• Stocks can’t hold gains and close down. S&P and NASDAQ have worst week since March
• WTI crude oil futures settle at $90.03
• Stallantis: We have a real soluton on the table
• GM: We do have contingency plans, and will do what’s best for the company, and customers:
• The Fed’s Daly (non-voting member): We are closer to our destination
• Baker Hughes oil rig count versus last week.
• Shawn Fain: Biggest objective now is ending pay tiers
• European indices close mostly lower on the day. UK’s FTSE 100 ekes out a small gain.
• Feds Bowman: Further interest rate increases likely appropriate with inflation still high
• UAW to announce more strikes at GM and Stallantis parts and distribution centers
• Fed Collins: Despite encouraging recent data, inflation remains too high
• S&P global manufacturing PMI flash for September 48.9 versus 48.0 estimate
• ECB’s de Cos: Underlying inflation is now easing
• ECB’s Lane: 4% rate will do quite a bit to bring inflation to 2%
• Kickstart your trading day: A technical look at the EURUSD, USDJPY and GBPUSD
• Canada July retail sales 0.3% versus 0.4% expected
• Canada retail sales will be released at the bottom of the hour.
• The NZD is the strongest and the JPY is the weakest as the North American session begins
• ECB’s de Guindos: Risks to inflation are now balanced
• ForexLive European FX news wrap: Euro, pound drop on PMI misses
• BOJ’s Ueda: Sustainability of wage hikes the most important thing for inflation outlook
• BOJ’s Ueda: Could consider easy policy exit when achievement of 2% inflation is in sight

The NZD and the AUD are ending the day as the strongest of the major currencies. The JPY is the weakest. The latest central bank decision came before the US open, when the Bank of Japan in The rates unchanged but did say that they would consider easy policy exit 1 achievement 2% inflation is in sight and that sustainability of wage hikes the most important thing for the inflation outlook.

The USD end of the day mixed with gains versus the JPY (+0.55%), GBP (+0.45%), CHF and EUR, and losses vs the NZD (-0.49%), the AUD (-0.41%). The greenback was nearly unchanged versus the CAD.

For the trading week, the dollar index closed the week marginally higher by +0.27%. The DXY is a weighted currency index heavily weighted toward the EUR (57.6%), JPY (13.6%) and GBP (11.9%).

Looking at the major indices versus the US dollar, the green was mixed.

The USD was stronger vs the:

• EUR, +0.16%
• JPY, +0.38%
• GBP, +1.15%
• CHF, +1.07%

The USD was weaker vs. the:

• CAD, -0.33%
• AUD, -0.21%
• NZD, -1.08%

Versus the offshore yuan, the USD rose 0.27% this week.

The Federal Reserve this week kept rates unchanged at 5.5%. However, they did keep the additional tightening expectations for 2023, and raise the expected end-of-year rate for 2024 to 5.1% from 4.6% in June.

In the UK, the Bank of England came into the week with market traders expecting a 25 basis point hike. However, after lower-than-expected inflation data on Wednesday, the odds of a hike decreased to 50/50. The Bank of England did keep rates unchanged by a 5 – 4 vote margin. That helped to weaken the pound vs. the USD this week.

The Swiss National Bank was also expected to raise rates by 25 basis points at their quarterly meeting, but they too kept rates unchanged and that helped to weaken its currency versus the US dollar this week.

In the US debt market this week, yields moved higher for the 3rd consecutive week as traders priced in „higher for longer“ for the Fed funds target:

• 2-year yield rose 7.5 basis points to 5.112%
• 5-year yield rose 10.2 basis points to 4.569%
• 10-year yield rose 10.4 basis points to 4.438%
• 30-year yield rose 11.1 basis points to 4.529%

Although the longer end moved up the most, the 2-10-year spread still remains at -67 basis points continuing to signal a recession down the road. The 2 – 10-year spread has been negative since July 2022, reaching a low of -109 basis points in July 2023. Will it ever go positive? If the Fed is higher for longer, the logical way would be for the longer end to go up. The problem is mortgage rates are already up to 7.40%. If the 10-year yield rises another 67 basis points, you are talking about over 8% for mortgage rates all things equal. That would truly send the US economy into a recession which would then lead to lower short-term rates as the Fed is forces to ease.

A recession seems the only way out of the negative yield curve.

In the US stock market this week, the S&P and NASDAQ index had their worst week since March. With the NASDAQ index tumbling by 3.62%. The S&P fell -2.93%.

Crude oil prices this week closed down -0.54% or $-0.48 after extending to the highest level since November 2022 at $92.43.

Spot gold rose $1.37 or 0.07% (call it unchanged). Silver rose $0.52 or 2.276%.

There are some big stories still to be resolved including:

• The auto workers‘ strike
• The potential for a government shutdown at the end of the month

Each of these will get resolved at some point. The question is when and at what cost. Economically, the US PCE data will be released next Friday with core PCE expected to rise by 0.2%.

Adam is back next week. Thanks for your support and tolerance this week. Hope you have a great weekend.

Go Ducks beat the Buffs.

Go Tigers beat the Seminoles.

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

The major US stock indices traded above and below unchanged today in up-and-down trading, but each of the indices is ending the day in the red. A snapshot of the closing levels shows:

• Dow industrial average -106.60 points or -0.31% at 3393.83
• S&P index -9.96 points or -0.23% at 4320.05
• NASDAQ index -12.19 points or -0.09% at 13211.80

For the trading week, all major indices closed lower. The Dow industrial average has now declined 2 of the last 3 trading weeks. The S&P and NASDAQ index closed lower for the 3rd consecutive week.

For the NASDAQ index, the move lower this week was the largest decline since March 6. For the S&P index, it also had its worst week since March 6.

For the trading week:

• Dow industrial average fell -1.89%
• S&P index fell -2.93%
• NASDAQ index fell -3.62%

Hurting the tone in stocks are:

• Higher rates
• Concerns about government shutdown
• Higher energy prices
• Auto strikes
• Increased government debt

Technically, the Dow industrial average, NASDAQ index, and S&P index all our closing week below there 100 day moving averages.

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

The USDCAD traded down and up and down and up and back down and up this week (see hourly chart below). The high price on Monday was retested on Thursday. The low on Tuesday saw the pair, move to and through the 100-day MA (lower blue overlay line on the chart below at 1.3398) but failed. The next test of the 100 day MA on Wednesday, stalled near that level and moved higher.

The up-and-down week is ending with the price between the 100 and 200-hour MAs. The 100-hour MA is at 1.3463 and the 200-hour MA at 1.3497. The price is trading at 1.3482.

In trading next week, traders will take short-term bias clues from the 100 and 200-hour moving averages. If the price breaks higher and above the 200-hour moving average, the highest for the week, near 1.3525 and then the 50% midpoint at 1.3536 would be targeted.

Conversely, if the 100-hour moving average is broken, traders would look toward the low from today’s trading of 1.34214 followed by the 100-day moving average of 1.33985. The low for the week at 1.33778 if broken would open the door further downside momentum.

When the price goes up and down, it implies a market that is unsure of which way he wants to go. Next week we will listen to the technicals, to provide the clues to the story that the market wants to focus.

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

WTI crude oil futures settle at $90.03, up $0.40 or 0.43%. The high for the day reached $91.33. The low was at $89.31.

Brent crude prices settled at $93.27 down $0.03 or -0.03%

For the trading week, the price of crude oil is down marginally by -0.58%.

Looking at the daily chart, the price remains between retracement levels. On the downside, the broken 38.2% retracement of the move down from the June 2022 high, comes in at $86.72. On the top side, the 50% midpoint of the same move down comes in at $93.78. On the wide, those are the support and resistance levels for crude oil

Today the Baker Hughs data showed another decline of -8 oil rigs.

• The crude complex settled slightly stronger after a volatile day.
• This week the modest decline, ended a three-week positive streak due to concerns over Russia’s fuel export ban and potential future rate hikes.
• Kremlin announced the fuel export ban will remain until the fuel market stabilizes.
• WTI and Brent reached highs of USD 91.33/bbl and 94.64/bbl before dropping to lows of 89.31/bbl and 92.80/bbl respectively.

In other news:

• HSBC raised its Brent forecasts, citing:
  • Expected tight oil demand due to extended Saudi voluntary cuts.
  • Anticipation of the cuts lasting until 2024.
  • Continued record Chinese oil demand supporting prices in the near future.

A few Fed governors today expressed concerns toward the price of oil and its impact on inflation. The higher prices could also lead to lower demand, that leads to a correction lower.

Ultimately Time and again, when there is added focus on higher prices, the higher prices lead to lower demand, a slower economy, or often both. The price comes back down.

Then when the price is low, it does the opposite, spurring on more growth and increased demand and utimately higher prices.

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

• Still have not yet received a response to Thursday’s offer
• We have a real solution on the table.
• Offer includes a long-term solution for Belvidere
• The offer includes current full-time employees earning between $80,000 and $96,000 a year by the end of the contract

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

Headlines:

• France September flash services PMI 43.9 vs 46.0 expected
• Germany September flash manufacturing PMI 39.8 vs 39.5 expected
• Eurozone September flash services PMI 48.4 vs 47.7 expected
• UK September flash services PMI 47.2 vs 49.2 expected
• Euro area PMI takeaways
• BOJ governor Ueda: Will not hesitate to take additional easing measures if necessary
• BOJ’s Ueda: Sustainability of wage hikes the most important thing for inflation outlook
• BOJ’s Ueda: Could consider easy policy exit when achievement of 2% inflation is in sight
• The bond market continues to hog the spotlight
• UK August retail sales +0.4% vs +0.5% m/m expected
• UK September CBI trends total orders -18 vs -18 expected
• Spain Q2 final GDP +0.5% vs +0.4% q/q prelim

Markets:

• NZD leads, JPY lags on the day
• European equities lower; S&P 500 futures up 0.2%
• US 10-year yield flat at 4.482%
• Gold up 0.3% to $1,925.47
• WTI crude up 1.0% to $90.57
• Bitcoin up 0.2% to $26,651

It was a relatively lively session as the euro and pound came under the microscope amid the latest PMI data for September.

The French reading disappointed while the German reading reaffirmed a contraction in Europe’s largest economy during the quarter, though the latter was better than expected on the month. That saw a bit of a fall and rise in the euro, with EUR/USD moving down from 1.0665 to 1.0615 before holding around 1.0640-50 currently.

The pound found little comfort from the poor PMI readings, with the BOE already having seen the numbers before choosing to pause yesterday. GBP/USD was already slightly softer on the day before extending a drop from 1.2260 to 1.2235 before keeping around 1.2250 levels now.

The dollar continues to keep in a solid spot, sitting more mixed on the day as it is only lower against the commodity currenies.

The yen was also a feature as BOJ governor Ueda ran back on his remarks on a „quiet exit“ from two weekends ago, and that is seeing further pressure on the currency today. USD/JPY is up 0.5% to 148.25 as higher yields continue to keep the pressure on the yen as well.

In the bond market, the selling is hitting a bit of a pause after the poor PMI data today but nothing too significant. 10-year yields in the US dropped off to around 4.46% but are now back up to 4.48% and that continues to keep equities on edge. European stocks are lower today after the heavy selling in Wall Street yesterday but US futures are at least a little higher but still have to navigate through the US session later.

There will be US PMI also to watch out for and any surprises there could keep things rather interesting towards the end of the week. In that lieu, a downside miss will be of more impact than any upside beat I would say.

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

The snapshot today is that the dollar is down against the commodity currencies but higher against the European currencies and the Japanese yen. The poor PMI data in Europe and UK are proving to be the bane for the euro and pound respectively, while the BOJ failing to walk the talk is weighing on the yen.

In a case of bad news is good news, the continued weakness in the euro area and UK economies are putting a stop to the bond selling and US futures are able to trade more sideways on the session – holding slight gains. That being said, Wall Street tends to have a mind of its own and higher yields in the bigger picture are still a cause for concern for stocks.

EUR/USD is one to keep an eye out for ahead of the weekend, with the pair testing key support at 1.0635 currently:

Meanwhile, USD/JPY is up 0.5% to 148.25 while GBP/USD is down 0.3% to 1.2250 levels at the moment.

The commodity currencies are the ones leading the way today with USD/CAD down 0.2% to 1.3450, helped out by higher oil prices with WTI crude returning above $90. And AUD/USD is also up 0.4% to 0.6440 in what has been a rather back and forth week for the pair – up just a measly 13 pips on the week at its current level.

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

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 CPI came
  in line with expectations, so the market’s pricing remained roughly the same.
• The labour market
  displayed signs of softening although it remains fairly solid as seen also
  yesterday with the strong beat in Jobless Claims.
• The market doesn’t expect the Fed to hike again at
  the moment.

Japan:

• The BoJ kept everything unchanged as expected.
• The Japanese CPI today showed that inflationary
  pressures remain high with the core-core reading hovering at the cycle highs.
• The Unemployment Rate surprisingly increased recently,
  although it remains near cycle lows.
• The Japanese Manufacturing PMI fell further into contraction but
  the Services PMI remains in expansion.
• BoJ governor Ueda repeated that they will not
  hesitate to take additional easing measures if needed and clarified that the
  recent comment on “quiet exit” from monetary easing was misinterpreted.
• The recent Japanese wage data showed a slowing in wage growth,
  and this is something the BoJ focuses on particularly.

USDJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see
that USDJPY remains in an uptrend, but the bullish momentum is clearly waning.
The red 21 moving average
continues to act as dynamic support and the fundamentals keep supporting more
upside for the pair, but it looks like one ugly economic release for the US
could make the pair fall hard to the 145.00 level. For now, the 150.00 level
remains the target for the buyers.

USDJPY Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have a
massive divergence with the
MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we only got pullbacks, but the price action has been
forming what looks like a rising wedge, which
is a reversal pattern. So, this will be something to watch out for.

USDJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price action is very messy and it’s hard to find clear levels to lean on.
Nonetheless, we have two key levels to watch now. A break above the recent high
at 148.47 should see more buyers coming into the market and keep the uptrend
going, while a break below the low at 147.32 should confirm the break of the
rising wedge and lead the pair to the 145.00 support.

Upcoming Events

Today we only have the
Flash PMIs for the US before we head into the weekend. Strong data is likely to
keep the pair supported but weak readings might cause a selloff.

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

• Prior -15

The order books measure is as per estimates, seen falling once again. But adding to the woes of UK manufacturers is that output is seen falling again with the reading at -10 in the three months to September, though slightly improved from the -19 reading in the three months to August (still far below the average of +3). Tough times for the UK economy.

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

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 CPI came
  in line with expectations, so the market’s pricing remained roughly the same.
• The labour market
  displayed signs of softening although it remains fairly solid as seen also
  yesterday with the strong beat in Jobless Claims.
• The market doesn’t expect the Fed to hike again at
  the moment.

New Zealand:

• The RBNZ kept its official cash rate unchanged at the
  last meeting while stating that it will remain at the restrictive level for the
  foreseeable future to ensure that inflation comes down back to target.
• The recent New Zealand inflation and employment data surprised to the upside but
  the PMIs continue to slide further into contraction.
• The wage growth has also missed
  expectations and it’s something that the central banks are watching closely.
• The recent New Zealand Retail Sales beat expectations although the data
  remains deeply negative.
• The RBNZ is expected to keep the
  cash rate steady at the next meeting.

NZDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that NZDUSD has
finally pulled back all the way up to the 0.5987 resistance where it
sold off from following the more hawkish than expected FOMC dot plot. The price
action remains choppy, but the sellers should start coming back into the market
with strength unless the price breaks above the resistance invalidating the
bearish setup.

NZDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see more closely the
strong selloff from the resistance. The price is currently pulling back. Things
are messy at the moment as there’s no clear divergence between central banks as
they are all moving to the sidelines and watching the tightening to day
filtering through the economies.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have a minor resistance at the previous swing high with the 50% Fibonacci
retracement level for confluence. This
is where the sellers should step in with a defined risk above the level and
target another selloff into the 0.5860 support. More conservative sellers might
want to wait for the price to break below the counter-trendline to
pile in and extend the fall into the support.

Upcoming Events

Today the biggest event
will be the Flash PMIs for the US.

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