Futures higher; data wave incoming this week - what’s moving markets
Markets were back in risk-on mood in Asian trading on Wednesday as investors cut back expectations of a Fed rate hike this month following yesterday’s weak US data. Non-manufacturing activity in the US grew at the slowest pace in 6½-years in August according to the ISM index. The dollar plummeted after the data as the poor ISM reading means the Fed is unlikely to raise rates at its policy meeting later this month.
The greenback fell to a one-week low of 101.93 yen yesterday and was heading towards two-week lows in Asian trading today as it hit a session-low of 101.20 yen. The dollar’s retreat pushed the yen higher against other major currencies and further bolstering the yen was a report in a Japanese newspaper today of a possible split within the Bank of Japan’s policy board. Divisions among the Bank’s board would make it more difficult for board members to reach agreement for fresh action at the BoJ’s policy meeting in two weeks’ time.
Meanwhile, more hawkish remarks from Fed policymaker John Williams failed to provide any support to the dollar. Williams insisted that the September meeting is ‘live’ but admitted that the rate hike path is shallower than he expected it to be.
The dollar fell across the board as the euro jumped to near two-week highs, while the pound rose to near 8-week highs. The euro hit a high of 1.1265 dollars in late Asian session as traders ignored a surprise dip in German industrial output in July. Industrial production in Germany fell by 1.5% month-on-month in July, missing estimates that it would rise by 0.2%.
Sterling held above the 1.34 level against the dollar in today’s Asian session but came under pressure at the start of European trading as investors eyed UK manufacturing data due later in the day.
Commodity currencies also made strong gains against the greenback with the Canadian dollar rising to a 2½-week high. The US dollar stood at around 1.2840 against its Canadian counterpart in Asian trading today as higher crude oil prices supported the loonie.
Crude oil prices firmed to around $45.30 a barrel today even as markets remain doubtful of a possible deal to cap output at the upcoming meeting of oil producers.
The New Zealand dollar surged to a 16-month high today after dairy prices jumped by 7.7% in yesterday’s bi-weekly auction. The kiwi rose to the highest since May 2015, hitting 0.7459 against the US dollar in late Asian session.
But the Australian dollar lost some of its earlier gains in late Asian trading, slipping to 0.7655 versus the greenback as the latest GDP figures left the door open for further rate cuts later in the year. Australia’s economy grew by 0.5% quarter-on-quarter in the second quarter of the year. This was slightly weaker than expectations of 0.6% but the annual rate rose from 3.1% to 3.3%, which was the fastest since 2012.
In other news, the Swedish krona firmed against the euro after Sweden’s central bank kept monetary policy unchanged. The Riksbank maintained its easing bias as it kept its benchmark rate unchanged at -0.5%, but the euro dipped to 9.50 krona as the ECB is seen as more likely to ease again over the coming months.
Looking ahead to the rest of the day, UK industrial and manufacturing output will be the main data in the European session, while in the US session, the Bank of Canada’s latest policy decision will be watched.
The greenback fell to a one-week low of 101.93 yen yesterday and was heading towards two-week lows in Asian trading today as it hit a session-low of 101.20 yen. The dollar’s retreat pushed the yen higher against other major currencies and further bolstering the yen was a report in a Japanese newspaper today of a possible split within the Bank of Japan’s policy board. Divisions among the Bank’s board would make it more difficult for board members to reach agreement for fresh action at the BoJ’s policy meeting in two weeks’ time.
Meanwhile, more hawkish remarks from Fed policymaker John Williams failed to provide any support to the dollar. Williams insisted that the September meeting is ‘live’ but admitted that the rate hike path is shallower than he expected it to be.
The dollar fell across the board as the euro jumped to near two-week highs, while the pound rose to near 8-week highs. The euro hit a high of 1.1265 dollars in late Asian session as traders ignored a surprise dip in German industrial output in July. Industrial production in Germany fell by 1.5% month-on-month in July, missing estimates that it would rise by 0.2%.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.
Sterling held above the 1.34 level against the dollar in today’s Asian session but came under pressure at the start of European trading as investors eyed UK manufacturing data due later in the day.
Commodity currencies also made strong gains against the greenback with the Canadian dollar rising to a 2½-week high. The US dollar stood at around 1.2840 against its Canadian counterpart in Asian trading today as higher crude oil prices supported the loonie.
Crude oil prices firmed to around $45.30 a barrel today even as markets remain doubtful of a possible deal to cap output at the upcoming meeting of oil producers.
The New Zealand dollar surged to a 16-month high today after dairy prices jumped by 7.7% in yesterday’s bi-weekly auction. The kiwi rose to the highest since May 2015, hitting 0.7459 against the US dollar in late Asian session.
But the Australian dollar lost some of its earlier gains in late Asian trading, slipping to 0.7655 versus the greenback as the latest GDP figures left the door open for further rate cuts later in the year. Australia’s economy grew by 0.5% quarter-on-quarter in the second quarter of the year. This was slightly weaker than expectations of 0.6% but the annual rate rose from 3.1% to 3.3%, which was the fastest since 2012.
In other news, the Swedish krona firmed against the euro after Sweden’s central bank kept monetary policy unchanged. The Riksbank maintained its easing bias as it kept its benchmark rate unchanged at -0.5%, but the euro dipped to 9.50 krona as the ECB is seen as more likely to ease again over the coming months.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.
Looking ahead to the rest of the day, UK industrial and manufacturing output will be the main data in the European session, while in the US session, the Bank of Canada’s latest policy decision will be watched.
Which stock should you buy in your very next trade?
With valuations skyrocketing in 2024, many investors are uneasy putting more money into stocks. Unsure where to invest next? Get access to our proven portfolios and discover high-potential opportunities.
In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. That's an impressive track record.
With portfolios tailored for Dow stocks, S&P stocks, Tech stocks, and Mid Cap stocks, you can explore various wealth-building strategies.