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.

EURUSD:

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.

The major indices are closing mixed today with the Dow Industrial Average average fearing the worst. The NASDAQ index eked out a small gain for the day. The S&P was lower.

A snapshot of the closing levels shows:

• Dow industrial average fell -157.50 points or -0.47% at 33508.86
• S&P index -11.46 points or -0.27% at 4288.23
• NASDAQ index rose 18.04 points or 0.14% at 13219.31

For the month of September, all three major indices closed lower. The broader S&P and NASDAQ indices had the worst trading month in 2023 (and worst month since December 2023). Looking at the month declines:

• Dow industrial average fell -3.50%
• S&P index -4.87%
• NASDAQ index fell -5.81%

Today is also the closing level for the 3rd quarter, and each of the major indices closed lower

• Dow Industrial Average fell -2.60%. That was the 1st negative quarter since the 3Q of 2022
• S&P index fell -3.65%. That too was the 1st negative quarter since the 3Q of 2022
• NASDAQ index fell -4.12%, which was the first negative quarter since the 4Q of 2022

For the trading year – with one more quarter to go):

• Dow industrial average is up 1.09%
• S&P index is up 11.68%
• NASDAQ index is up 26.30%

Interest rates moved higher this quarter – especially out the yield curve – which helped to depress stock levels:

• 2-year yield rose 15.8 basis points or 3.22%
• 5-year yield rose 46.2 basis points or 11.10%
• 10-year yield moved up 73.8 basis points or 19.20%
• 30-year yield rose 84 basis points or 21.71%
• The 2 – 10 year spread steepened by 58 basis points, but is still negative by -47 basis points
• The 2 – 30 year spread steepened by 69 basis points, but is still negative by -35 basis points

In other markets:

• Crude oil for the quarter rose $20.27 or 28.68%
• Gold prices this quarter fell $-71.50 or -3.733%
• Silver prices fell 59.6 cents or -2.62%.
• Bitcoin fell $-3535 or 11.61%. Bitcoin still has another 2 days of trading before it’s month end.

In Forex for the 3Q, the US dollar was higher against all the major currency pairs with the largest gain versus the GBP. The smallest gain was averse the CHF (2.28%).:

• The US dollar index rose 328 pips to 106.204. That’s a gain of 3.19%
• EURUSD fell -340 pips or -3.16% (USD higher)
• USDJPY rose 515 pips or 3.57% (USD higher)
• GBPUSD fell -491 pips or -3.87% (USD higher)
• USDCHF rose 204 pips or 2.28% (USD higher)
• USDCAD rose 340 pips or 2.56% (USD higher)
• AUDUSD fell -223 pips or -3.35% (USD higher)
• NZDUSD fell -143 pips or -2.32% (USD higher)

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

In this video, I take a look at the NZDUSD and outlines the key technical levels in play heading into the new trading week starting October 2, 2023.

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

The USDJPY had a volatile down and up trading day with the full 100 pip move to the downside in the first half of the day, nearly fully retracted in the 2nd half of the day.

The low price today moved to the 200-hour moving average and the picture set midpoint of the move up from last week’s low at 148.507. Support buyers leaned against that level, and pushed the price higher. After trading above and below the 100-hour moving average for a few hours, traders based against the level, and pushed higher. That move to the upside stall just short of the high from earlier today near 149.50.

Going into next week, the 100-hour movie at 149.156 will be the close support and will be a barometer for buyers and sellers. Stay above is more bullish. Move below is more bearish.

A move to the downside would have traders looking toward the 38.2% retracement at 148.79, and then the 200-hour moving average at 148.606 (the moving higher).

On the top side, getting above the high price from yesterday and today at 149.50, would open up the door toward the high for the week at 149.70, followed by the natural resistance at 150.00 level.

If the 150.00 natural resistance target can be broken, I would expect further upside momentum.

Buyers are more in control with the price above the 100-hour moving average and after holding the 200-hour moving average. If the sellers are to take more control they need to get below both those moving averages and stay below..

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

Oil is near the lows of the day, down 96-cents but still has some breathing room in what looks like it will be another weekly close above $90.

Still, it feels like something of a loss for the bulls, or at least a loss of momentum. We touched $95 early on Thursday before giving back more than $4 and are on track to finish flat on the week.

That, combined with the early-week selling paints a prominent doji star on the weekly chart. That’s a bit of a red flag about the potential for a reversal and also a sign that volatility will stay high.

I would be more cautious on the downside here for five reasons:

1. It’s a new month/quarter on Monday and that could shift allocations. Overall, funds are light on energy, so that could end up being good but a new quarter can change the trend and the trend in Q2 was undoubtedly bullish.
2. All OPEC+ risks are to the downside. All it will take is a small hint that OPEC is thinking about pumping more and oil will fall
3. Similarly, the 2024 is an election year and the temptation will be for the Biden admin to tap the SPR
4. Gasoline cracks are plunging right now. I think that’s more about refineries and them running hotter and changes to winter gas ahead of maintenance but it could reflect demand. Diesel is still rock solid but something is changing in gasoline and any change from the status quo in oil is bearish.
5. October, seasonally, is by far the worst month for front month oil

I think that paints a compelling picture for caution.

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

Headlines:

• Dollar slumps as yields retreat towards the end of the week
• Equities keep the faith ahead of US trading
• ECB’s Vasle: We’re probably done with rate hikes
• BOJ to conduct unscheduled bond buying operation to tamp down rates
• Eurozone September preliminary CPI +4.3% vs +4.5% y/y expected
• France September preliminary CPI +4.9% vs +5.1% y/y expected
• Germany August retail sales -1.2% vs +0.5% m/m expected
• Germany August import price index +0.4% vs +0.5% m/m expected
• Germany September unemployment change 10k vs 15k expected
• UK August mortgage approvals 45.35k vs 45.00k expected
• UK Q2 final GDP +0.2% vs +0.2% q/q prelim
• UK finance minister Hunt says GDP data once again proves the doubters wrong
• Switzerland September KOF leading indicator index 95.9 vs 90.5 expected

Markets:

• AUD and NZD lead, USD lags on the day
• European equities higher; S&P 500 futures up 0.3%
• US 10-year yields down 2.6 bps to 4.571%
• Gold up 0.1% to $1,867.19
• WTI crude up 1.1% to $92.69
• Bitcoin down 0.4% to $26,992

There was plenty of data releases to work through in European trading but the crux of it is that Eurozone inflation did ease to its lowest in two years, allowing some wiggle room for the ECB to work with – at least on paper. The drop is largely led by a steep decline in German price pressures, which owes much to base effects unfortunately as pointed out here.

Besides that, UK Q2 GDP was confirmed to show a slight marginal growth although the year-on-year reading did surprise higher but that doesn’t distract from the ongoing worries in Q3 and heading into Q4.

The dollar was weaker throughout the session as yesterday’s retreat continues today amid lower bond yields. The retreat in yields is also helping out broader market sentiment as risk trades are pushing higher, with equities looking to salvage the week and turn losses into gains before the weekend.

EUR/USD moved up to 1.0600 and is holding just below that, with large option expiries in play at the figure level. Adding to that, USD/JPY did see a dip from 149.40 to 148.52 before finding support from its 200-hour moving average and then now holding at 149.20 on the day. There are also large expiries at 149.00 in play for the pair.

But amid the better risk mood, it is the commodity currencies that are running away with things as we see AUD/USD run up by 1% to test 0.6500 once again and USD/CAD dropping by 0.5% to 1.3420. The latter is angling towards its 100-day moving average at 1.3400 once again, which was what kept the downside move earlier this month at bay.

In the equities space, US futures are holding higher alongside European indices as they look to close out the week by turning the rough losses on Tuesday and Wednesday into gains before all is said and done.

But how much all of this can be chalked up to month-end and quarter-end flows remains to be seen.

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

European indices are seeing gains of ~1% and S&P 500 futures are up 0.5% currently. That is hinting at a rather optimistic end to the week, after the rough period initially amid higher bond yields. The solid rebound yesterday is carrying over to today and it is very much helping with sentiment. The Nasdaq in particular seems to be what is holding things together. Yeah, I know. Tech stocks. Pfft.

Lower Treasury yields is adding to the better mood for risk trades today and in somewhat unbelievable fashion at one point, stocks might just end the week with gains. That being said, how much of this can be chalked up to month-end and quarter-end flows will remain to be seen. But at least for now, the technicals are also holding up as per the above.

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