightening tariff policies. At the same time, expectations regarding the upcoming meetings of global regulators are putting pressure on gold. In November, interest rate cuts are expected from the US Federal Reserve, the European Central Bank (ECB) and, probably, the Bank of England. The American regulator is most likely to adjust the rate by –25 basis points, while the European and British ones may go straight to –50 basis points. The US labor market report may have a significant impact on the future monetary policy of the US Fed: forecasts suggest a slowdown in Nonfarm Payrolls in October from 254.0 thousand to 115.0 thousand, and in Average Hourly Earnings from 0.4% to 0.3%. Today, the market will focus on statistics on price indices for Personal Consumption Expenditures: the Core indicator in September may be adjusted in annual terms from 2.7% to 2.6%, and in monthly terms — from 0.1% to 0.3%.

Morning Market Review for 24.10.2024

By LiteFinance
EUR/USD The EUR/USD pair is showing weak growth, recovering from local lows of July 3, updated the day before. The instrument is testing 1.0790 for a breakout, while trading participants expect the emergence of new movement drivers. Among other things, October business activity statistics for the eurozone and the US will be published today. Forecasts call for a weak increase in the eurozone Manufacturing PMI from 45.0 points to 45.1 points and in the Services PMI — from 51.4 points to 51.6 points, while the Composite PMI is likely to adjust from 49.6 points to 49.7 points. In Germany, the Manufacturing PMI is expected to decline from 40.6 points to 40.5 points, and the Services PMI — from 50.6 points to 50.5 points. Data from France also do not promise confident growth: the Services PMI is expected to remain at the previous level of 49.6 points, while the Manufacturing PMI may decrease from 44.6 points to 44.4 points. Meanwhile, forecasts for US indicators suggest an increase in the S&P Global Manufacturing PMI from 47.3 points to 47.5 points, while the Services PMI a decrease is expected from 55.2 points to 55.0 points. Some pressure on the single currency's position was exerted the day before by October data on Consumer Confidence in the eurozone, which improved slightly from –12.9 points to –12.5 points. Finally, European investors are discussing the prospects for further monetary easing by the European Central Bank (ECB): in her recent speech, the regulator's President Christine Lagarde admitted that the agency has not decided on the pace of further reductions in borrowing costs yet. At the same time, the official did not rule out the possibility of reducing the interest rate by 50 basis points at once at the next meetings. In October, the ECB adjusted the indicator by –25 basis points and slightly improved its inflation forecasts for 2025. GBP/USD The GBP/USD pair is trading with a weak upward trend, staying close to the local lows of August 16, updated the day before. The reason for the active decline in the British currency rate yesterday was the speech by the Governor of the Bank of England, Andrew Bailey, who again hinted at the possibility of easing monetary parameters in November. Among other things, the official noted that inflation in the country was lower than expected a year ago. At the same time, he emphasized that the Bank of England has yet to fully assess the scale of structural changes in the economy that have occurred recently. In any case, Bailey has previously said that the cautious approach to reducing borrowing costs could change if there is consistent evidence of easing inflationary pressures. There is now nothing stopping the Bank of England from adjusting the interest rate in November, perhaps even at a faster pace than originally expected. Investors are also increasing expectations that the rate will be cut again in December: the market currently estimates the probability of such a scenario at 60.0%. According to data released last week, annual inflation in the UK slowed in September from 2.2% to 1.7%, compared with a forecast of 1.9%, while the Core Consumer Price Index fell from 3.6% to 3.2%, compared with a preliminary estimate of 3.4%. Business activity data are due out in the UK today, with analysts expecting the S&P Global Manufacturing PMI to fall to 51.4 points in October from 51.5 points and the Services PMI to fall to 52.2 points from 52.4 points. Meanwhile, forecasts for similar statistics from the US, which will also hit the market today, suggest an increase in the Manufacturing PMI from 47.3 points to 47.5 points, while the Services PMI may decrease from 55.2 points to 55.0 points. AUD/USD The AUD/USD pair is showing moderate growth, recovering from previous local lows from August 16, updated the day before. The instrument is testing 0.6650 for a breakout, receiving some support from macroeconomic publications from Australia. The Commonwealth Bank's Services PMI rose to 50.6 points in October from 50.5 points, with a neutral outlook, and the Commonwealth Bank's Composite PMI rose to 49.8 points from 49.6 points. Meanwhile, the S&P Global Manufacturing PMI fell from 46.7 points to 46.6 points. US business activity statistics will hit the market today at 15:45 (GMT+2): analysts expect mixed dynamics, which are unlikely to provide significant support to the national currency. The S&P Global Manufacturing PMI in October could adjust from 47.3 points to 47.5 points, and the Services PMI could adjust from 55.2 points to 55.0 points. In addition, American investors are assessing the data on Existing Home Sales, presented the day before: the indicator in September fell 1.0% after –2.0% in the previous month. Markets also analyzed the US Federal Reserve's monthly survey, the Beige Book, published on Wednesday, which reflected either continued or a moderate decline in economic activity in most US counties. USD/JPY The USD/JPY pair is showing a moderate decline, correcting after active growth the day before, as a result of which quotes managed to update local highs from July 31. The US currency's position is weakening under pressure from technical factors and expectations of the release of October business activity statistics from S&P Global. Analysts expect the Services PMI to slow from 55.2 points to 55.0 points, while the Manufacturing PMI is likely to adjust from 47.3 points to 47.5 points, but will still remain below the psychological level of 50.0 points, which separates growth from stagnation. At 14:30 (GMT+2), jobless claims data will be released: according to forecasts, Initial Jobless Claims for the week ending October 18 will increase from 241.0 thousand to 242.0 thousand, while Continuing Jobless Claims for the week ending October 11 may change little from the previous value of 1.867 million. Meanwhile, some pressure on the yen's position is being exerted by macroeconomic statistics on business activity: the Manufacturing PMI in October showed a decline from 49.7 points to 49.0 points, while analysts expected 49.8 points, and the Jibun Bank Services PMI fell from 53.1 points to 49.3 points. Japan will release Tokyo CPI data for October tomorrow, with the Consumer Price Index excluding Fresh Food expected to slow to 1.7% from 2.0%. A weakening reading could put significant pressure on the Bank of Japan's stance on further monetary tightening. XAU/USD The XAU/USD pair is showing weak growth, recovering from a fairly active decline the day before, which did not allow the instrument to consolidate at new record highs near 2760.00. Technical factors are putting pressure on quotes, while the macroeconomic and news background changes little. The day before, investors paid attention to statistics on Existing Home Sales in the US: in September, the indicator fell by 1.0% after –2.0% in the previous month, and in absolute terms, sales slowed from 3.86 million to 3.84 million, while analysts expected 3.90 million. In addition, the focus of attention of traders yesterday was the monthly review from the US Federal Reserve, the Beige Book, according to which economic activity in the country remained virtually unchanged in September-October. Most US counties reported declines in manufacturing, while the banking sector remained stable or showed slight growth. Activity in the residential property market remained the same, while the lack of affordable housing in many cities remains a serious problem for citizens. Today at 15:45 (GMT+2), the US will present October business activity data from S&P Global: forecasts suggest a decrease in the Services PMI from 55.2 points to 55.0 points, while the Manufacturing PMI may be adjusted from 47.3 points to 47.5 points.

Morning Market Review for 14.10.2024

By LiteFinance
EUR/USD The EUR/USD pair is showing an uncertain decline, consolidating near 1.0925 and local lows from August 8, updated at the end of last week, although the instrument demonstrated attempts at corrective growth, receiving weak support from technical factors. Meanwhile, key macroeconomic statistics on inflation from the US and Germany were in the center of attention of market participants. In September, the US Consumer Price Index slowed from 2.5% to 2.4% year-on-year, compared to a forecast of 2.3%, and in monthly terms it remained at 0.2%, while analysts had expected 0.1%. The Core CPI excluding Food and Energy accelerated from 3.2% to 3.3% year-on-year and added another 0.3% month-on-month. On Friday, data on producer inflation in the US was released: the Producer Price Index in September in annual terms was adjusted from 1.9% to 1.8% with expectations of 1.6%, and in monthly terms — from 0.2% to 0.0% with preliminary estimates of 0.1%, while the PPI excluding Food and Energy rose from 2.6% to 2.8%, while analysts expected 2.7%. In addition, market participants noted the decline in the University of Michigan Consumer Confidence index in October from 70.1 points to 68.9 points, with a forecast of 70.8 points. German inflation statistics did not have a noticeable impact on the market: the Consumer Price Index in September remained at 0.0% monthly and 1.6% annually, while the Harmonized CPI fell by 0.1% and added 1.8%, respectively. The European Central Bank (ECB) is set to meet on Thursday and is likely to cut its interest rate by 25 basis points to 3.40%, which could put further pressure on the single currency. GBP/USD The GBP/USD pair is trading in different directions, holding close to 1.3060. Activity on the instrument remains low at the beginning of the new week, as traders expect new drivers to emerge, while simultaneously assessing the prospects for monetary easing by the US Federal Reserve and the Bank of England. Earlier, the Chair of the American regulator, Jerome Powell, spoke out against the high pace of reduction in the cost of borrowing, which led to a revision of forecasts for the November meeting. According to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, the probability of an interest rate adjustment of –25 basis points is 80.0%, while the previous main scenario envisaged a cut of 50 basis points. Last week's US consumer and producer inflation data only confirmed these considerations: in September, the Consumer Price Index slowed from 2.5% to 2.4%, while analysts expected 2.3%, and the Core CPI accelerated from 3.2% to 3.3%. In turn, the Core Producer Price Index rose from 2.6% to 2.8%, with preliminary estimates of 2.7%. Meanwhile, the pound received some support from macroeconomic data released on Friday: the UK's Gross Domestic Product (GDP) growth rate accelerated in August from 0.0% to 0.2%, Industrial Production increased by 0.5% month-on-month after –0.7% in the previous month, while experts expected 0.2%, and in annual terms the figure rose from –2.2% to –1.6%, which was significantly worse than expectations of –0.5%. Manufacturing Production rose 1.1% in August after falling 1.2%, while analysts had expected a 0.2% gain. Tomorrow, the market will receive data on the UK labor market for August-September: a slight decrease from 23.7 thousand to 20.2 thousand is expected in the Claimant Count Change in September, and Average Earnings Including Bonus in August are likely to adjust from 4.0% to 3.8%, and Excluding Bonus — from 5.1% to 5.0%. NZD/USD The NZD/USD pair is trading with near-zero dynamics, holding near 0.6090. Market activity remains subdued as trading floors in the US are closed for Columbus Day celebrations. Meanwhile, New Zealand's macroeconomic data released this morning were mixed, with the Business NZ PSI rising to 45.7 points in September from 45.5 points, and Electronic Card Retail Sales falling sharply by 5.6% year-on-year from –2.9% the previous month, and by 0.2% month-on-month to 0.0%. Some pressure on the instrument's position was also exerted by data from China presented last weekend, where the Consumer Price Index in September slowed from 0.6% to 0.4% year-on-year, and from 0.4% to 0.0% month-on-month, while analysts expected the previous dynamics to be maintained. Producer Price Index for the same period showed an acceleration in the rate of decline from –1.8% to –2.8%, while analysts had expected –2.5%. In addition, pressure on the instrument remains after the Reserve Bank of New Zealand (RBNZ) reviewed its monetary policy parameters last week: as expected, the regulator adjusted the interest rate by –50 basis points to 4.75%, noting significant success in combating high rates of inflation growth. Investors are also assessing the impact of inflation data on the Fed's future monetary policy: recall that in September, the Consumer Price Index slowed from 2.5% to 2.4% against a forecast of 2.3%, and the Core CPI increased from 3.2% to 3.3%, further strengthening analysts' belief that the regulator will reduce borrowing costs by only 25 basis points in November. USD/JPY The USD/JPY pair shows insignificant growth, developing a weak "bullish" momentum formed at the end of last week. The instrument is testing 149.30 for a breakout, preparing to update the local highs of early August. Activity remains muted at the start of the week, however, as the US trading floors are closed for Columbus Day and investors are analyzing inflation data released late last week. The Core Consumer Price Index excluding Food and Energy rose to 3.3% year-on-year in September from 3.2%, compared with neutral forecasts, and remained at 0.3% month-on-month, while experts expected 0.2%, with the broader measure slowing to 2.4% year-on-year from 2.5%, compared with expectations of 2.3%. In turn, the Producer Price Index fell from 1.9% to 1.8% with preliminary estimates of 1.6% in annual terms and adjusted from 0.2% to 0.0%, ahead of forecasts of 0.1%, in monthly terms, while the annual Core PPI accelerated from 2.6% to 2.8%, while analysts expected 2.7%. Separately, market participants drew attention to the decline in the Consumer Confidence index from the University of Michigan in October from 70.1 points to 68.9 points, while analysts expected the indicator to rise to 70.8 points. Tomorrow at 01:50 (GMT+2), Japan will publish August Industrial Production data: the previous negative dynamics in monthly terms are expected to remain at –3.3%. September inflation data hits the market on Friday, with preliminary estimates showing the National Consumer Price Index excluding Fresh Food to slow sharply to 2.3% from 2.8%, which could significantly dampen expectations for further monetary tightening by the Bank of Japan. XAU/USD The XAU/USD pair is showing moderate growth, developing the "bullish" momentum formed once again at the end of last week, when the instrument managed to retreat from its local lows of September 20. Gold is testing 2660.00 for a breakout, receiving support from expectations of monetary easing by global financial regulators. In particular, on Thursday, October 17, the European Central Bank (ECB) is expected to cut the interest rate by 25 basis points. Investors are counting on another reduction in the indicator from the US Federal Reserve in November. At the same time, analysts have practically abandoned the idea of adjusting the rate immediately by –50 basis points against the backdrop of statements by the Chair of the Fed, Jerome Powell, as well as macroeconomic statistics on inflation published at the end of last week. In September, the Consumer Price Index slowed down in annual terms from 2.5% to 2.4%, with a forecast of 2.3%, and in monthly terms it remained at 0.2%, while experts expected 0.1%. The Core CPI excluding Food and Energy adjusted from 3.2% to 3.3% year-on-year and added 0.3% month-on-month. In turn, the Producer Price Index in annual terms fell from 1.9% to 1.8% with expectations of 1.6%, and in monthly terms — from 0.2% to 0.0% with preliminary estimates of 0.1%, while the PPI excluding Food and Energy rose from 2.6% to 2.8% with a forecast of 2.7%. Separately, market participants drew attention to the decline in the Consumer Confidence index from the University of Michigan in October from 70.1 points to 68.9 points, while analysts expected the indicator to rise to 70.8 points. Additionally, gold is supported by ongoing geopolitical risks, which are only intensifying as uncertainty around the US presidential election in November grows.

Morning Market Review for 11.10.2024

By LiteFinance
EUR/USD The EUR/USD pair shows ambiguous trading dynamics, consolidating near 1.0935. The focus of European investors today is on inflation statistics in Germany. The Consumer Price Index in Germany in September amounted to 1.6% year-on-year and 0.0% month-on-month, while the Harmonized CPI accelerated by another 1.8% year-on-year but fell by 0.1% month-on-month. In turn, today at 14:30 (GMT+2), the US will present September data on producer inflation: forecasts suggest that the PPI will slow from 1.7% to 1.6% on an annual basis and from 0.2% to 0.1% on a monthly basis, with the PPI excluding Food and Energy likely to adjust from 2.4% to 2.7% on an annual basis. The statistics will supplement the data on the dynamics of consumer prices in the US, which was published the day before: the September data reflected a slowdown in the annual indicator from 2.5% to 2.4% with a forecast of 2.3%, and in monthly terms it again added 0.2%, contrary to expectations of a slowdown to 0.1%, while Core CPI fell from 3.2% to 3.3% year-on-year and increased by another 0.3% in monthly terms, although the markets expected 0.2%. In addition, at 16:00 (GMT+2) the market will receive October data on the Consumer Confidence index from the University of Michigan: analysts expect a moderate increase in the indicator from 70.1 points to 70.8 points. GBP/USD The GBP/USD pair is trading with a slight decrease, testing 1.3050 for a breakdown. The day before, the instrument also showed moderate negative dynamics, having managed to update the local minimums of September 11, which was the market’s reaction to the publication of September statistics on inflation in the US. The Consumer Price Index slowed down from 2.5% to 2.4% year-on-year, while analysts had expected 2.3%, and in monthly terms it rose by the previous 0.2%, contrary to preliminary estimates of 0.1%. At the same time, the Core CPI excluding Food and Energy accelerated from 3.2% to 3.3% with neutral forecasts. Against this backdrop, investors have significantly reduced expectations regarding a possible easing of the US Federal Reserve's monetary policy during the November meeting: according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, the probability of a 25-basis-point interest rate cut is estimated at approximately 80.0%, while previously it exceeded 90.0%. At the same time, some pressure on the position of the American currency on Thursday was exerted by statistics on jobless claims: Initial Jobless Claims for the week ending October 4 increased from 225.0 thousand to 258.0 thousand, significantly exceeding expectations of 230.0 thousand, and Continuing Jobless Claims for the week ending September 27 — from 1.819 million to 1.861 million, while experts expected 1.830 million. In turn, British investors paid attention to the dynamics of the Gross Domestic Product (GDP): it added 0.2% after zero dynamics in the previous month, while Industrial Production in annual terms again significantly decreased by 1.6% after –1.2%, while analysts expected –0.5%, and in monthly terms they were adjusted by 0.5% after –0.7% with a forecast of 0.2%. Manufacturing Output fell 0.3% year-on-year in August after falling 2.0% in July, while experts had expected 0.4%, while the monthly figure was 1.1%, compared to 1.2% the previous month. Meanwhile, the Index of Services slowed to 0.1% in August from 0.6%, compared to preliminary estimates of 0.3%. NZD/USD The NZD/USD pair is showing moderate growth, developing the "bullish" momentum that formed the day before. The instrument is trying to consolidate above the psychological resistance at 0.6100, receiving support from macroeconomic statistics from New Zealand. The Manufacturing PMI rose in September from 46.1 points to 46.9 points with neutral forecasts, and the Food Price Index rose from 0.2% to 0.5%. Meanwhile, Tourist Arrivals in August slowed slightly from 3.8% to 3.6%. The instrument is developing corrective dynamics, despite the publication of statistics on inflation in the US, which led to a slight revision of forecasts regarding the November easing of monetary policy by the US Federal Reserve. The Core Consumer Price Index in September accelerated from 3.2% to 3.3%, while the broader measure slowed from 2.5% to 2.4%, while analysts had expected 2.3%. The NZD/USD pair is also under pressure from the decision of the Reserve Bank of New Zealand (RBNZ), published on Wednesday: as expected, the interest rate was reduced by 50 basis points to 4.75%, effectively confirming that officials have managed to weaken inflation to the upper limit of the target range. USD/JPY The USD/JPY pair is showing minor growth, consolidating near 148.70. The day before, the instrument demonstrated a moderate decline, retreating from the local highs of August 2, which was due to the publication of macroeconomic statistics in the United States. In particular, markets paid attention to the September inflation data. The Consumer Price Index slowed down from 2.5% to 2.4% year-on-year, while analysts had expected 2.3%, and in monthly terms it rose by the previous 0.2%, contrary to preliminary estimates of 0.1%. At the same time, the Core CPI excluding Food and Energy accelerated from 3.2% to 3.3% with neutral forecasts, while in monthly terms the indicator added another 0.3% with expectations of 0.2%. Slightly more resilient inflation in the country has reduced the likelihood of another cut in borrowing costs by the US Federal Reserve in November. However, according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, about 80.0% of experts expect an interest rate adjustment of –25 basis points. Meanwhile, statistics from Japan provided minor support to the yen the day before: the index of domestic prices for corporate goods in September rose from 2.6% to 2.8%, while analysts expected 2.3%, and the index of producer prices of goods showed zero dynamics after –0.2% with a forecast of –0.3%. At the same time, the volume of Bank Lending in September adjusted from 3.0% to 2.7%. XAU/USD The XAU/USD pair is showing quite active growth, developing the "bullish" impetus formed the day before, when the instrument managed to retreat from the local lows of September 20. At the same time, the further upward dynamics of the instrument is limited by some strengthening of positions on the American currency against the backdrop of reduced expectations of new easing of monetary policy by the US Federal Reserve. In particular, the day before, investors paid attention to the publication of macroeconomic statistics on inflation in the US: thus, in September, the Consumer Price Index slowed from 2.5% to 2.4% in annual terms relative to forecasts of 2.3% and remained at 0.2% in monthly terms, although experts expected a decrease to 0.1%. At the same time, the Core CPI excluding Food and Energy accelerated from 3.2% to 3.3%. Thus, the probability of the US Federal Reserve adjusting its interest rate in November, according to the Chicago Mercantile Exchange (CME) FedWatch Tool, has decreased from 90.0% to 80.0%. Further supporting gold is ongoing geopolitical tensions in the Middle East, where Israel has been conducting a limited military operation in southern Lebanon since October 1.

Morning Market Review for 10.10.2024

By LiteFinance
EUR/USD The EUR/USD pair is showing mixed dynamics, consolidating near 1.0940 and local lows from August 13. Market activity remains fairly subdued as traders await the release of US inflation statistics for September. The Core Consumer Price Index excluding Food and Energy is forecast to remain unchanged at 3.2% year-on-year and to slow slightly from 0.3% to 0.2% month-on-month, while the broader measure is likely to decline from 2.5% to 2.3% and from 0.2% to 0.1%, respectively. Also, during the day, data on jobless claims will be presented: it is expected that the initial jobless claims for the week ending October 4 will increase from 225.0 thousand to 230.0 thousand. For now, traders have at their disposal the minutes of the September meeting of the US Federal Reserve System, which were published the day before and ended with a reduction in the interest rate by 50 basis points. Officials cautioned against jumping to conclusions that the rapid pace of monetary easing signals a worsening economic outlook. In turn, today at 13:30 (GMT+2), the minutes of the meeting of the European Central Bank (ECB) will be released to the market: in September, the regulator decided to keep monetary parameters unchanged, but market participants still expect new easing before the end of this year, especially since the region's economic indicators continue to deteriorate. In particular, the day before, Germany announced a revision of its forecasts for economic growth for the current year and now expects a decline in Gross Domestic Product (GDP) by 0.2%, contrary to the previous estimate of 0.3%, with an increase of 1.1% expected in 2025 and 1.6% in 2026. In addition, data on Retail Sales in Germany were presented today: the monthly figure rose from –1.2% to 1.6%, and the annual figure rose from –1.6% to 2.1%. GBP/USD The GBP/USD pair is trading with near-zero dynamics during the morning session on October 10, holding close to 1.3075 and local lows from September 12: investors are mainly focused on data from the US. In particular, the day before, the market assessed the published minutes of the September meeting of the US Federal Open Market Committee (FOMC). Earlier, the Chair of the Fed, Jerome Powell, already noted a number of key points, speaking out against further easing of monetary parameters at a high pace. Now, according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, markets are pricing in a rate adjustment of only –25 basis points in November with a probability close to 90.0%. The situation regarding the December meeting is still more uncertain, but analysts are also more inclined to favor a scenario with a 25-basis-point cut. Today at 14:30 (GMT+2), the US will release September inflation statistics, which could also make significant adjustments to market expectations regarding interest rates. Forecasts suggest a slowdown in the Consumer Price Index from 2.5% to 2.3% year-on-year and from 0.2% to 0.1% month-on-month, while the Core CPI excluding Food and Energy is likely to remain at the same level of 3.2%. In addition, the Bank of England's inflation report will be published today, which may influence the regulator's future rhetoric, which is currently maintaining a wait-and-see stance, but after the US Federal Reserve's interest rate cut, the likelihood of new monetary policy adjustments in the UK has increased significantly. The instrument was also given some support today by the Royal Institution of Chartered Surveyors (RICS) house price index, which showed an increase of 11.0% in September after zero dynamics in August, while analysts expected an increase of 4.0%. NZD/USD The NZD/USD pair shows a noticeable growth during the Asian session on October 10, quickly recovering from a sharp decline the day before, due to which local lows from August 19 were updated near the psychological level of 0.6000. The instrument is testing 0.6090 for a breakout, while trading participants expect the emergence of new movement drivers. In particular, today at 14:30 (GMT+2), the US will publish September inflation statistics: forecasts suggest that the Core Consumer Price Index excluding Energy and Food will increase by another 3.2% year-on-year and slow from 0.3% to 0.2% month-on-month, while the broader index will decline from 2.5% to 2.3% and from 0.2% to 0.1%, respectively. Meanwhile, the results of the Reserve Bank of New Zealand (RBNZ) meeting put pressure on the instrument's position the day before: as expected, the regulator adjusted the interest rate by –50 basis points to 4.75% for the second time in a row. As in the case of the US Federal Reserve, the RBNZ noted that the pace of further reduction in borrowing costs will depend on the situation in the economy, in particular, on the level of inflation. For now, officials say the annualized Consumer Price Index is already within the target range and is heading toward its lower limit of 2.0%. New Zealand's September manufacturing business activity data are due out tomorrow, with forecasts suggesting little change from the previous reading of 45.8 points. USD/JPY The USD/JPY pair is showing flat dynamics, consolidating near 149.20 and local highs from August 2. Market activity remains fairly subdued as traders await the release of US inflation statistics for September. Forecasts suggest a slowdown in the Consumer Price Index from 2.5% to 2.3% year-on-year and from 0.2% to 0.1% month-on-month, while the Core CPI excluding Food and Energy is likely to remain at the same level of 3.2%. Investors will also be looking at jobless claims data and the monthly US budget report for September, which is expected to show a surplus of 61.0 billion dollars after a deficit of –380.0 billion dollars. Investors are assessing a block of statistics from Japan: the index of domestic prices for corporate goods in September accelerated from 2.6% to 2.8%, contrary to forecasts of a slowdown to 2.3%, the indicator of producer prices of goods showed zero dynamics in monthly terms after –0.2% in August, while the markets expected an increase in negative dynamics to –0.3%, and the volume of bank lending slowed slightly from 3.0% to 2.7%. Overall, the data reflected a possible increase in inflation risks within the country, which should have a positive impact on expectations of further monetary tightening by the Bank of Japan. XAU/USD The XAU/USD pair is slightly strengthening during the morning session on October 10, trying to recover from the local lows of September 20. Pressure on the instrument remains as the market revises its forecasts for the future monetary policy of the US Federal Reserve. After a sharp 50-basis-point rate cut in September, Fed Chairman Jerome Powell has spoken out against further rate adjustments at a rapid pace. This was also confirmed by the official minutes of the September meeting, which became available the day before. In particular, officials stated that the size of the next reduction in the indicator will be determined based on the current economic situation in the country. The market has significantly revised its expectations for the US Federal Reserve's November meeting and now, according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, analysts are expecting a –25-basis-point adjustment with a probability of about 90.0%. Today at 14:30 (GMT+2), the market will receive statistics on inflation in the US: it is expected that the Core Consumer Price Index excluding Energy and Food will add another 3.2% in September in annual terms and slow from 0.3% to 0.2% in monthly terms, while the CPI may decrease from 2.5% to 2.3% and from 0.2% to 0.1%, respectively. Additional pressure on the instrument is also being exerted by the results of the meeting of the National Development and Reform Commission of the People's Republic of China, which failed to meet all market expectations: the commission did not announce the introduction of any specific measures, and the new support package is more systemic in nature. It was also announced that a new investment plan of 100.0 billion yuan for next year would be published by the end of October.

Morning Market Review for 09.10.2024

By LiteFinance
EUR/USD The EUR/USD pair is showing a moderate decline after attempts at corrective growth at the beginning of the week. The instrument is testing 1.0960 for a breakdown, again approaching the local lows of August 15. The macroeconomic statistics from the eurozone published the day before did not provide significant support to the quotes: Industrial Production in Germany in August increased by 2.9% after –2.4% in the previous month, while analysts expected 0.8%, and in annual terms they fell by 2.7% after –5.3%. Separately, investors paid attention to the deterioration of France's foreign trade indicators: Exports slowed down from 48.466 billion euros to 49.657 billion euros, while Imports, on the contrary, increased from 55.508 billion euros to 57.028 billion euros, which led to a correction of the Trade Balance deficit from –6.064 billion euros to –7.371 billion euros with a forecast of –5.500 billion euros. In turn, the positions of the American currency received support the day before from macroeconomic statistics from the United States: the Economic Optimism Index from IBD/TIPP strengthened in October from 46.1 points to 46.9 points, with expectations of 47.2 points. Today at 20:00 (GMT+2), investors will focus on the publication of the minutes of the September meeting of the US Federal Reserve, at which the interest rate was reduced by 50 basis points at once. Officials are likely to confirm their intention to continue to reduce borrowing costs, but at a more moderate pace. GBP/USD The GBP/USD pair is trading with downward dynamics, again preparing to test 1.3080 for a breakdown. Market activity remains subdued as investors await new drivers of movement, which could include, among other things, the minutes of the US Federal Reserve meeting, which will be published today at 20:00 (GMT+2). Earlier, the Chair of the regulator, Jerome Powell, had spoken about the prospects for monetary policy and called for considering a more gradual reduction in the cost of borrowing in the future, after which the markets revised their forecasts for the November meeting of the Fed and now, with a probability of more than 90.0%, they expect an adjustment in the interest rate by only –25 basis points, according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool. The inflation data due out tomorrow at 14:30 (GMT+2) seems a bit of a secondary story at the moment, but any significant deviations in the dynamics could impact the Fed's decisions. In any case, analysts expect the Consumer Price Index to slow down in annual terms from 2.5% to 2.3% in September, and in monthly terms from 0.2% to 0.1%. At the same time, the Core CPI excluding Food and Energy is likely to remain at 3.2% year-on-year and will be adjusted from 0.3% to 0.2% month-on-month. Also on Thursday, data on jobless claims will be presented: experts expect an increase in Initial Jobless Claims for the week ended October 4 from 225.0 thousand to 230.0 thousand. Tomorrow, the UK will release an inflation report that could shed light on the prospects for further interest rate cuts by the Bank of England. At the moment, the pound is being moderately supported by the data on the dynamics of Retail Sales from the British Retail Consortium (BRC), which entered the market the day before: thanks to an increase in demand for non-food products, the indicator increased by 1.7% year-on-year, with expectations of 0.8%. AUD/USD The AUD/USD pair is showing a noticeable corrective growth, retreating from its local lows of September 16, updated the day before. The instrument is testing 0.6750 for a breakout, while trading participants expect the emergence of new movement drivers. Among other things, today at 20:00 (GMT+2) the minutes of the September meeting of the US Federal Reserve will be published. The regulator announced a 50-basis-point rate cut, but later the Chair of the Fed, Jerome Powell, spoke out against easing monetary policy at such a high pace, against which the markets adjusted their expectations regarding a reduction in borrowing costs by the end of this year, but still expect one or two reductions in the value by the end of the year from the current 5.00%. Meanwhile, the position of the Reserve Bank of Australia (RBA) remains ambiguous: the minutes of the September meeting presented yesterday did not contain any hints of easing the parameters and only reflected previous theses about the need for an appropriate response to macroeconomic data. At the same time, officials are counting on a noticeable improvement in the domestic economic situation next year, which will allow them to implement their planned reduction of the interest rate to the target level of 2.0%. The macroeconomic statistics released the day before provided some support to the instrument: the National Australia Bank's business confidence index increased from –5.0 points to –2.0 points in September, the Business Conditions index rose from 3.0 points to 7.0 points, and the Westpac Consumer Confidence index accelerated sharply by 6.2% in October after –0.5% in the previous month. USD/JPY The USD/JPY pair is showing weak growth, recovering from some decline at the beginning of the week, which did not allow the instrument to consolidate at new local highs from August 16. Quotes are testing 148.50 for a breakout, while traders are awaiting the publication of the minutes of the September meeting of the US Federal Reserve at 20:00 (GMT+2). At the same time, earlier the Chair of the regulator Jerome Powell had already spoken out regarding the prospects of monetary policy, speaking out against further reduction of the interest rate at a high pace and insisting on a gradual adjustment of the value by –25 basis points. Against this backdrop, investors have revised their forecasts for the November meeting and now, according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, the probability of a 25-basis-point reduction in borrowing costs is more than 90.0%. The US macroeconomic statistics published the day before turned out to be cautiously optimistic: the business optimism index from the National Federation of Independent Business (NFIB) rose from 91.2 points to 91.5 points in September, while analysts expected 91.7 points, and the economic optimism index from IBD/TIPP in October demonstrated growth from 46.1 points to 46.9 points with a forecast of 47.2 points. Meanwhile, data from Japan showed Labor Cash Earnings slowing in August from 3.4% to 3.0%, compared with expectations for 3.1%. The decline in wage dynamics may indirectly indicate a weakening of inflation risks within the country, which negatively affects expectations of further tightening of monetary policy by the Bank of Japan. The Eco Watchers Current Situation Index fell from 49.0 points to 47.8 points in September, while the Outlook fell from 50.3 points to 49.7 points. XAU/USD The XAU/USD pair is consolidating near 2620.00 during the morning session, awaiting the publication of the minutes of the US Federal Reserve's September meeting, which may clarify the outlook for further monetary easing. Earlier, the Chair of the regulator, Jerome Powell, spoke out against a rapid reduction in the interest rate by 50 basis points. According to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, the probability of a 25-basis-point correction at the November meeting briefly jumped above 90.0% and is currently around 87.0%. Tomorrow, the US will release inflation data, which could also influence further decisions by officials. At the same time, forecasts suggest that core annual inflation will remain unchanged at 3.2%, while the CPI is likely to decline from 2.5% to 2.3%. Meanwhile, demand for gold continues to increase amid geopolitical tensions in the Middle East, where the threat of an expansion of the theatre of military operations remains. Markets are also preparing for the November US presidential elections, the results of which could significantly impact various aspects of the country's domestic and foreign policy.

Morning Market Review for 08.10.2024

By LiteFinance
EUR/USD The EUR/USD pair is moderately rising, developing a weak and uncertain signal for corrective growth, formed the day before, when the instrument retreated from its local lows of August 15. The single currency is supported by macroeconomic statistics from the eurozone. Investors took note of the 0.8% year-on-year increase in Retail Sales in August after a 0.1% drop in the previous month, while analysts had expected a 1.0% gain, and the monthly figure, as expected, added 0.2% after a flat month in July. The Sentix Investor Confidence indicator strengthened slightly in October from –15.4 points to –13.8 points. Meanwhile, German Factory Orders fell 5.8% in August after rising 3.9% the previous month, against expectations of –2.0%, and on an annual basis the indicator was –3.9% after 4.6%. Today, investors are focusing on August statistics on Industrial Production in Germany: in monthly terms, its volumes rose by 2.9% after –2.4%, while experts expected 0.8%. In turn, tomorrow the minutes of the September meeting of the US Federal Reserve will be presented: investors expect to clarify the prospects for further easing of the regulator's monetary policy this year. At the same time, according to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, the probability of a rate cut of only 25 basis points during the November meeting is 90.0%. GBP/USD The GBP/USD pair is showing mixed trading, consolidating near 1.3090. The instrument is trying to regain some of the positions it lost the day before, receiving limited support from macroeconomic publications from the UK. British Retail Consortium (BRC) Retail Sales volumes rose sharply by 1.7% in September after rising 0.8% the previous month. In turn, tomorrow in the US the minutes of the September meeting of the US Federal Open Market Committee (FOMC) will be published. Earlier, the Chair of the regulator, Jerome Powell, had already clarified the prospects for monetary policy at least until the end of this year, speaking out sharply against reducing the interest rate by 50 basis points or more, but at the same time agreeing with the need for a further adjustment of the value by –25 basis points. According to the Chicago Mercantile Exchange (CME Group) FedWatch Tool, there is a 90.0% chance of a 25-basis-point cut in borrowing costs in November. On Thursday, October 10, the US will release September inflation statistics: forecasts suggest a slowdown in the Consumer Price Index in annual terms from 2.5% to 2.3%, and in monthly terms from 0.2% to 0.1%. At the same time, the Core CPI excluding Food and Energy is expected to remain at the previous level of 3.2%. In turn, on Friday, the UK will present August data on Industrial Production and Gross Domestic Product (GDP): analysts expect the British economy to accelerate by 0.2% after zero dynamics in July, and Industrial Production could add 0.2% after –0.8%. AUD/USD The AUD/USD pair is showing an uncertain decline, developing a strong "bearish" momentum formed last week, when the instrument retreated from the record highs of February 2023, located at 0.6940. Quotes are testing 0.6735 for a breakdown, being under pressure amid the strengthening of the American currency. Late last week, the US dollar responded with a notable rise to the release of the September labor market report, which further dampened expectations for monetary easing at an accelerated pace by the end of the year. Nonfarm Payrolls accelerated from 159.0 thousand to 254.0 thousand versus the forecast of 140.0 thousand, Average Hourly Earnings rose from 3.9% year-on-year to 4.0% but slowed from 0.5% to 0.4% month-on-month, and the Unemployment Rate fell from 4.2% to 4.1%. The day before, the instrument was supported by data from Australia: in September, the TD-MI Inflation Gauge rose from 2.5% to 2.6% in annual terms and from –0.1% to 0.1% in monthly terms, which reduced expectations regarding the easing of monetary policy by the Reserve Bank of Australia (RBA). Those concerns were reinforced later on Tuesday by the release of minutes from the central bank's September 23-24 meeting, where officials noted that the country's current financial and economic conditions were showing little change, with output growth remaining weak despite the June quarter showing Gross Domestic Product (GDP) expanding in line with expectations. Inflation risks remain muted and balanced by a weak pick-up in household consumption, although the RBA expects it to pick up significantly in the second half of the year. USD/JPY The USD/JPY pair is trading with near-zero dynamics, holding at 148.00. The day before, the instrument demonstrated a moderate decline, retreating from its local highs of August 16, which became a natural reaction of the market after the significant strengthening of the American currency last Friday. On October 4, September labor market statistics were released, which further reduced the likelihood of rapid easing of monetary policy by the US Federal Reserve before the end of this year. Nonfarm Payrolls increased by 254.0 thousand after rising by 159.0 thousand (revised from 142.0 thousand) in the previous month, compared to the 140.0 thousand estimate, Average Hourly Earnings accelerated to 4.0% from 3.9% year-on-year, compared to the 3.8% estimate, and the Unemployment Rate slowed down to 4.1% from 4.2%. The day before, some pressure on the position of the American currency was exerted by data on Consumer Credit Change: in August, the indicator sharply decreased from 25.45 billion dollars to 8.93 billion dollars, while analysts expected 12.0 billion dollars. In turn, statistics from Japan, presented yesterday, reflected a decrease in the Leading Economic Index index in August from 109.3 points to 106.7 points with expectations of 107.4 points, and the Coincident Index fell from 117.2 points to 113.5 points. Today, investors are focusing on data from Japan: Labor Cash Earnings in August slowed down from 3.4% to 3.0%, while the market expected 3.1%, Overall Household Spending fell 1.9% after increasing by 0.1%, while preliminary estimates were –2.6%. The Eco Watchers Current Situation Index fell from 49.0 points to 47.8 points in September, while the Forecast for Developments fell from 50.3 points to 49.7 points. XAU/USD The XAU/USD pair shows mixed dynamics, consolidating near the level of 2640.00. Market activity remains subdued, despite the fact that investors continued to evaluate the results of the September US labor market report, published last Friday. Nonfarm Payrolls increased by 254.0 thousand after increasing by 159.0 thousand in the previous month, while analysts expected 140.0 thousand, Average Hourly Earnings accelerated in annual terms from 3.9% to 4.0% with a forecast of 3.8%, but in monthly terms the indicator slowed down from 0.5% to 0.4% with expectations of 0.3%, while the Unemployment Rate decreased from 4.2% to 4.1%. Overall, the report confirmed the resilience of the US economy, which allows the US Federal Reserve to take its time with further monetary easing. It is worth noting that by the end of the current year, market participants are forecasting a 25-basis-point reduction in the interest rate in November and December. Meanwhile, demand for gold is being driven by further escalation of the conflict in the Middle East after Iran launched a massive missile strike on Israel. In turn, the Israeli military-political leadership promised to respond in kind to the attack, which increased tension in the region and acts as a driver of the XAU/USD pair quotes.
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