The poll shows that 64 of 77 economists (~85%) predict the ECB will cut rates by 25 bps at next week’s meeting and then again in December. Four other respondents expect just one 25 bps rate cut for the remainder of the year while eight are seeing three rate cuts in each remaining meeting.

In the August poll, 66 of 81 economists (~81%) saw two more rate cuts for the year. So, it’s not too major a change up in views.

For some context, the ECB will meet next week and then again on 17 October before the final meeting of the year on 12 December.

Looking at market pricing, traders have more or less fully priced in a 25 bps rate cut for next week (~99%). As for the remainder of the year, they are seeing ~60 bps of rate cuts at the moment. Looking further out to the first half of next year, there is ~143 bps worth of rate cuts priced in.

The nearly two-and-a-half rate cuts priced in for the rest of 2024 is going to be an interesting one to keep up with in the months ahead. The ECB seems to be leaning towards a rate cut roughly once in every three months, skipping one meeting. So, that’s what economists are picking up on I guess. For some background: A growing rift at the ECB on the economic outlook?

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

This week the growth fears
came back as the we got a couple of soft US data. Most of the weakness can be
attributed to the ISM Manufacturing PMI which disappointed as it missed
expectations, and the new orders index dropped further into contraction.

Overall, the report was
much better than the prior month, but it looks like the market wants to err on
the defensive side heading into the NFP report tomorrow. We also got the US Job Openings data yesterday, but it was July’s
data which was bad for many other indicators as it looks like short term
factors negatively affected the data.

We are going into the NFP
report with a 50/50 chance of either a 25 bps or 50 bps cut at the upcoming
meeting, so the data tomorrow will decide by how much the Fed is going to cut.

In today’s context though,
weaker labour market data and the prospect of a 50 bps cut might not be enough
to lift the stock market and could actually lead to more downside on
recessionary fears, so that’s something to keep in mind.

Nasdaq
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Nasdaq eventually couldn’t break back above the 19728 level and
sold off into the 18900 level as the US data disappointed the market. The next support is near at 18737 level where we can expect the
buyers to step in with a defined risk below the level to position for a rally
into new highs. The sellers, on the other hand, will want to see the price
breaking lower to increase the bearish bets into the major trendline.

Nasdaq Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price got rejected from the swing low level at 19135. This is
going to be a key level the buyers will need to break to position for a rally
into the downward trendline around the 19500 level. The sellers, on the other
hand, will likely lean on the 19135 level to position for a break below the
18737 level.

Nasdaq Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see the rangebound price action as we await the NFP release. Today we will also
get other labour market data but unless we get big surprises, it’s unlikely to
see a breakout today. The red lines define the average daily range for today.

Upcoming Catalysts

Today we have the US ADP, the US Jobless Claims and the US ISM Services PMI.
Tomorrow, we conclude the week with the US NFP report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

The changes among major dollar pairs are roughly 0.1% or less at the moment. And that exemplifies the more tentative mood that is gripping traders in European morning trade. USD/JPY was again the more volatile pair, dipping to a low of 143.05 before bouncing back to around 143.50 levels now. But outside of that, the moves so far today are extremely guarded as traders are eyeing key US data later on.

US futures are flat and 10-year Treasury yields are also now near unchanged at 3.768% on the day.

All together, it suggests that market players are very much waiting on US data later before committing to anything. We’ll have the ADP employment change, weekly initial jobless claims, and then the ISM services PMI all on the data docket.

Following the reaction to the Bank of Canada and JOLTS job openings yesterday, do expect markets to start moving with more vigour after the data today. And all of this will culminate with the non-farm payrolls report tomorrow of course.

For now, the wait continues. The ADP roulette will be up next first and that is in roughly two hours‘ time.

As an aside, one spot to keep an eye out for is gold as well. The precious metal is up 0.8% to $2,515 today and looks poised again to try and chase a firmer breakout.

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

This week the growth fears came
back as the we got a couple of soft US data. Most of the weakness can be
attributed to the ISM
Manufacturing PMI which disappointed as it missed expectations, and the new
orders index dropped further into contraction.

Overall, the report was much
better than the prior month, but it looks like the market wants to err on the
defensive side heading into the NFP report tomorrow. We also got the US
Job Openings data yesterday, but it was July’s data which was bad for many
other indicators as it looks like short term factors negatively affected the
data.

We are going into the NFP
report with a 50/50 chance of either a 25 bps or 50 bps cut at the upcoming
meeting, so the data tomorrow will decide by how much the Fed is going to cut.

In today’s context though,
weaker labour market data and the prospect of a 50 bps cut might not be enough
to lift the stock market and could actually lead to more downside on
recessionary fears, so that’s something to keep in mind.

S&P 500
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the S&P 500 eventually couldn’t break above the 5665 level and
fell into new lows as the sellers piled in on a key breakout on the lower
timeframe and the ISM Manufacturing PMI missed expectations. There’s not much
we can glean from this chart as the market is just waiting for the NFP report.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the failure to break above the 5665 level and then the break
below the trendline which triggered more selling pressure. The price is now
consolidating between the 5506 and 5560 levels. The buyers will want to see the
price breaking higher to position for a rally into the 5665 level, while the
sellers will look for a break lower to increase the bearish bets into the 5432
level.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see more clearly the rangebound price action as we await the NFP release. Today
we will also get other labour market data but unless we get big surprises, it’s
unlikely to see a breakout today. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we have the US ADP, the US Jobless Claims and the US ISM Services PMI.
Tomorrow, we conclude the week with the US NFP report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.