Current Economic Snapshot

MARKET OVERVIEW

This week, traders are gearing up for a flood of data, especially with the much-anticipated Non-farm payrolls report dropping this Friday. The results could shift the market’s view on how much the FED might cut rates. If the payrolls come in lower than expected, we could see traders betting more heavily on a 50 bps rate cut.

According to the CME Group's FedWatch Tool, the odds of a 50 bp rate cut on September 18 have jumped to 38%, up from 30% just a day ago.

“Everyone’s on edge waiting for Friday’s big non-farm payroll report,” said Gavin Friend, Senior Markets Strategist at National Australia Bank. “Most market players agree this report will play a huge role in whether the Fed goes with a 25 or 50 bp cut.”

“All these moves in the market point to a risk-off vibe, with investors stepping back and eyeing safer bets,” he added.

MARKET ANALYSIS

GOLD:

Over in the commodities space, GOLD took a dip in yesterday’s trading but found some footing as traders sit tight for more data later this week. We’re still leaning bullish on GOLD, but we do expect this consolidation phase to drag on a bit longer in the short term.

SILVER:

SILVER slid down to 27.725, and we’re likely to see some selling pressure pick up as the SHS formation completes. One more push below 27.725 might happen before we see the reversal that could send us back into bullish territory.

DXY:

The dollar is in a bit of a holding pattern but got a little boost from a strong ISM Manufacturing PMI. We’re expecting some more fireworks in the market later this week as new data comes out.

GBPUSD:

The pound is holding its ground, showing that traders are in a bit of a wait-and-see mode. We don’t have much more to say here until we get more info.

AUDUSD:

Risk-on assets are losing their shine as traders move toward safer options ahead of those September rate cuts. We’re still expecting the markets to grow, with prices hovering between 0.67142 and 0.66541. There’s a good chance prices will drop further, but we’re also looking at a possible period of consolidation as everyone waits for the data releases

NZDUSD:

The Kiwi also took a hit, with prices dropping below 0.620886, and it might even reach 0.61408. We’re bracing for more weakness in the market as traders bail out of risk-on assets.

EURUSD:

The Euro is holding up against the dollar, with support at 1.10361. Like the pound, the Euro is just chilling for now, waiting for more data before making any big moves.

USDJPY:

The Yen showed some serious strength after yesterday’s trading, reflecting its safe-haven appeal. Right now, prices are back under 146.512. We’re expecting the Yen to keep gaining, and while our previous outlook was different, we might need to tweak our view depending on how the price plays out near the bottom we called.

USDCHF:

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

USDCAD:

The Loonie is currently trading lower, showing traders exiting the currency. While short-term insecurity toward this currency exists, we expect this market to be bearish or for further strength to emerge. This is supported by several fundamental factors.