IC Markets Europe Fundamental Forecast | 16 September 2021
What happened across the Asia session?
Australia’s unemployment change came in much weaker than expected. The drop in unemployment rate was due more to a lack of participation rather than an improvement in the labour market.
What does it mean for the Europe and US Sessions?
Firm oil prices and a backdrop of ongoing tapering puts the Loonie in a position of strength while setbacks in the economic recovery of Australia makes the Aussie weakest among the major currencies.
The Dollar Index (DXY)
Key news events today
Core Retail Sales m/m, 12.30pm GMT
Retail Sales m/m, 12.30pm GMT
What can we expect from DXY today?
Post retail sales figured to be released, the focus would shift to the FOMC meeting scheduled for 21-22 September. The lower-than-expected August jobs report and inflation may push a tapering announcement to the November FOMC meeting, however.
Next 24 Hours Bias
Weak Bullish
Gold (XAU) Update
No major news events.
What can we expect from Gold today?
The lower-than-expected rise in the US CPI raises doubts on Fed to introduce a timeline to taper asset purchases in the upcoming FOMC meeting next week, providing support to the precious metal with the US dollar and Treasury yields under pressure.
Next 24 Hours Bias
Weak Bullish
The Euro (EUR)
Key news events today
ECB President Lagarde Speaks, 12pm GMT
What can we expect from EUR today?
Following dovish comments from fellow policymakers, ECB President Lagarde’s speech is likely to lean more on the side of the doves. ECB’s Lane emphasised that volume of the pandemic emergency purchase programme is not indicative of the central banks stance on monetary policies.
Next 24 Hours Bias
Weak Bearish
The Swiss Franc (CHF)
Key news events today
No major news events.
What can we expect from CHF today?
A light day in terms of currency-specific data should keep the Swissy in a range until the release of the US retail sales figures that could stage another attempt to break above the tested multi-month resistance around the 0.9230 region.
Next 24 Hours Bias
Weak Bearish
The Pound (GBP)
Key news events today
No major news events.
What can we expect from GBP today?
The higher-than-expected CPI reported at 3.2% (expected 2.9%, prev. 2.0%) would be dismissed by the Bank of England as transitory. A persistently high CPI reading for the upcoming reports may alter the central bank’s stance on inflation.
In the central bank’s latest meeting, policymakers were split 4 – 4 between those who felt the minimum conditions for considering an interest rate hike had been met and those who thought the recovery was not strong enough.
Next 24 Hours Bias
Weak Bullish
The Canadian Dollar (CAD)
Key news events today
No major news events.
What can we expect from CAD today?
The latest year-on-year inflation rising to its highest level in nearly 20 years at 4.1% (prev. 3.7%) may force the Bank of Canada to reconsider its stance on inflation being transitory, especially if record high CPI continues to be registered in upcoming reports.
With tapering already in progress, the possibility of a sooner-than-expected rate hike would follow a persistently high CPI data.
Next 24 Hours Bias
Weak Bullish
Oil
Key news events today
No major news events.
What can we expect from Oil today?
According to the US Energy Information Administration, crude stocks fell 6.4m barrels in the week ending 10 September. The deeper-than-expected draw and expectation of a rise in demand as more countries adopt a ‘high vaccination rate’ approach to counter the Delta variant should continue to bode well for the bulls.
Next 24 Hours Bias
Weak Bullish