General Daily Market Recap – September 23, 2024

Major assets were all over the place on Monday as traders appreciated the Fed’s interest rate cut, escalating tensions in the Middle East and a potential slowdown in global growth.

Which headlines caught traders’ attention in recent trading sessions?

We talk about them below!

Titles:

• New Zealand’s trade deficit rose to NZD 2.20 billion in August, the July deficit was revised higher from NZD 963 million to NZD 1.02 billion
• Judo Bank Australian manufacturing PMI fell from 48.5 to a 52-month low of 46.7 in September; The services PMI fell from 52.5 to a two-month low of 50.6
• HCOB Flash Manufacturing PMI in France for September: 44.0 (44.3 expected, August reading revised higher from 42.1 to 43.9); Services PMI at 48.3 (53.0 expected, 55.0 previously)
• HCOB Flash Manufacturing PMI in Germany for September: 40.3 (expected and previous 42.4); Services PMI at 50.6 (51.1 expected, 51.2 previously)
• HCOB Flash Manufacturing PMI in the Eurozone for September: 44.8 (45.7 expected, 45.8 previously); Services PMI at 50.5 (52.3 est., August reading revised lower from 53.3 to 52.9)
• S&P Global Flash UK manufacturing PMI for September: 51.5 (52.3 expected, 52.5 previously); Services PMI at 52.8 (53.5 est., August reading revised higher from 53.3 to 53.7)
• UK CBI industrial orders expectations worsened from -22 to -35 (expected -23) in September
• US Flash PMI Shows Slower Employment and Rising Inflation in September
• FOMC Voting Member Raphael Bostic cited falling inflation and the labor market outlook as reasons why it supported a 50bp rate cut, adding that “normalizing monetary policy earlier than we thought would be appropriate even a few months ago.“
• FOMC Voting Member Austan Goolsbee favors lowering interest rates “significantly going forward” to account for potential labor market deterioration and delayed monetary policy changes
• Canadian New Home Price Index stagnated (vs. 0.1% expected, 0.2% previously) in August
• have Jibun Bank Japan flash manufacturing PMI for September: 49.6 (expected 49.9, previously 49.8)

Broad Market Price Action:

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

Markets were all over the place on Monday as traders reacted to the Fed’s interest rate cut, rising tensions in the Middle East and worries about slowing global growth.

Crude oil got off to a strong start, supported by rising geopolitical risks and cyclone threats in the Gulf of Mexico. But weak PMI readings in Europe and the US and China, growth concerns took US oil from a high of $71.77 to $69.47, before recovering to settle around 70 .65 USD.

Gold found an uptick in central bank purchases, geopolitical jitters and the Fed’s recent rate cut. The precious metal briefly fell under the weight of USD strength during the London session, but ended the day hitting new record highs at $2,628.

Elsewhere, markets reflected broad support among Fed members for a 50bp rate cut. The S&P 500 and Dow closed at new record highs, while US 10-year yields hit 3.79% before Goolsbee’s speech helped pull them back to 3.75%.

Currency Market Behavior: US Dollar vs. Majors:

USD chart overlay against major currencies by TradingView

The US dollar started the week with modest losses against most of its peers. The only exception was USD/JPY, probably due to the Japanese markets being closed for a holiday. AUD/USD, on the other hand, posted solid gains after the PBOC boosted the economy by cutting the 14-day reverse repo rate by 10 basis points.

The greenback rallied ahead of the London open and gained further momentum as weaker-than-expected European PMI data fueled talk of an ECB rate cut and raised concerns about global growth.

But for USD bulls, the rally didn’t last long. Speculation of further Fed rate cuts soon weighed on the dollar, with weak employment data from US PMI reports and FOMC members supporting last week’s rate cut adding to the pressure. Only after the end of the session in London did the dollar find some stability, pulling back and settling in a range.

Future potential catalysts for the economic calendar:

• RBA policy decision at 4:30 GMT, tap to follow at 5:30 GMT
• BOJ Governor Ueda will give a speech at 5:05 GMT
• German IfO Business Climate at 8:00 GMT
• S&P US Home Price Index at 13:00 GMT
• FOMC voting member Michele Bowman will deliver a speech at 13:00 GMT
• CB US Consumer Confidence at 14:00 GMT
• US Richmond Manufacturing Index at 14:00 GMT
• ECB member and Bundesbank President Nagel will give a speech at 16:00 GMT
• BOC Governor Macklem will give a speech at 5:10 pm GMT
• Australia CPI reports at 1:30 GMT (25 September)

Central bankers will be front and center in the coming trading sessions as the RBA drops its September policy decisions!

Later, FOMC voting member Michele Bowman – the lone dissenter in last week’s decision – will share her two cents during the US session. The ECB’s Nagel and the BOC’s Macklem could also shake up the euro and the Loonie’s price action during their scheduled speeches.

In addition, US mid-level data releases could influence the dollar’s intraweek trends ahead of Friday’s highly anticipated US core PCE price index.

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