FX News Today
Treasury yields dipped -1.4 bp overnight, JGB rates are down -0.5 bp as bond markets continue to rally amid the escalating US-Sino trade spat that saw Trump targeting Chinese telecom companies.
Reports that the US President will hold off on auto tariffs for now helped European bourses to stage a late rally Wednesday.
The US President signed an order that is expected to restrict the likes of Huawei and ZTE Corp from selling their equipment to the US. Huawei was also put on a blacklist that could forbid it from doing business with American companies and require US companies to obtain a special licence to sell products to the company, which if enforced strictly could halt even everyday operations at the Chinese company.
The US and European stock futures are under pressure ahead of the official open.
US-Sino trade tensions aside Brexit developments and Italian budget jitters remain in focus amid a pretty quiet local calendar that focuses on Eurozone trade numbers as well as the final reading of Italian HICP inflation.
The unexpected pick up in Australian unemployment fuelled speculation of a rate cut from the RBA.
The front end WTI future is trading at $62.40 per barrel.
Charts of the Day
Technician’s Corner
EURUSD found Resistance at 1.1217 level for 2 consecutive days. The pair has mostly been stuck between its 20-day moving average at 1.1200 and its 50-day moving average at 1.1245 since the start of the week. A close above or below these levels may help determine direction for the remainder of the week.
GBPUSD has extended losses which s now in its 9th consecutive down day, after it broke yesterday April’s lows. Next support for the asset is coming at January’s low Resistance at 1.2772.
Main Macro Events Today
Housing Data (USD, GMT 12:30) – Both Building Permits and Housing Starts should jump in April, to a 1.215 mln pace and to 1.298 mln respectively, after a 0.3% and 0.2% decline seen in March. Overall, a stronger trajectory is expected for starts with a positive but slower pace for permits.
Support and Resistance levels
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The GBP/USD pair finds some support near the 1.3150 region on Thursday and for now, seems to have stalled its retracement slide from the 1.3300 neighborhood, or the highest level since March 2022 touched the previous day.
EUR/USD flat lines above 1.1100 after Fed's bumper rate cut
The EUR/USD pair trades flat during the early European session on Thursday. The major pair initially edges higher to monthly highs of 1.1189 after a large rate cut by the Federal Reserve at its September meeting and eases back to near 1.1120.
Gold defends $2,550 in the Fed’s aftermath, ahead of US data
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Australian Unemployment Rate expected to hold steady at 4.2% in August
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