Today’s calendar features many important US data including CPI Inflation and Consumer Confidence for September. Yesterday’s data from the US (Retail Sales) was weaker than expected which added to concerns about the FED not raising rates this year at all. Financial markets are now pricing a 10% probability of a rate hike on September21st and 50% for December. Moreover, the BoE and SNB both kept their policies unchanged, however in the case of the BoE, it left the door open to further rate cuts this year, something that put pressure on the GBP.
Currencies: Dollar is mixed as the markets continue to scale down expectations of a rate hike next week. The weakest currencies this weak remain the CAD, which is pushed lower by declining oil prices. GBPUSD has also been under severe pressure as the BoE signaled further rate cuts this year. EURUSD reached a session high of 1.1283 before settling now at 1.1240. Overall, ranges are tight, and no clear direction is yet being determined. Focus will turn to this afternoons US data releases before next weeks FED decision.
Stocks: US Stocks finished higher yesterday, inspired by a rally in Apple Stocks: Dow Jones closed 1% higher, same as the SP500, while Nasdaq closed 1.5% led by technology stocks. Asian stocks followed suit, as Nikkei closed 0.5% higher while the ASX in Australia was up 1.1%
Oil and Gold: Oil prices suffered another day of losses, as Nigeria and Libya said they will increase their output, something that will likely impact prices downwards. On the New York Mercantile Exchange, light, sweet crude futures traded at $43.61 a barrel, down 30, or 0.7%. Brent crude on London’s ICE Futures exchange fell 33 cents, or 0.7%, to $46.26 a barrel. Gold prices fell to a 2-week low of $1313 as uncertainty over the FED decision next week, led to investors liquidating their positions. Gold faces a strong support at $1304 and strong resistance lies at $1333.
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