FX News Today
FX Action: The Euro lifted across-the-board on a report commenting that the Italian government is now planning to cut the budget deficit to 2% of GDP in 2021, following deficits of 2.4% in 2019 and 2.2% in 2020, which sparked a bounce in the euro. The Italian government had previously been planning a 2.4% deficit through to 2021. EURUSD gained nearly 0.5% in making an intraday high at 1.1592, extending the rebound from yesterday’s six-week low at 1.1505. EURJPY, EURCHF and other Euro crosses have also gained. Elsewhere, the Dollar has traded steady, with a firming tilt after Fed Chairman Powell made upbeat remarks on the U.S. economy, although conceding that inflation pressures haven’t been seen “yet”. UUSDJPY lifted out of a three-session low at 113.52 to an intraday high of 113.82.
Asian market Wrap: 10-year Treasury yields are up 0.9 bp at 3.037%, the 10-year JGB yield gained 0.8 bp and is at 0.131%, despite a mixed session on stock markets. Fed’s Powell said the outlook for jobs and inflation is “remarkably positive”, which underpinned a pick up in yields. Chinese stock markets rallied after yesterday’s holiday, with CSI 300 and Shanghai Comp up 1.04% and 1.06% respectively. Topix and Nikkei meanwhile are down -109% and -0.77% respectively, while the Hang Seng is down -0.26% after swinging between gains and losses following yesterday’s slump. European politics and global trade developments remain in focus, while concern in India and Indonesia over commodity prices remains as oil prices continue to hold above USD 75 per barrel.
Charts of the Day
Main Macro Events Today
- Euro Area Services and Composite PMIs – Expectations – The September PMI is expected to come out similar to the previous month both for indices, at 54.7 and 54.2 respectively, remaining strongly above the 50 threshold.
- GBP Services PMI – Expectations – The Services PMI in September is expected to come out lower than last month’s, also following the reduction in the September Construction PMI.
- US Services and Composite PMIs – Expectations – The Services PMI for September is expected to grow in September while the Composite PMI is expected to remain at the same levels.
Support and Resistance Levels
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Dr Nektarios Michail
Market Analyst
HotForex
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