Stay updated with financial focus on Asia market trends. US Producer prices rose, impacting currencies: key events and market outlook.
US Session Recap
In September, Producer prices (PPI) in the US rose by 0.5% MoM, marking the lowest increase in three months but surpassing the market’s 0.3% forecast. Goods prices surged by 0.9% MoM, driven by a 5.4% increase in gasoline prices. PPI rose from 2.0% YoY to 2.2% YoY. Minutes from September’s FOMC meeting revealed a cautious approach to further interest rate hikes, with officials agreeing on the need for continued rate restrictiveness. Despite the hawkish tone and the ‘hot’ PPI data, the Dollar Index (DXY) fell to 105.70 by the session’s close.
Financial Focus – Asia Market
As measured by the Melbourne Institute (MI), consumer inflation expectations in Australia dropped to 4.6% YoY in September from 4.9% – the lowest since April. Further softening would align with the RBA’s view of easing cost pressures. The Aussie was trading around 0.6420 before the data release.
Key Events Today
US CPI (12:30 pm GMT): August’s Consumer Price Index (CPI) stood at 3.7% YoY, exceeding expectations. Rising oil prices might sustain this trend. The forecast for September is 3.6% YoY. A lower CPI could negatively impact the US dollar. Rising unemployment claims, observed recently, might further pressure the currency downward.
Central Bank Updates
Federal Funds Rate: 5.25% to 5.50%
Committee’s Inflation Target: 2.0%
Next FOMC Meeting: October 31 to November 1, 2023
Dollar Index (DXY) Outlook: Medium Bearish
Gold (XAU) Outlook: Medium Bullish
Australian Dollar (AUD) Outlook: Medium Bullish
New Zealand Dollar (NZD) Outlook: Weak Bullish
Japanese Yen (JPY) Outlook: Weak Bullish
Euro (EUR) Outlook: Weak Bullish
Swiss Franc (CHF) Outlook: Medium Bearish
British Pound (GBP) Outlook: Weak Bullish
Canadian Dollar (CAD) Outlook: Weak Bullish
Oil Market Outlook: Strong Bearish
Critical Energy Market Update
EIA Crude Oil Inventories (3:00 pm GMT): API data indicated a significant crude build. Analysts expect EIA inventories to demonstrate a small drawdown, but even a more substantial decrease might not boost crude prices.
Market Sentiment for the Next 24 Hours: Strong Bearish for Oil, with a Mixed Outlook for Major Currencies.
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