Economic Highlights Today

MARKET OVERVIEW

This week, traders are bracing for a significant amount of data reporting, particularly focusing on Fridays Non-farm payrolls report. The outcome of this report could shift market expectations regarding the extent of the Federal Reserve's rate cuts. Should the payroll figures fall below expectations, there may be an increased likelihood that traders will price in a 50-basis point rate cut.

According to the CME Group's FedWatch Tool, traders have raised the probability of a 50 bp rate cut by the Federal Reserve on Sept. 18 to 38%, up from 30% the previous day.

Gavin Friend, Senior Markets Strategist at National Australia Bank, commented, “Markets are on edge ahead of Friday's crucial non-farm payroll report, which most participants agree will be a decisive factor in whether the Fed opts for a 25 or 50 bp cut.”

“Recent asset movements suggest a risk-off sentiment, with investors leaning towards safe havens and taking a step back,” he added.

MARKET ANALYSIS

GOLD

In the commodities market, GOLD experienced a downward push in yesterdays trading but found some support as traders await further data releases this week. While we maintain a bullish outlook on GOLD, we acknowledge that the current consolidation phase may extend in the near term.

SILVER

SILVER has dropped closer to the 27.725 level, and we anticipate potential selling pressure in the coming days as the SHS formation approaches completion. Another dip below 27.725 could occur before a reversal towards our expected bullish market trajectory.

DXY

The U.S. dollar remains in consolidation but saw a slight uptick following a strong ISM Manufacturing PMI report. We expect heightened volatility in the market as the week progresses and additional data is released.

GBPUSD

The British pound remains stable, signaling that traders are awaiting more information before making significant moves. As such, we refrain from further analysis until more data becomes available.

AUDUSD

Risk-on assets have lost ground as traders shift towards safer investments ahead of the anticipated September rate cuts. We foresee continued market growth, with prices currently ranging between 0.67142 and 0.66541. There is a strong likelihood of further price declines, but consolidation is also possible as the market anticipates upcoming data releases.

NZDUSD

The New Zealand dollar (Kiwi) has also declined, with prices falling below 0.620886 and potentially reaching 0.61408. We expect continued market weakness as traders exit risk-on assets.

EURUSD

The Euro is trading positively against the dollar, with support established at 1.10361. Like the pound, the Euro is holding steady, awaiting more data before significant price movements occur.

USDJPY

The Yen gained considerable strength following yesterdays trading, reflecting its appeal as a safe-haven asset. Currently, prices have retraced to below 146.512. We expect further strengthening of the Yen, and despite our earlier predictions, we may need to adjust our outlook depending on how the price interacts with the identified bottom.

USDCHF

The Swiss Franc is projected to regain strength as traders adopt a more cautious approach. We anticipate further strengthening of the Franc, particularly in light of the expected U.S. rate cuts.

USDCAD

The Canadian dollar (Loonie) is currently trading lower, indicating that traders are exiting the currency. While short-term uncertainty remains, we expect the market to trend bearish or possibly strengthen further. This is supported by several fundamental factors.