In today's market insights, we delve into Citibank's oil price predictions, the evolving competition between Huawei and Apple, the Saudi Arabia-Tesla partnership, and the upcoming rate decisions from the world's major central banks.
Main market movements on September 17
The US dollar gained after the Fed’s report, while riskier assets dropped. Let’s have a closer look.
- The Fed’s chairman Jerome Powell announced that “the recovery has progressed more quickly than generally expected,” but emphasized that “the path ahead remains highly uncertain”. As had been expected, the central bank left interest rates at low levels until 2023. Besides, the Fed pointed out that the race of bond-buying would stay at the current levels. The lack of further fiscal support disappointed the market and increased flows into safe-haven assets, such as the USD.
- US core retail sales came out worse than analysts expected. They rose by 0.6% in August, while the forecast was an increase of 1.0%.
- New Zealand’s GDP contracted by 12.2%, beating estimates of -12.5%. The Australian labor figures exceeded expectations too. However, the strong US dollar stopped the riskier currencies such as the NZD and the AUD from rising.
- The Bank of Japan delivered a monetary policy report this morning. It left interest rates unchanged at the level of -0.1% as anticipated. The bank claimed that the economy is recovering as well as consumer consumption, and soon the Japan output will reach high levels. Optimistic comments on exports underpinned the Japanese yen, pushing USD/JPY below 105.00.
EUR/USD has broken down the lower trendline, which has been strong support since the middle of May. However, the further falling was constrained by the low level of September 9 at 1.1755. The move above the 200-period moving average at 1.1835 will drive the price to the key psychological mark of 1.1900. Support levels are 1.1755 and 1.1700.
USD/JPY is aggressively streaming down. If it manages to cross the low of July 30 at 104.70, it will open doors towards the next support of 104.30. In the opposite scenario, the move above the high of the recent low of 105.10 will push the price higher to the next resistance of 105.50.
The S&P 500 has sharply plummeted amid the risk-off mood. If it drops below the low of September 11 at 3 330, the doors towards the next support of 3 315 will be open. On the flip side, if the market mood changes, the jump above the resistance of 3 370 will drive the price towards the high of September 16 at 3 420.
Finally, let’s discuss gold. It has failed to stabilize above the $1 970 level and slumped to $1 940. The move below this support will clear the way towards the strong support of $1 925, which it hasn’t been able to break a few times. Otherwise, if it surges above the recent high of $1 970, it will jump to the next resistance of $1 990.
Follow further news:
- The monetary policy report of the Bank of England will be out at 14:00 MT time.
- Later on, the US unemployment claims will be released at 15:30 Mt time. Stay tuned!
It will be the hottest week of September, with four central banks’ meetings, five PMI releases, and a lot to trade.
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Today's main event for the markets is the FOMC Interest Rate Decision, where the US regulator is widely expected to keep the interest rate at the same level of 5.5%.