It may be a holiday in Japan and China but that hasn’t dampened the trading mood to start the week so far. The dollar is pushed lower as we look towards European trading, with USD/JPY in particular testing the 140.00 mark. The low earlier touched 139.94 and marks the lowest level since July last year. The pressure is certainly on.
Besides that, the greenback is also trading slightly lower across the board with all the focus and attention this week turning towards the Fed. Market players are now starting to push the narrative of a 50 bps rate cut, with odds of that seen at ~59% currently. Will the Fed give in or will they push back against what markets want?
Meanwhile, gold is continuing to race higher to fresh record highs – now up 0.4% to $2,586. The train continues to march on, especially with yields staying pinned down as well. But again, it all lies with the Fed in trading this week.
Looking to the session ahead, there won’t be much to distract from things. It’s all about major central bank decisions this week. So, anything in the run up to that will be a matter of positioning flows mostly. The data front will have little to offer on a week like this, though we do have US retail sales tomorrow at least. But for today, nothing major.
0630 GMT – Switzerland August producer and import prices
0800 GMT – Italy August final CPI figures
0800 GMT – SNB total sight deposits w.e. 13 September
0900 GMT – Eurozone July trade balance data
That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
