Economics week ahead

Wells Fargo Research Team Wells Fargo

Next week is light on the domestic data front, with focus on Thursday's new home sales report. We expect sales to partially recover in August, rising 2.6% to a 623K pace after a sharp decline in July. Higher mortgage rates continue to weigh on affordability and demand, though builder incentives remained in place and conditions did not worsen materially during the month.

Abroad, consensus expects Australia’s August employment report to show a rebound in hiring after July’s decline, which would reinforce our call for the RBA to raise the Cash Rate by 25 bps in September. In Mexico, we expect Banxico to leave the policy rate unchanged at 6.50% for a third straight meeting this year. Our focus will be on the accompanying statement and whether policymakers signal a shift in tone following the Fed’s recent rate hike.

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Wells Fargo Research Team

Wells Fargo

AUD/USD tests 0.6800 as Fed hawks drive USD to 19-month high

AUD/USD has come under heightened downside pressure, briefly slipping back below the 0.6800 yardstick on Thursday. Indeed, the pair has revisited levels last seen in late January in response to the continuation of the bullish momentum favouring the Greenback, which remained propped up by rising bets over extra Fed tightening.

USD/JPY eases from near 160.00 amid looming intervention risks, BoJ hike bets

USD/JPY retreats slightly from an over two-month high as the recent surge back to the 160.00 psychological mark prompted verbal warnings from Japanese authorities and sparked fears of direct FX intervention. Moreover, data showed that Japan’s wholesale inflation picked up again in October, strengthening the case for a BoJ hike in December and lifting the Japanese Yen. However, a bullish US Dollar, bolstered by odds of a jumbo Fed rate hike in December, could cap the pair's downside.

Gold shifts the focus to $3,800 amid stronger US Dollar

Gold comes under heightened downside pressure, retreating for the third consecutive day and approaching the $3,800 region per troy ounce on Thursday. Increasing speculation of a 50-bps rate hike by the Fed in December continues to weigh on the precious metal amid further gains in US Treasury yields.

Dogecoin Price Forecast: DOGE tests three-year low as selling pressure deepens

Dogecoin (DOGE) trades lower around $0.0650 on Thursday, as bears tighten their grip. The path of least resistance remains downward not only for the largest meme coin by market capitalization but also for crypto majors Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP). DOGE is down about 2.6% on the day, aligning with levels last seen in October 2023.

Nvidia shares crash as Jensen Huang resigns as CEO

Nvidia (NVDA) shares collapsed in Thursday's premarket after longtime CEO and co-founder Jensen Huang resigned as CEO in the face of board scrutiny over several affairs. Nvidia shares have shed 10% at the time of writing as the leading AI chipmaker chose chief financial officer (CFO) Colette Kress as interim CEO.

What the US CPI headline doesn’t tell you about inflation

Brent crude has fallen about a third since mid-October on hopes the Iran war is ending, but diesel, freight and fertiliser costs haven't followed. Those costs reach US consumer prices in stages through 2027 and could keep inflation high after gasoline gets cheaper.