Posted at 22 September 2022 / Categories Market Roundups
•French Sep Business Survey 102, 102 forecast, 104 previous
•SNB Interest Rate Decision (Q3) 0.50%, 0.50% forecast, -0.25% previous
•Belgium Sep Consumer Confidence -27, -11 previous
•UK Sep BoE Interest Rate Decision 2.25%,2.25% forecast, 1.75% previous
•UK Sep BoE MPC vote cut 0, 0 forecast, 0 previous
•UK Sep BoE MPC vote hike 9,9 forecast,9 previous
• US Continuing Jobless Claims 1,379K,1,400K forecast, 1,403K previous
• US Jobless Claims 4-Week Avg. 216.75K, 224.00K previous
• US Initial Jobless Claims 213K, 218K forecast,213K previous
• Canada Aug New Housing Price Index (MoM) 0.1%, 0.1% previous
• US Current Account (Q2) -251.1B, -260.6B forecast, -291.4B previous
Looking Ahead - Economic Data (GMT)
•14:00 US Aug Leading Index (MoM) -0.1% forecast, -0.4% previous
•14:30 US Natural Gas Storage 93B forecast,77B previous
•15:00 US KC Fed Manufacturing Index -9 previous
•15:00 US Sep KC Fed Composite Index 3 previous
Looking Ahead - Economic events and other releases (GMT)
•No events ahead
EUR/USD: The euro recovered from 20 year low versus the dollar on Thursday as investors digested rate hike from the U.S. Federal Reserve, Swiss central bank, and Bank of England. U.S. Federal Reserve raised rates by 75 basis points and flagged a steeper than expected tightening path at its upcoming meetings. The Fed foresees its policy rate rising at a faster pace and to a higher level than previously expected, the economy slowing to a crawl, and unemployment rising to a degree historically associated with recessions. Other central banks are continuing to raise rates, with the Bank of England on Thursday increasing its key interest rate to 2.25% as expected. The European common currency rose around 0.43% to 0.9878, its highest since Sep 6th, and well up from a 20-year trough of $0.9862 hit last week. It was last up 0.88% at $1.01345. Immediate resistance can be seen at 0.9938(38.2%fib), an upside break can trigger rise towards 0.9970(9DMA).On the downside, immediate support is seen at 0.9812 (23.6%fib), a break below could take the pair towards 0.9800(Psychological level).
GBP/USD: Sterling rose against dollar on Thursday after Bank of England raises rates despite likely recession. The Bank of England raised its key interest rate to 2.25% from 1.75% on Thursday and said it would continue to "respond forcefully, as necessary" to inflation, despite the economy entering recession. The BoE estimates Britain's economy will shrink 0.1% in the third quarter partly due to the extra public holiday for Queen Elizabeth's funeral which, combined with a fall in output in the second quarter, meets the definition of a technical recession. The BoE move follows the U.S. Federal Reserve's decision on Wednesday to raise its key rate by three quarters of a percentage point, as central banks worldwide grapple with post-COVID labour shortages and the impact of Russia's invasion of Ukraine on energy prices. Immediate resistance can be seen at 1.1377(5DMA), an upside break can trigger rise towards 1.1492(38.2%fib).On the downside, immediate support is seen at 1.1242(23.6%fib),a break below could take the pair towards 1.1221(Lower BB).
USD/CHF: The dollar strengthened against the Swiss franc on Thursday as Swiss franc tumbled after the central bank raised rates by 75 basis points. Switzerland exited the era of negative interest rates on Thursday when its central bank joined others around the world in tightening monetary policy more aggressively to combat resurgent inflation.The Swiss National Bank (SNB) raised its policy interest rate by 0.75 of a percentage point, ending the country's seven-and-a-half year experiment with negative rates which sparked opposition from its financial sector and fears of asset bubbles. The increase to 0.5%, from minus 0.25%, followed a 50 basis point hike in June from minus 0.75%. Immediate resistance can be seen at 0.9831 (23.6% fib), an upside break can trigger rise towards 0.9900(Psychological level).On the downside, immediate support is seen at 0.9739 (38.2% fib), a break below could take the pair towards 0.9666 (50%fib% fib).
USD/JPY: The dollar declined against yen on Thursday after Japanese authorities intervened in the foreign exchange market to shore up the battered currency for the first time since 1998, although trading was choppy. Confirmation of the intervention came hours after the BOJ decided to maintain low interest rates to support the country's fragile economic recovery.BOJ Governor Haruhiko Kuroda told reporters the central bank could hold off on hiking rates or changing its dovish policy guidance for years. The dollar was last down 1.17% at 142.42 yen . It hit a low of 140.31 after the intervention, having earlier reached a fresh 24-year peak of 145.9 yen. Strong resistance can be seen at 143.21(23.6%fib), an upside break can trigger rise towards 145.81(Daily high).On the downside, immediate support is seen at 140.50(38.2%fib), a break below could take the pair towards 138.33(50%fib).
European shares fell on Thursday, with tech stocks sliding after the U.S. Federal Reserve delivered another jumbo-sized interest rate hike and signalled more increases in its fight against stubbornly high inflation.
At (GMT 12:30 ),UK's benchmark FTSE 100 was last trading down at 0.16 percent, Germany's Dax was down by 0.55 percent, France’s CAC finished was down by 0.64 percent.
Gold prices steadied on Thursday, as a pullback in the dollar helped bullion to counter pressure from elevated U.S. bond yields and hawkish remarks on future rate hikes from the Federal Reserve.
Spot gold was flat at $1,673.19 per ounce by 1211 GMT, after dropping as much as 1% in the Asia session.U.S. gold futures edged 0.3% higher to $1,681.50.
Oil rose on Thursday as the prospect of higher Chinese demand and heightened geopolitical risks outweighed recession fears after a flurry of central bank interest rate hikes, including from the Bank of England.
Brent crude futures were up 70 cents, or 0.78%, to $90.53 per barrel by 1054 GMT, while U.S. West Texas Intermediate (WTI) crude was up 71 cents, or 86%, at $83.65.