✅ Daily Market Analysis - WEDNESDAY SEPTEMBER 13, 2023
Key events:
UK - GDP (MoM) (Jul)
USA -Core CPI (MoM) (Aug)
USA -CPI (MoM) (Aug)
USA -CPI (YoY) (Aug)
USA -Crude Oil Inventories
In Tuesday's evening trading, US stock futures remained confined to a tight range, mirroring a session of mixed performance for major indices. This cautious sentiment prevailed as investors braced themselves for the upcoming release of the latest Consumer Price Index (CPI) data scheduled for Wednesday's session. The Dow Jones, S&P 500, and Nasdaq 100 all traded within a narrow range of just 0.1%.
NASDAQ index daily chart
S&P500 index daily chart
DJI index daily chart
The US dollar demonstrated relative stability in the lead-up to a significant US inflation report expected on Wednesday. However, it made gains against the Japanese yen as traders continued to digest comments from Japan's top central banker, hinting at a potential early exit from the country's negative interest rate policy.
The US currency advanced by around 0.2%, reaching 147.39 against the yen. This marked a solid recovery from its most significant one-day percentage increase in two months, which occurred on Monday following statements made by Bank of Japan (BOJ) Governor Kazuo Ueda over the weekend.
USD/JPY daily chart
Investors were granted more time to carefully analyze Ueda's comments, and influential ruling party lawmaker Hiroshige Seko indicated his preference for maintaining an ultra-loose monetary policy on Tuesday. This reaction came in response to Ueda's remarks, which had initially driven up the yen and bond yields.
The yen has been under sustained pressure against the dollar, particularly since the Bank of Japan (BOJ) maintains a dovish stance in comparison to global central banks. This contrast became even more pronounced following the Federal Reserve's aggressive rate-hike cycle, which commenced in March 2022.
Data released on Wednesday revealed that Japan's annual wholesale inflation had decelerated for the eighth consecutive month in August. However, it remained at 3.2%, surpassing the central bank's 2% target.
On a broader scale, the US dollar continued to exhibit strength, although market movements remained subdued as traders awaited a closely watched US inflation report scheduled for later in the day.
Meanwhile, the British pound experienced a marginal 0.05% decline, settling at $1.2489, while the Australian dollar also saw a slight 0.03% dip, reaching $0.6408.
GBP/USD daily chart
The US dollar index, which measures the dollar's performance against a group of competing currencies, maintained its stability at 104.61. This followed a dip to a one-week low on Monday, characterized by its most substantial daily decline in two months. Analysts attributed this decline to the unwinding of long dollar positions, a response to a recent series of strong US economic data releases.
US Dollar Currency Index daily chart
The eagerly awaited US Consumer Price Index (CPI) data for August, scheduled for release on Wednesday, comes just a week before Federal Reserve officials gather to make decisions on interest rate policy. Forecasts suggest that the headline CPI is expected to show a monthly increase of 0.6%, a notable rise from the previous month's 0.2%, with an annual increase of 3.6%.
Although the central bank is widely anticipated to maintain interest rates at the upcoming meeting, as indicated by CME's FedWatch Tool, the Fed's actions in November remain less certain.
In other developments, the euro held steady at $1.0753, maintaining its position after reaching a one-week high of $1.0777 in the previous session.
EUR/USD daily chart
European shares encountered a downturn on Tuesday, primarily driven by the negative impact of German software company SAP. SAP's performance was influenced by a disappointing forecast from the US tech giant Oracle (NYSE: ORCL).
Germany's DAX index experienced a decline of 0.5%, with SAP's shares slipping by 1.8%. This decline followed Oracle's projection of current-quarter revenue figures that fell short of Wall Street's expectations. Challenging economic conditions had placed pressure on businesses' cloud spending, contributing to the subdued outlook.
In contrast, Britain's FTSE 100 index stood as a notable exception, recording a gain of 0.4%. This upward movement was supported by a weaker pound, a result of data indicating a weakening labor market. Interestingly, despite the economic challenges, wage growth remained robust in July, creating a somewhat ambiguous outlook ahead of the Bank of England's impending interest rate decision next week.
FTSE 100 index daily chart
UK - GDP (MoM) (Jul)
USA -Core CPI (MoM) (Aug)
USA -CPI (MoM) (Aug)
USA -CPI (YoY) (Aug)
USA -Crude Oil Inventories
In Tuesday's evening trading, US stock futures remained confined to a tight range, mirroring a session of mixed performance for major indices. This cautious sentiment prevailed as investors braced themselves for the upcoming release of the latest Consumer Price Index (CPI) data scheduled for Wednesday's session. The Dow Jones, S&P 500, and Nasdaq 100 all traded within a narrow range of just 0.1%.
The US dollar demonstrated relative stability in the lead-up to a significant US inflation report expected on Wednesday. However, it made gains against the Japanese yen as traders continued to digest comments from Japan's top central banker, hinting at a potential early exit from the country's negative interest rate policy.
The US currency advanced by around 0.2%, reaching 147.39 against the yen. This marked a solid recovery from its most significant one-day percentage increase in two months, which occurred on Monday following statements made by Bank of Japan (BOJ) Governor Kazuo Ueda over the weekend.
Investors were granted more time to carefully analyze Ueda's comments, and influential ruling party lawmaker Hiroshige Seko indicated his preference for maintaining an ultra-loose monetary policy on Tuesday. This reaction came in response to Ueda's remarks, which had initially driven up the yen and bond yields.
The yen has been under sustained pressure against the dollar, particularly since the Bank of Japan (BOJ) maintains a dovish stance in comparison to global central banks. This contrast became even more pronounced following the Federal Reserve's aggressive rate-hike cycle, which commenced in March 2022.
Data released on Wednesday revealed that Japan's annual wholesale inflation had decelerated for the eighth consecutive month in August. However, it remained at 3.2%, surpassing the central bank's 2% target.
On a broader scale, the US dollar continued to exhibit strength, although market movements remained subdued as traders awaited a closely watched US inflation report scheduled for later in the day.
Meanwhile, the British pound experienced a marginal 0.05% decline, settling at $1.2489, while the Australian dollar also saw a slight 0.03% dip, reaching $0.6408.
The US dollar index, which measures the dollar's performance against a group of competing currencies, maintained its stability at 104.61. This followed a dip to a one-week low on Monday, characterized by its most substantial daily decline in two months. Analysts attributed this decline to the unwinding of long dollar positions, a response to a recent series of strong US economic data releases.
The eagerly awaited US Consumer Price Index (CPI) data for August, scheduled for release on Wednesday, comes just a week before Federal Reserve officials gather to make decisions on interest rate policy. Forecasts suggest that the headline CPI is expected to show a monthly increase of 0.6%, a notable rise from the previous month's 0.2%, with an annual increase of 3.6%.
Although the central bank is widely anticipated to maintain interest rates at the upcoming meeting, as indicated by CME's FedWatch Tool, the Fed's actions in November remain less certain.
In other developments, the euro held steady at $1.0753, maintaining its position after reaching a one-week high of $1.0777 in the previous session.
European shares encountered a downturn on Tuesday, primarily driven by the negative impact of German software company SAP. SAP's performance was influenced by a disappointing forecast from the US tech giant Oracle (NYSE: ORCL).
Germany's DAX index experienced a decline of 0.5%, with SAP's shares slipping by 1.8%. This decline followed Oracle's projection of current-quarter revenue figures that fell short of Wall Street's expectations. Challenging economic conditions had placed pressure on businesses' cloud spending, contributing to the subdued outlook.
In contrast, Britain's FTSE 100 index stood as a notable exception, recording a gain of 0.4%. This upward movement was supported by a weaker pound, a result of data indicating a weakening labor market. Interestingly, despite the economic challenges, wage growth remained robust in July, creating a somewhat ambiguous outlook ahead of the Bank of England's impending interest rate decision next week.
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