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Market Update; USD off its highs (1 hour charts)
Currencies react when respective central bank monetary policies diverge or lag. The ECB rate hike today has seen odds increasing for additional rate hikes while the BoJ is a near certainty toi hike next week with more hikes possible. ‘
The AUD, one of the strongest performers recently, is weakest on the FX board as it reacts to the risk off mood.
US500 4 HOUR: On the defensive
Firmer oil, higher bond yields and technicals weighing on US500 where the break of 7610, if it holds below, shows a big void (to around 7300) on the downside.
For bulls, this can still be treated as a retracement while short-term traders see it as a downtrend where a move back above 7610 would be needed to cool the risk.
US PREMARKET MOVERS: FCX, COO, AVAV, M, LEU, TENB
ES -0.2% NQ -0.8% RTY -0.3%
Risk off reaction to about as expected PPI, bond yields up
- US Core PPI (Aug MM) 0.2% vs. Exp. 0.3% (Prev. 0.3%)
- US Core PPI (Aug YY) 4.6% vs. Exp. 4.6% (Prev. 4.3%)
Source: Try Newsquawk free for 7 days
XAUUSD (GOLD) 4 HOUR: 6 days in a row
4400 has now traded 6 days in a row as XAUUSD has been unable to shake a focus from it.
So stay on guard as a break of this pattern would have potential to signal a directional move.
Range over this period has been 4375-4435 with range outside of it at 4341-4442.
Forex Market Snapshot: Calm before the storm
Key events are finally here:
ECB: Will it be a dovish hike, no forward guidance data dependent hike or hawkish hike?
US PPI: Theta was a time when PPI would be ignored in favor of CPI but in the current time there is a hypersensitivity to all inflation data.
COMING UP: Data: German Final CPI (Aug), Norwegian CPI (Aug), Swedish GDP (Jul), US PPI (Aug), Jobless Claims (Sep/05), Existing Home Sales (Aug), Atlanta Fed GDP (Q3).
Events: ECB Announcement, CBRT Announcement, OPEC MOMR.
Speakers: US President Trump; BoJ’s Masu; ECB’s Lagarde. Supply: UK, Italy, US. Earnings: Oracle, Adobe.
Newsquawk US Market Wrap: Stocks hit as oil and yields climb
SNAPSHOT: Equities down, Treasuries down, Crude up, Dollar flat, Gold up.
How Interest Rates Affect Financial Markets and Traders
(Current: US yields slip back, 10 year 4.829%, USD follows, XAUUSD up, US stocks steady)
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