- USDIndex – Remains bid, holding above 109. The surprisingly hot August CPI report generated a sea-change in policy outlook, while housing starts and existing home sales will be tracked. The housing sector has been a major casualty of the FOMC’s tightening policies. Starts are seen rebounding slightly to a 1.450 mln clip after tumbling -9.6% to 1.446 mln in July. Existing home sales are projected dropping to a 4.685 mln rate following July’s decline to 4.810 mln. A 75 bp boost is a done deal on Wednesday.
- EUR – Trades at 0.9976. Recession risks are increasingly palpable in Europe.
- JPY – down 0.2% at 143.21 – the effect of verbal interventions on the Yen has faded this week. Strong resistance at 145. Japan is on holiday today & Friday. BOJ is expected to maintain the accommodative stance & stick with massive stimulus.
- GBP just under the 1.14 mark. Markets are split on whether the BOE will raise rates by 50 or 75 bps on Thursday and awaiting the government’s fiscal plans as Chancellor Kwarteng is set to unveil a “mini-budget” on September 23. The energy package aside, Kwarteng is expected to unveil cuts to National Insurance payments and the reversal of plans to increase corporation tax from 19% to 25% in April. PM Truss is also preparing a post-Brexit deregulation push and hopes that her measures will boost growth sufficiently to allow the financing of measures in the medium term.
- Stocks in red with ASX and Nikkei having lost -0.3% and -1.1% respectively, while Hang Seng and CSI 300 are down -1.3% and -0.5% at the moment. Reports that the Chinese city of Chengdu reopened after lifting a 2-week lockdown, and a liquidity injection from the PBOC may have helped to put a floor under mainland China bourses at least. The GER40 future is fractionally lower, US futures underperforming, led by a –0.8% correction in the USA100. UK markets will remain closed today for the late Queen’s funeral.
- USOil – at $83.83 next support at $80.
- Gold – slipped on Monday, at $1661 pressured by a strong USD.
- BTC – retests 3-month low at mid $18500 area.
Overnight & Today – EU Construction Output & Japanese CPI.
Biggest FX Mover @ (06:30 GMT) BTCUSD (-4.72%) Sank to 3-month low at 18400 area. MAs aligning lower, MACD histogram & signal line negative & falling, RSI 21, H1 ATR 231.98, Daily ATR 1112.90.
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Andria Pichidi
Market Analyst
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