US:

• The Fed left interest rates unchanged as
  expected.
• The macroeconomic projections were revised higher
  as the economy showed much stronger resilience than expected and the Dot Plot
  showed that the majority of members still expects another rate hike by the end
  of the year with less rate cuts in 2024.
• Fed Chair Powell
  reaffirmed their data dependency but added that they will proceed carefully as
  they are trying to find the optimal level of rates. Powell also added that the
  soft landing is not the base case at the moment, although they are aiming for
  it.
• The latest US Core PCE
  came
  in line with expectations with disinflation continuing steady.
• The labour market
  displayed signs of softening although it remains fairly solid as seen also last
  week with a strong beat in Jobless Claims.
• The ISM Manufacturing PMI beat
  expectations yesterday in another sign that the US economy remains resilient.
• The market doesn’t expect the Fed to hike again at
  the moment.

Australia:

• The
  RBA kept interest rates unchanged as expected as they are seeing inflation
  returning to target with the current level of interest rates.
• The
  latest monthly CPI showed that core inflation is
  slowing.
• The
  labour market is weakening as we got a big miss
  in July and the bulk of jobs added in August were part time.
• The
  Australian Manufacturing PMI fell further into contraction while
  the Services PMI jumped back into expansion.
• RBA
  Governor Lowe in his speech reaffirmed that if inflation remains sticky, they
  will have to tighten more.
• The
  market expects the RBA to hold rates steady at the next meeting as well.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the AUDUSD pair
got rejected from the 0.65 resistance again
and sold off into the support, ultimately breaking it. The target for the
sellers should be the 2022 low around the 0.6168 level. For now, we can expect
the pullbacks to be faded as the sellers remain in control.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the pair is
now a bit overstretched on the downside as depicted by the distance from the
blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move. In fact, we might see a pullback into the
broken support turned resistance which
could end up in a classic “break and retest” pattern. This is where we can
expect the sellers to step in with a defined risk above the resistance to
target the 0.6168 level. The buyers, on the other hand, will want to see the
price breaking above the resistance to start targeting the 0.65 level again.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have a trendline that
might act as resistance in case the bearish momentum proves to be strong. That
will be the first shorting point for the sellers, with the resistance around
the 0.6370 being the last line of defence. The buyers should pile in at every
break, but they will need the price to rally above the 0.6380 level to
invalidate the bearish setup and target the 0.65 resistance.

Upcoming Events

This week we have many key economic releases that will
culminate in the US NFP report on Friday. Today, we will have the US Job
Openings data which led to a strong rally the last time as the big miss made
Treasury yields to fall due to less labour market tightness and less hawkish
Fed expectations. Tomorrow, it will be the time for the ADP report and the ISM
Services PMI. On Thursday, we will see the Jobless Claims data, which continues
to show a solid labour market. Finally on Friday, it will be the time for the
NFP report which is the only one the Fed will see before its next rate
decision.

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

• Dollar stays poised so far in European trading
• Equities hit the skids as higher yields is still the name of the game
• Gold stays in retreat, set for sixth straight day of losses
• Japan finance minister Suzuki: Closely watching FX moves with strong sense of urgency
• Japan’s Matsuno says closely watching FX moves with a high sense of urgency
• Eurozone September final manufacturing PMI 43.4 vs 43.4 prelim
• UK September final manufacturing PMI 44.3 vs 44.2 prelim
• UK September Nationwide house prices 0.0% vs -0.4% m/m expected
• Switzerland September manufacturing PMI 44.9 vs 40.5 expected
• SNB total sight deposits w.e. 29 September CHF 476.3 bn vs CHF 475.1 bn prior

Markets:

• CHF leads, AUD lags on the day
• European equities lower; S&P 500 futures flat
• US 10-year yields up 5.4 bps to 4.628%
• Gold down 0.7% to $1,835.49
• WTI crude up 0.9% to $91.61
• Bitcoin up 5.3% to $28,319

It’s a new week, month, and quarter but we’re getting the same old brand new theme in markets. The US government has averted a shutdown for now and equities gapped higher while bond yields surged to start the day.

But as has been the case over the past few weeks, there is always only room for one to be right and surprise, surprise.. It was the bond market again.

Higher yields continue to be the bane for equities while proving to be the boon for the US dollar.

The greenback surged higher across the board with USD/JPY continuing to stay within touching distance of the 150.00 mark, despite verbal intervention efforts by Japanese officials.

Meanwhile, EUR/USD is down 0.3% to 1.0530 levels while GBP/USD is down 0.3% to 1.2150 levels currently. The commodity currencies aren’t able to find much relief as well amid a turn in risk sentiment during the session. AUD/USD is the laggard, down 0.6% to 0.6395 at the lows for the day now.

As higher yields remain the name of the game, stocks are finding it tough to sustain any rallies today – especially now after month-end and quarter-end are done with. US futures were up around 0.7% initially but have all but pared those gains with S&P 500 futures now sitting down 0.1% on the day.

In the commodities space, it’s also the same old story with gold dropping lower amid higher yields while oil is the only one able to go toe to toe with the dollar it would seem.

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

Last week, the market remained under pressure as
the more hawkish than expected FOMC dot plot was
still fresh in everyone’s mind. The economic data continues to support the
soft-landing narrative with Jobless Claims showing
a solid labour market and Core PCE trending
downwards. The last day of the week, we got a small bounce across the board as
the market took a breather after the heavy selloff after the FOMC meeting. We
will see if it was just a pullback or the start of a new rally.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite rallied back above the key support formed
by the trendline and the
38.2% Fibonacci retracement level.
Is this just a pullback and we’ll another selloff or the market is turning
around? The buyers are likely to keep piling in around here with a defined risk
below the support, while the sellers will want to see the price breaking lower
again to jump onboard and ride the fall into the 12274 level.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the bounce
back above the support got rejected at the red 21 moving average and the
38.2% Fibonacci retracement level. This is the resistance that the buyers will
need to break to start targeting the downward trendline around the 13800 level.
The sellers, on the other hand, will keep on leaning on the moving average to
position for further downside.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price has been diverging with
the MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, the price broke above the trendline, and the moving
averages crossed to the upside, which might be an early signal of a reversal.
The buyers should pile in here with a defined risk below the support to
position for a rally into the downward trendline around the 13800 level. The
sellers, on the other hand, will want to see the price breaking below the
support again to pile in and ride the selloff into the 12274 level.

Upcoming
Events

This week we have many key economic releases that will
culminate in the NFP report on Friday. Today, we will see the latest ISM
Manufacturing PMI. Tomorrow, we will have the Job Openings data which led to a
strong rally the last time as the big miss was interpreted as a good thing due
to less labour market tightness and less hawkish Fed. On Wednesday, it will be
the time for the ADP report and the ISM Services PMI. On Thursday, we will see
the Jobless Claims data, which continues to show a solid labour market. Finally
on Friday, it will be the time for the NFP report which is the only one the Fed
will see before its next rate decision.

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

It’s not a good look for equities now as US futures pare almost all of its earlier gains, despite even getting help from a gap higher at the open. European indices are also now all in the red, with the Eurostoxx down roughly 0.3% currently. It once again highlights the fact that the bond market is in charge of proceedings and traders are back to focusing on that after month-end and quarter-end last week.

10-year Treasury yields are up nearly 6 bps to 4.63% at the moment and threatening a further push higher amid the breakout since the middle of last month. That in turn is also underpinning the US dollar, as the greenback leads the charge across the board.

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

The dollar is sitting higher on the day now, only trailing behind the Swiss franc. The greenback continues to be in a firm spot as Treasury yields are holding at the highs, with 10-year yields now nearly 6 bps to 4.63% on the day. With month-end and quarter-end flows out of the way, the dollar is starting to look ripe again as things turn back into its favour.

EUR/USD is down 0.3% to 1.0540 and breaking back below its 100-hour moving average (red line), after having seen sellers defend a bounce at the 200-hour moving average (blue line) on Friday last week. This now sees sellers regain near-term control and will be poised to try and retest the 1.0500 mark again.

Elsewhere, USD/JPY is also keeping near the highs for the day at 149.70 despite Japan intervention fears while AUD/USD is down 0.6% to just under 0.6400 again as risk trades are also starting to hit the skids now on the session.

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

Last week, the market remained under pressure as
the more hawkish than expected FOMC dot plot was
still fresh in everyone’s mind. The economic data continues to support the
soft-landing narrative with Jobless Claims showing
a solid labour market and Core PCE trending
downwards. The last day of the week, we got a small bounce across the board as
the market took a breather after the heavy selloff after the FOMC meeting. We
will see if it was just a pullback or the start of a new rally.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones
bounced around a key support at the
33622 level and pulled back into the blue 8 moving average before
falling back into the support. The sellers would have undoubtedly a better risk
to reward setup if the price rallied all the way back into the downward trendline where we
can also find the 61.8% Fibonacci retracement level.
For now, the sellers remain in control and the buyers will need to break some
key levels before turning the trend around.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a
strong resistance around the 34000 level where we have also the confluence with the
red 21 moving average and the 38.2% Fibonacci retracement level. If the price
rallies into that resistance again we can expect the sellers stepping in with a
defined risk above the resistance to target the 32597 level. The buyers, on the
other hand, will want to see the price breaking higher to position for a rally
into the trendline.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
Dow Jones seems to be consolidating around the 33622 support and we can expect
the buyers to keep piling in around here with a defined risk below the low to
target the trendline. If the price breaks below the low, the sellers should
jump onboard and ride the selloff into the next support around the 32597 level.

Upcoming Events

This week we have many key economic releases that will
culminate in the NFP report on Friday. Today, we will see the latest ISM
Manufacturing PMI. Tomorrow, we will have the Job Openings data which led to a
strong rally the last time as the big miss was interpreted as a good thing due
to less labour market tightness and less hawkish Fed. On Wednesday, it will be
the time for the ADP report and the ISM Services PMI. On Thursday, we will see
the Jobless Claims data, which continues to show a solid labour market. Finally
on Friday, it will be the time for the NFP report which is the only one the Fed
will see before its next rate decision.

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

UPCOMING EVENTS:

• Monday: BoJ
  Summary of Opinions, Swiss Retail Sales, Eurozone Unemployment Rate, US
  ISM Manufacturing PMI.
• Tuesday: RBA
  Policy Decision, Swiss CPI, US Job Openings.
• Wednesday: RBNZ
  Policy Decision, Eurozone Retail Sales, Eurozone PPI, US ADP, US ISM
  Services PMI.
• Thursday: US
  Challenger Job Cuts, US Jobless Claims.
• Friday: Japan
  Wage data, Swiss Unemployment Rate, US NFP, Canada Jobs report.

Monday

The Eurozone Unemployment Rate is expected
to remain unchanged at 6.4%. The labour market remains tight and central
banks would like to see it softening to have more confidence on a timely and
sustainable achievement of their inflation targets.

The US ISM Manufacturing PMI is expected
to tick higher to 47.7 vs. 47.6 prior. As a reminder, the S&P
Global US Manufacturing PMI beat expectations,
although it remains in contraction, and overall the comments point to stagnation
in activity.

Tuesday

The RBA is expected to keep the cash rate
unchanged at 4.10%. The RBA expected headline inflation to pick up in Q3 due to
higher energy prices and highlighted that the labour market could be at a
turning point. Indeed, the latest
labour market report was lacklustre as the
bulk of jobs added were part time and the latest monthly
CPI showed a pick up in headline inflation
with the Core measure decreasing.

The US Job Openings will be one of the
top releases this week as the big
miss in the previous month caused some notable moves in the markets due to the focus on the labour market data. The consensus
sees Job Openings to remain basically unchanged for August at 8.83M vs. 8.827M
for July.

Wednesday

The RBNZ is expected to keep the Official
Cash Rate unchanged at 5.50%. The central bank is confident that with the
current level of interest rates inflation will return to target and it’s ready
to look through some strength in the data in the near term as communicated in
the latest
policy statement.

The US ADP is a labour market report and
as such it has the potential to move the markets. The consensus sees 160K jobs
added in September compared to 177K prior.

The US ISM Services PMI is expected to
tick lower to 53.6 vs. 54.5 prior. The latest S&P
Global US Services PMI missed expectations,
although the index remained in expansion. Again, the comments pointed to
contracting demand and waning activity.

Thursday

The US Jobless Claims data continues to be
one of the top releases each week as the focus has now turned more towards the
labour market. Last week, the data
beat expectations again in a sign that
the labour market remains solid for now. There’s no consensus at the moment,
but keep an eye on it as it remains a key labour market report.

Friday

The Japanese wage data is going to be
important for the BoJ as the central bank continues
to repeat that it wants to see a
solid growth in wages to be confident on a sustainable achievement of their
inflation target and the consequent exit from monetary easing.
Notably, the data has been trending lower in the past few months.

The US NFP is expected to show 163K jobs
added in September compared to 187K seen in August and the Unemployment Rate to
tick lower to 3.7% vs. 3.8% in the prior month. The Average Hourly Earnings
will also be a key metric to watch with the yearly growth seen at 4.3% vs. 4.3%
prior and the monthly one at 0.3% vs. 0.2% prior. Also, watch out for the revisions as the prior months continue to be revised downwards.

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

• Manufacturing PMI 50.2 vs 50.0 (prior 49.7)
• Non-manufacturing PMI 51.7 vs 51.5 expected (prior 51.0)

The official manufacturing PMI is the important one and it rose above 50 for the first time since March 2023. That line signals expansion/contraction, so while it’s a small beat on expectations, it’s an important one.

Notably, China is on holiday all next week.

This article was written by Adam Button at www.forexlive.com.

USDJPY:

GBPUSD:

USDCAD:

AUDUSD:

NZDUSD:

This article was written by Greg Michalowski at www.forexlive.com.

• US August core PCE +3.9% y/y vs +3.9% expected
• Canada GDP month-to-month for July 0.0% versus 0.1% estimate
• US advanced good trade balance for August -84.27B versus $-91.4 billion estimate
• US August advanced wholesale inventories -0.1% versus -0.2% prior
• September final UMich US consumer sentiment 68.1 vs 67.7 expected
• Baker Hughes US oil rig count 116 vs 118 prior
• Feds Williams: Fed is at or near peak for federal funds rate
• OPEC+: Ministerial panel unlikely to recommend output policy change at October 4 meeting
• EIA: US overall crude oil production up 0.7% to 12.99M BPD in July. Highest since Nov 2019
• Canada July budget deficit of C$4.86 billion vs $3.87 billion a year ago
• UAW to expand strike against Ford and GM
• ECB’s Villeroy: Recent volatility in long bonds has been somewhat excessive
• US Senator Dianne Feinstein has died at 90 – report

Markets:

• Gold down $16 to $1848
• WTI crude oil down 78-cents to $90.93
• US 10-year yields down 0.2 bps to 4.57%
• S&P 500 down 12 points to 4288
• AUD leads, CAD lags

The quarter ended with some drama as the US dollar shot higher, recouping losses from European and Asian trading and in some cases making new highs. USD/CAD was particularly strong as oil prices reversed lower to finish the week flat.

Once again, Treasury yields turned higher after an early slide. That took down equity markets, which finished largely flat after a strong open.

The reasons for the moves were more to do with quarter-end flows than fundamentals as the inflation numbers in the PCE report were slightly soft and Williams tilted dovish.

Gold was battered once again in a fall to the lowest since mid-March.

The US dollar had been much softer going into North American trade but it gained strongly and broadly to finish largely unchanged on the day. That wraps up trading for the week, month and quarter. I’ll have the October seasonals up on the weekend so check in.

Have a great weekend.

This article was written by Adam Button at www.forexlive.com.