Today's Biggest Market News

Market Overview

Iran is Ready for War？

America has made a significant move, deploying the THAAD Missile Defense System and a hundred American troops. President Biden stated this was to defend Israel.

This large commitment to Israels defense raises concerns. Over the weekend, Iran warned that it was prepared for war but also open to peace, insisting the conflicts in Lebanon and Gaza must be resolved.

Israel is escalating its operations in Lebanon and Gaza, with bigger plans to strike Iran. Their failure to resolve issues in Lebanon and Gaza suggests that Iran may retaliate on a larger scale than before. To prepare, Israel is focusing on securing its own territory, especially after its defenses were breached by ballistic missiles, which severely impacted infrastructure.

Iran has also stated there is no basis for indirect talks with the U.S. until the issues in West Asia are resolved. In other words, no contact or chance for peace talks and agreements for de-escalation before they resolve their conflicts with Gaza and Lebanon.

Oil prices have dropped despite rising tensions. Sources indicate that oil demand has decreased, particularly in China due to its sluggish economy. This has led to lower oil prices even amidst escalation. However, there remains a possibility of a sudden surge in oil prices if Israel targets Iranian oil facilities, which could push oil prices past $100/barrel. The Central Banks conitnue to watch the developments in this war, particularly with Oil's prices on the line. A sudden Oil inflation may change the course of the markets--despite active efforts of keeping everything in check.

MARKET ANALYSIS

GOLD

GOLD remains flat after yesterday‘s trading, consolidating slightly below 2653.515. A bearish trend may continue if 2643.644 holds as support and 2653.515 remains as resistance. We await further price movements to determine the market’s direction.

SILVER

SILVER remains consolidated without significant movement. We will observe further price action for confirmation.

DXY

The U.S. central bank initiated its easing cycle with a 50 basis point cut at its September policy meeting. Currently, traders assign an 89% chance of a 25 bps cut in November, with 45 bps of easing expected for the year. (FEDWATCH)

The Dollar is rising due to a positive economic outlook and increased trading in safer alternatives, despite expectations of moderate rate cuts in November and December.

GBPUSD

BOE Governor Andrew Bailey expressed optimism that cost-of-living pressures have not been as persistent as feared. However, he warned that the Bank of England is monitoring the Middle East crisis, concerned about a potential oil price shock. This caution is reflected in the Pound's recent technical downward trend. We continue to monitor the markets reaction to Middle East tensions.

However, chances of a more aggressive rate cut in the coming months until the end of the year is on the table if things in Middle East align.

AUDUSD

The Aussie dollar remains flat and consolidated between 0.67531 and 0.67142. Despite the Dollars recovery, prices are struggling to break lower. We await further price action for confirmation.

NZDUSD

No changes are noted in the Kiwi as prices remain stagnant and consolidated. We await further price movements for clarity.

EURUSD

The Euro is expected to see rate cuts this week. The European Central Bank (ECB) is poised to deliver its third interest rate cut of the year during its Thursday meeting, as inflation risks ease faster than expected. Sources suggest the markets are pricing in a 25-bps reduction in October and a follow-up cut to 3% at the ECB's December meeting. Market expectations for quicker monetary easing have increased, supported by dovish remarks from ECB officials and cooler inflation data from eurozone states like Germany. Bank of France Governor Francois Villeroy de Galhau confirmed that an October rate cut is "very likely," and hinted at further cuts.

USDJPY

The Yen continues to rise as expected, with no changes to our readings.

USDCHF

The Franc has broken upward after failing to breach 0.85541. We continue to expect further buying momentum until the price signals a shift in direction.

USDCAD

Oil prices remain low due to weaker demand, despite tensions in the Middle East. However, we anticipate potential changes if the situation in West Asia intensifies. We will continue to monitor this market for developments.