• „In monetary policy making, uncertainty tends to lead to policy paralysis,“
• „If it’s a full government shutdown, then you don’t really get any of the government data,“

• „And so if we’re lacking data that the Fed can officially sink its teeth into, then that’s going to lead to an inability to make a decision about the path for rates. The lens of the Fed becomes foggy.“

The comments are from MS‘ Ellen Zentner in a Bloomberg TV interview.

Congress will shut down next weekend a deal is not struck. Hardline Republicans are calling for tighter spending controls, a significant hurdle in reaching an agreement to get the legislation passed.

This article was written by Eamonn Sheridan at www.forexlive.com.

Last week the Fed kept interest rates unchanged as
expected while striking a hawkish tone via the Dot Plot. In fact, the Fed not
only sees another rate hike by the end of the year, but also much less rate
cuts by the end of 2024. Fed Chair Powell has also
admitted that the soft-landing scenario is not his base case at the moment and
stronger than expected economic data may require additional tightening. For
now, the economic data remains strong with Jobless Claims crushing
expectations last week, which is not what the Fed wants to see.

Nasdaq Composite
Technical Analysis – Daily Timeframe

On the daily chart, we can see that we had a big
selloff following the FOMC meeting and the Nasdaq Composite has now reached a
key support zone
around the 13174 level where we have the confluence with the
major trendline and the
38.2% Fibonacci retracement level.
This is where we can expect the buyers to step in with a defined risk below the
trendline to position for a rally into the highs.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the Nasdaq
Composite broke out of the bearish flag defined
by the minor counter-trendline, and fell all the way down to the support level.
The target for the pattern is generally the equal extension of the first leg
which stands roughly around the major trendline. At this point, the sellers
will want to see the price breaking below the trendline to pile in with even
more conviction and extend the fall into the 12274 support.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that in
case we get a bounce around the support or the trendline, the sellers will have
an opportunity to sell the pullback around the black trendline where they will
have the confluence with a previous swing level, the Fibonacci retracement levels
and the red 21 moving average. The
buyers, on the other hand, will want to see the price breaking above the trendline
to invalidate the bearish setup and position for a rally.

Upcoming
Events

This week is pretty bare on the data front with just a
couple of notable economic releases. Tomorrow, we will get the latest US
Consumer Confidence report while on Thursday we will see again the US Jobless
Claims data. On Friday, we conclude the week with the US PCE data.

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

• S&P says pronounced downturn in labour market could push eurozone economy into recession
• ICYMI – HSBC have boosted its Brent oil forecasts higher for 2023 an 2024
• Dow Jones Technical Analysis – Key trendline got breached
• HSBC cut its forecast for China GDP growth in 2023 and 2024 – see the PBOC easing further
• Japan PM Kishida says excessive FX moves are undesireable
• Japan PM Kishida says on Tuesday he’ll instruct ministers to prepare an economic package
• US equity index futures getting smashed in Europe morning time
• Barclays month end rebalancing model is expecting solid US dollar buying
• Russell 2000 Technical Analysis – Key support got breached
• Germany’s 10-year bond yield rises to its highest since July 2011
• News wires reporting that the Russian government approves tweaks to fuel export ban
• Germany September Ifo business climate index 85.7 vs 85.2 expected
• ECB Villeroy: rates says should remain at this level for sufficiently long period of time
• Bank of Japan Gov Ueda says the Bank won’t directly target FX in guiding monetary policy
• ECB’s De Cos says must avoid both insufficient and excessive tightening
• ECB Villeroy: risk of doing too much & risk of doing too little now symmetrically balanced
• Coal mine fire in Southern China’s Guizhou Province kills 16 people
• Gold Technical Analysis – The uncertainty remains very high
• Bank of Japan Governor Ueda says important for FX to move stably reflecting fundamentals
• European Central Bank’s Kazaks says Bank’s hike in September may allow a pause in October
• BOJ Dep Gov Uchida says need to closely watch FX markets
• More from Bank of Japan Governor Ueda: Aware of the impact of weak yen on firm earnings
• Brent oil price could surge as high as US $150 / barrel says JP Morgan
• Goldman Sachs says in the middle of the worst seasonal equity period of the year right now
• S&P 500 Technical Analysis – Key levels in play
• ECB speakers for Monday 25 September include Villeroy, Schnabel, and President Lagarde
• Bank of Japan Governor Ueda speech, full text. Patiently maintaining monetary easing.
• Beijing-based developer China Oceanwide Holdings declared bankrupt in Bermuda
• Singapore August inflation data: Headline CPI +4.0% y/y (expected was also +4.0%)
• FT reports that a senior Nomura banker has been banned from leaving mainland China
• FX option expiries for 25 September at the 10am New York cut
• Trade ideas thread – Monday, 25 September 2023 – Europe / UK session
• Forexlive Asia-Pacific FX news wrap: China property worries return

Rising
yields once again sent equity indexes lower. After a small gain
during Asia time US equity indexes tumbled sharply lower during the
European morning. The USD rose, most notably against EUR, GBP, CHF
and JPY. AUD, NZD and CAD didn’t drop nearly as much.

Data
flow was very light. We did get the September update for the German
Ifo indexes, still at very subdued levels.

There
were plenty of central banker comments, Villeroy, de Cos, and Kazaks
from the European Central Bank while Bank of Japan Governor Ueda
and Deputy Governor Uchida hit the news wires also. Ueda and Uchida
made some remarks aimed at supporting the yen. They were joined by
Japanese Prime Minister Kishida attempting the same. USD/JPY shrugged
all of it off to trade higher.

US equity index futures were slammed lower:

This article was written by Eamonn Sheridan at www.forexlive.com.

Reuters conveying just the headline with not further detail at this stage.

This article was written by Eamonn Sheridan at www.forexlive.com.

• forecast is $90/bbl in Q4 2023
• forecast is $82.50 for the 2024 year, that’s up $7.50

Citing:

• Oil demand from China will continue to support the price
• Saudi supply cuts will remain unit Q2 2024

This article was written by Eamonn Sheridan at www.forexlive.com.