• Dollar loses a bit of ground in European morning trade
• US holiday won’t do markets much good today
• Central bank policy decisions in focus this week
• ICYMI: China president Xi is expected to skip upcoming G20 summit
• Eurozone September Sentix investor confidence -21.5 vs -20.0 expected
• Germany July trade balance €15.9 billion vs €18.0 billion expected
• Switzerland Q2 GDP 0.0% vs +0.1% q/q expected

Markets:

• GBP leads, JPY lags on the day
• European equities higher; S&P 500 futures up 0.1%
• Gold flat at $1,939.05
• WTI crude flat at $85.58
• Bitcoin up 0.5% to $25,875

It was a quiet one in Europe today as markets are also taking a bit of a light breather with it being a US and Canadian holiday.

The main story on Friday was a sudden rebound in Treasury yields and with the key market closed today, we’ll have to wait until tomorrow for further clues.

As such, major currencies could only rely on equities and the general risk mood for direction. A slight nudge higher in stocks in Europe is helping to see the dollar pinned a little lower but nothing too significant.

EUR/USD moved up from 1.0780 to 1.0800 while GBP/USD nudged up from 1.2610 to 1.2640 but both pairs are still holding below key technical levels that broke on Friday. The former is still below its 200-day moving average at 1.0817 while the latter is still below its 100-day moving average at 1.2650 currently.

There wasn’t much appetite elsewhere with USD/JPY keeping flattish after the turnaround on Friday, still above 146.00 today. With the Treasuries market out, there’s really not much to work with today.

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

It’s
increasingly evident that the market is taking the weaker labour market data as
good news for inflation and the soft-landing scenario. In fact, last week we
got many big misses heading into the NFP report, but the US Jobless Claims
showed that the labour market is still fine and the NFP beat
expectations. We have also got a jump in the unemployment rate, but it was
accompanied by a rise in the participation rate and the average hourly earnings
surprised to the downside, which is another good news for inflation. The market
doesn’t expect the Fed to hike anymore, so the next stop might be the rate
cuts. Historically though, the market falls when the Fed starts to cut rates
because those generally come in response to a recession.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite bounced strongly on the key 13174 support and
rallied all the way back to test the broken trendline. The
price is now struggling a bit around the trendline, but the trend has turned
more bullish as the price has been printing higher highs and higher lows and
the moving averages have
crossed to the upside.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we had a
strong resistance around the trendline where we had the confluence of the
previous support turned resistance and the
61.8% Fibonacci retracement level.
The breakout opened the door for higher prices and the buyers are likely to
pile in here with a defined risk below the support to target the 14659 high.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
recently got a pullback into the resistance turned support where we can expect
the buyers to step in. If the price fails to bounce on the support zone and
continues lower, then we can expect the sellers to pile in to extend the fall
into the minor trendline around the 13800 level. If the price then breaks
through that trendline as well, it will open the door for a selloff into the
13174 support.

Upcoming
Events

Today is the US Labor Day
so the markets will be closed. This week is pretty empty on the data front with just
the US ISM Services PMI scheduled for Wednesday and the US Jobless Claims on
Thursday. The market has shown strong resilience to weaker data in the past
weeks and it’s hard to tell how much bad the data needs to be to bring it down.
One thing that held pretty well is the US Jobless Claims, so much worse than
expected readings might trigger a selloff.

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

The two big ones to watch this week are the RBA (tomorrow) and the BOC (Wednesday). Both major central banks are expected to keep their respective policy rates unchanged at 4.10% and 5.00% respectively.

For the RBA, this will be Philip Lowe’s last policy meeting as governor before handing over the post to Michele Bullock from September onwards. The latest developments and language guidance have steered markets accordingly to not expect a rate hike for tomorrow. The odds priced in are ~99% for no change.

Meanwhile, the BOC is facing a tough challenge as economic conditions are starting to take a noticeable hit recently. That is enough to convince traders not to expect any more rate hikes by the central bank, with odds of a no change decision this week at ~98% currently. According to the OIS market, we are at peak interest rates in Canada but traders have not gotten too aggressive to price in any rate cuts just yet with the earliest hint only coming in October next year.

There will be bigger fish to try later this month in relation to the central bank bonanza. So, the two this week aren’t really expected to be too impactful for markets and broader sentiment in general.

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

Veloce, the world’s
largest digital racing media network, has just launched (10am UTC) its
governance and utility token, VEXT, exclusively on ByBit, one of the global top
leading centralized exchanges.

Users
can head over to ByBit now so they don’t miss out on the exclusive rewards and
bonuses up for grabs! Users who don’t have a ByBit account can sign up now!

This is
a defining moment where users have the opportunity to be part of shaping the
VEXT future. Veloce appreciates the support of all its users; more exciting
news coming soon!

About
Veloce Media Group

Founded
in 2018, Veloce (www.velocemediagroup.com) is a multi-pillared gaming and
sports media group operating across some of the most innovative, fast-growing,
and future-focused sectors in the UK.

Headquartered
in London, the Veloce brand comprises the industry-leading gaming and racing
platform, Veloce Esports, and race-winning outfit, Veloce Racing, currently
competing in the renowned Extreme E championship.

As the world’s
largest digital racing media network, Veloce has so far attracted over 35
million subscribers and nearly one billion monthly views with a focus on
esports, gaming, purpose-driven motorsport, and Web3.

Veloce
is partnered with a number of high-profile teams from across the globe, running
multiple gaming and esports team operations, including Mercedes AMG, Ferrari,
McLaren, and Yas Heat. Well-established JV sub-brands, including Lando Norris’
gaming and lifestyle brand Quadrant, make up another key aspect of Veloce’s
vast global network.

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

The firm says that hedge funds have dropped short trades on US regional banks as of the end of August and instead have now turned bullish on the broader US financial sector in general. The note is from Goldman’s prime brokerage desk, which serves hedge funds, and says that US financial services companies – including banks – were among the most sought-after stocks last week.

Meanwhile, they find that the ratio of long trades compared with short positions on US regional banks has risen by 26% since the low of the year at around mid-July.

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