General Daily Market Recap – September 16, 2024

Financial markets look mixed as traders prepare for the FOMC decision later this week, while Chinese banks are still closed for the Mid-Autumn Festival.

So far, the US dollar is nearing all-time lows, while gold is nearing its all-time highs.

Check out the latest headlines driving the markets:

Titles:

• Chinese data points released on Saturday proved mostly unfavorable:
  • Industrial production for August: 4.5% y/y (4.7% expected, 5.1% previously)
  • Retail sales fell a further 2.1% y/y (vs. 2.5% expected) in August after a 2.7% drop in July
  • Fixed asset investment rose 3.4% td/y in August (3.5% expected, 3.6% previously)
  • The unemployment rate rose from 5.2% to 5.3% in August
• on weekends another assassination attempt was made on former President Trump in Florida
• Russian President Putin orders army to increase troop strength by 180,000 to 1.5 million
• BOC Governor Macklem reiterated willingness to cut rates more quickly if downside risks increase
• New Zealand’s BusinessNZ services index improved from 45.2 to 45.5 in August; July’s figure was revised higher from 44.6; Employment rose to the highest level since March
• Israeli Prime Minister Netanyahu issued a warning to Yemen’s Houthis after they launched a missile into the country on Monday.
• Swiss PPI for August: 0.2% m/m (0.1% expected, 0.0% previously)
• Rightmove: UK average new seller prices rose 0.8% m/m in September after falling 1.5% in August
• ECB Chief Economist Philip Lane noted that the central bank should continue to gradually reduce interest rates
• The euro area international goods trade surplus was €21.2 billion in July compared to €6.7 billion in July 2024; exports of goods to the rest of the world increased by 10.2% y/y, while imports increased by 4.0% y/y
• Canadian Manufacturing Sales in July: 1.4% YoY vs. 1.7% YoY in June
• Chinese banks are still closed to observe the Mid-Autumn Festival

Broad Market Price Action:

Dollar Index, Gold, S&P 500, Oil, US 10 Year Yield, Bitcoin Overlay Chart by TradingView

Most asset classes saw low volatility at the start of this trading week as Chinese markets were closed for the Mid-Autumn Festival.

Bitcoin and the US dollar fell on the day, while gold traded near record highs, with investors likely playing it safe ahead of the FOMC decision. Even US stock indexes ended on a mixed note, as the Dow and S&P 500 closed in the green, while the Nasdaq ended 0.47% lower.

However, crude oil was an exception as the commodity started in the red, likely digesting the unfavorable Chinese data released over the weekend and its impact on global demand. However, energy commodities soon rose on geopolitical tensions as Israel issued a strong warning to the Houthis after the rebels fired a missile at the country.

Currency Market Behavior: US Dollar vs. Majors:

USD Overlay vs Major Currencies Chart by TradingView

It’s a different story in the forex market as volatility was in play all day, with the US currency getting off to a rocky start against its peers.

Although Japanese markets were on holiday on Monday, USD/JPY continued to fall to a 12-month low, rising only after the Empire State Manufacturing Index came in significantly stronger than expected.

USD/CAD also rallied after the release, with the Loonie barely able to take advantage of anti-dollar moves and a rise in crude oil likely due to another set of dovish remarks from BOC Governor Macklem over the weekend.

The dollar soon resumed its downward trajectory against most of its peers, especially the Aussie, Kiwi and the British pound, dragging the US dollar index close to its all-time lows.

Future potential catalysts for the economic calendar:

• Germany and Eurozone ZEW economic sentiment index at 9:00 GMT
• Canada’s CPI Report at 12:30 GMT
• US retail sales data at 12:30 GMT
• US industrial production and capacity utilization at 13:15 GMT
• Speech by FOMC member Logan at 2:00 GMT
• The New Zealand GDT Dairy Auction is coming up
• Japanese core car orders and trade balance at 23:50 GMT

We have some major players in the market today viz Canada’s inflation numbers and the US retail sales report.

Better watch out for further Loonie weakness if CPI readings miss estimates and underline BOC bias. And be sure to factor in potential changes in Fed rate cut expectations based on Uncle Sam’s consumer spending data.

Don’t forget to check out our new Forex Correlation Calculator!