No big data? No problem!
Pullbacks from the previous week’s moves and positioning ahead of potential market moves this week sent traders pushing major assets all over the charts on Monday.
What headlines dominated the market’s price action anyway? Let’s take a look at them:
Headlines:
- Japanese bank loans Growth slowed from 3.2% year-on-year to 3.0% in August versus 3.2% expected.
- Japan’s current account surplus It expanded from JPY 1.78 trillion to JPY 2.80 trillion (expected JPY 2.08 trillion)
- Japan’s final GDP The Q2 2024 reading was lowered from 0.8% q/q to 0.7%, and the price index was raised from 3.0% to 3.2%.
- Japan’s Chief Cabinet Secretary Yoshimasa HayashiI said the Bank of Japan is ready for further interest rate hikes.
- China Consumer Price Index It rose from 0.5% y/y to 0.6% vs. 0.7% expected in August, and the producer price index fell by 1.8% y/y (-1.5% expected, -0.8% previous)
- Sentix: Eurozone investor confidence The index fell further from -13.9 to -15.4 in September;Eurozone struggles with dangerous recessionary trends ‘thanks to Germany’“
- Crude oil prices Oil prices rose on the risks and threats of a hurricane that could disrupt production and refining along the US Gulf Coast.
- Conference Board Hiring Trends The index improved from a downwardly revised 108.71 to 109.04 in August;The pace of labor market slowdown remains sustained.“
- Westpac: Australian Consumer Sentiment The consumer price index fell 0.5% from 85.0 to 84.6 in September; the focus may shift from living costs to job prospects
Price movement in the broad market:
Dollar Index, Gold, S&P 500, Oil, 10-Year US Treasury Yield, Bitcoin Chart by TradingView
With a light schedule of high-profile data, most major assets reversed some of the selling seen on Friday.
Global stocks, in particular, were supported by bargain hunters, easing concerns about a hard landing for the U.S. economy. Bitcoin (BTC/USD) also joined the rally, briefly rising near $58,000 before settling at $57,100.
Gold, on the other hand, fell to its lowest levels on Friday during early European trading, but expectations of a rate cut by the Federal Reserve kept the precious metal supported. The XAU/USD pair rose from $2,485, to close the day just above $2,500. Similarly, the slowdown in talk of a 50 basis point rate cut by the Federal Reserve gave a boost to US bonds, sending the yield on the 10-year note to its lowest levels in more than a year.
Oil also had a strong day, as concerns about a potential hurricane in the Gulf of Mexico dampened demand, with worries that production and refining along the U.S. Gulf Coast could be affected.
Forex Market Behavior: US Dollar vs Major Currencies:
US Dollar Overlay Against Major Currencies Chart by TradingView
The US dollar started the day strong, recovering from Friday’s sell-off.
The dollar gained momentum during the European session, but lost some momentum as US markets opened. This may be due to increased risk, which led to a decrease in demand for the dollar as a safe haven.
The US dollar saw some sharp declines at the London close but managed to recover, ending the day higher against most major currencies – except the Canadian dollar, which outperformed.
Potential catalysts coming up on the economic calendar:
- Germany Final CPI at 6:00 AM GMT
- UK Jobs Report at 6:00am GMT
- Initial orders for manufacturing machinery in Japan at 6:00 AM GMT
- Italy Industrial Production at 8:00 AM GMT
- Board of Education Member Sarah Breeden will speak at 11:00 a.m. GMT.
- Bank of Canada Governor Macklem will deliver a speech in London at 12:10 p.m. GMT.
- FOMC Member Michael Barr to Speak at 2:00 PM GMT
- FOMC Member Michelle Bowman will speak at 4:15 p.m. GMT.
- US Presidential Candidates Trump and Harris Debate at 1:00 AM GMT (September 11)
Traders in the European session are expected to see a busy day as Germany will publish final inflation figures for August while the UK will publish its latest employment reports.
In the US, central bankers will be in the spotlight, with members of the Bank of Canada, the Bank of England and the Federal Open Market Committee scheduled to deliver speeches.
Stay tuned for headlines that could influence market sentiment regarding major central bank biases!
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