• Saxony August CPI +6.8% vs +6.7% y/y prior
• Bavaria August CPI +5.9% vs +6.1% y/y prior
• North Rhine Westphalia August CPI +5.9% vs +5.8% y/y prior
• Spain August preliminary CPI +2.6% vs +2.6% y/y expected
• ECB’s Centeno: Even if we pause, saying we are done would be the wrong message
• ECB’s Centeno: Growth indicators have been surprising to the downside recently
• BOJ’s Tamura: Timing of easy policy exit must not be too late, but not too early too
• Eurozone August final consumer confidence -16.0 vs -16.0 prelim
• Germany July import price index -0.6% vs 0.0% m/m expected
• UK July mortgage approvals 49.44k vs 51.00k expected
• Switzerland August Credit Suisse investor sentiment -38.6 vs -32.6 prior
• Switzerland August KOF leading indicator index 91.1 vs 91.5 expected
• US MBA mortgage applications w.e. 25 August +2.3% vs -4.2% prior
• Dollar bears looking for that Goldilocks scenario on the US economy

Markets:

• GBP leads, JPY lags on the day
• European equities lower; S&P 500 futures down 0.1%
• US 10-year yields up 3.3 bps to 4.155%
• Gold flat at $1,937.82
• WTI crude up 0.7% to $81.21
• Bitcoin down 0.7% to $27,396

After the sharp moves yesterday, things are looking calmer for now at least in European trading.

The dollar steadied itself as bond yields also find a bit of a footing. But all of this is coming before we get to the US ADP employment roulette data later today.

Among the highlights of the session was CPI data for German states. The early one was for NRW which saw a slight rise in August inflation and that spooked ECB bettors a little. They moved to price in odds of a 25 bps rate hike to ~61% from around ~54% before that.

But after the other mixed readings, the pricing fell to ~51% and is now holding at around ~57%. As such, the euro is also holding steady across the board with EUR/USD little changed at 1.0885 currently.

The dollar is seeing gains more notable against the yen and antipodeans. USD/JPY is up 0.4% to 146.40 as slightly higher yields are helping. Meanwhile, AUD/USD is down slightly by 0.2% to 0.6470 but off its earlier lows of 0.6450 at least.

In the equities space, the mood is more tentative and tepid now as dollar and yields are holding their ground after the fall yesterday.

It’s now over to the ADP number to see if there is reason for the outsized reaction yesterday to take hold again today.

This article was written by Justin Low at www.forexlive.com.

• Prior -4.2%
• Market index 189.0 vs 184.8 prior
• Purchase index 144.9 vs 142.0 prior
• Refinance index 407.1 vs 397.1 prior
• 30-year mortgage rate 7.31% vs 7.31% prior

It’s a minor bump in mortgage activity after five straight weeks of declines. So, that should put things into perspective as housing market conditions continue to be weighed down by higher rates for now.

This article was written by Justin Low at www.forexlive.com.

Yesterday
Bitcoin jumped following the news that Greyscale won the lawsuit against
the SEC as the D.C. court ruled that the SEC improperly rejected the Bitcoin
spot ETF. This was seen as a positive news as Greyscale will have to reapply
for a spot ETF but that an ETF is actually coming. Looking at the bigger
picture though, we have some bearish news all around as CryptoQuant reported
that Bitcoin trading volume is at its lowest in more than four years and on the
macro side we have recessionary fears caused by weakening data as yesterday’s
Job Openings and Consumer Confidence missed expectations by a big margin
possibly pointing to a deterioration in the labour market. On top of that, the
central banks are expected to keep monetary conditions tight even if we start
to see more weakness creeping in, which should ultimately make the economic
conditions and the risk sentiment worse.

Bitcoin Technical Analysis
– Daily Timeframe

On the daily chart, we can see that Bitcoin bottomed
out on the key 25231 support and
after almost two weeks of consolidation it spiked up yesterday following the
news of Greyscale winning the lawsuit again the SEC. The price found resistance
near the previous support now turned resistance where we
have also the confluence with the
61.8% Fibonacci retracement level.
This is where the sellers should step back in with a defined risk above the
level and target another fall into the support and eventually a break lower.

Bitcoin Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can see that now the buyers
will have a strong support zone around the previous swing high at 26800 where
we can also find the 61.8% Fibonacci retracement level of the entire leg higher
and the red 21 moving average. This is
where we can expect the buyers to pile in with a defined risk below the zone
and target another extension to the upside.

Bitcoin Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, we can see that the
price is currently pulling back and from a risk management perspective, both
buyers and sellers should refrain from entering the market here as it’s
basically a no man’s land. The key levels to watch, in fact, are the resistance
at 28300 and the support at 26800.

Upcoming Events

This week is an important one given that we will see
many key labour market data for the US, including the NFP, before the next FOMC
meeting. Weak data is likely to cause recessionary fears across the markets and
weigh on Bitcoin, while strong readings should keep the Fed on the hawkish side
and put a lid on the cryptocurrency’s upside. Today, we have the US ADP report,
and after yesterday’s big miss in the US Job Openings, a weak report is likely
to increase recessionary fears. Moving on to tomorrow, we will see the US
Jobless Claims and the US PCE data. Finally, we conclude the week with the US
NFP and the ISM Manufacturing PMI on Friday.

This article was written by FL Contributors at www.forexlive.com.

• Need to be very cautious about policy decisions
• A lot has already been done

He’s not giving much away but the ECB will have a tough time trying to manage market expectations at this point. Inflation is still keeping rather stubborn and the „safe bet“ would be to raise rates one more time. But if they do skip, expect markets to take that as a sign of pausing especially since the economy is starting to run into the ground now in Q3.

This article was written by Justin Low at www.forexlive.com.