Explore crucial market trends and events shaping the financial landscape of Asia. Stay ahead with expert insights and analysis.
In the ever-changing landscape of global markets, understanding the key events and trends is crucial for traders and investors. As we delve into the happenings of the US session and the implications for the Asia session, let’s take a closer look at the fundamental factors driving the market today.
US Session Recap
During the US session, Federal Reserve Governor Christopher Waller, along with other FOMC members, observed that the US economy remained robust. Despite some signs of a slowdown, there were indications that the economy might have gained speed, potentially requiring a higher policy rate. The dollar index (DXY) peaked at 105.77 before settling at 105.50 by the session’s end.
What to Expect in the Asia Session
In New Zealand, inflation expectations rose slightly from 2.79% to 2.83% in the third quarter. A weaker-than-expected reading for inflation expectations could negatively impact the Kiwi, acting as a bearish catalyst.
Dollar Index (DXY)
Federal Reserve Chair Jerome Powell, along with Governors Michael Barr and Philip Jefferson, is expected to continue the ‘hawkish’ rhetoric, potentially strengthening the demand for the greenback.
Central Bank Notes
The Federal Funds Rate target range remains unchanged at 5.25% to 5.50%. The Committee aims for maximum employment and inflation at a rate of 2.0% over the longer run. Further policy decisions will depend on economic data and evolving risks.
Asia Unplugged – A Look at Key Market Trends and Events
Gold prices might face downward pressure if the Fed officials maintain their hawkish stance, strengthening the US dollar.
Australian Dollar (AUD)
After a bearish response to RBA’s cash rate announcement, the Aussie retraced but could face continued downward momentum, albeit with temporary upward movements.
New Zealand Dollar (NZD)
New Zealand’s inflation expectations might influence the Kiwi negatively if they fall below market expectations.
Japanese Yen (JPY)
USD/JPY could remain elevated, especially if Federal Reserve Chair Jerome Powell continues with hawkish remarks during his speech.
Weak retail sales in the Eurozone might negatively impact the Euro, with worsening sales figures likely to weigh it down.
Swiss Franc (CHF)
USD/CHF could remain elevated if the Fed Chair’s hawkish remarks persist, affecting the Swiss Franc negatively.
British Pound (GBP)
BoE Governor Andrew Bailey’s speech could provide insights into the UK’s economic outlook, potentially influencing the Pound’s value.
Canadian Dollar (CAD)
The Bank of Canada’s summary of deliberations could shed light on economic conditions affecting USD/CAD, which remain elevated.
Oil Market Analysis
Crude oil prices might stay under pressure due to mixed economic data and weaker demand. A stronger-than-expected drawdown in EIA inventories could provide a temporary lift.
In the next 24 hours, the market bias remains weakly bearish for commodities like gold and oil. The US dollar is on a weak bullish trend against the Japanese Yen and weakly bullish against the Swiss Franc. The outlook for the Euro, British Pound, and Australian Dollar remains weakly bearish, while the Canadian Dollar shows a medium bullish bias.