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ATFX Market Outlook, 2019 September 5
Personal opinions today:
The final reading of the US Markit and ISM manufacturing PMI and the federal reserve's beige book. Today's market focus on U.S. August ADP payroll, the results are directly related to the U.S. August non-farm payrolls tomorrow. The market session is expected to be advanced today following the release of U.S. August ADP payrolls, pending the results of U.S. August non-farm payrolls, the unemployment rate and average wages.
The fed's beige book did not fully reflect the economic downturn, but in the manufacturing sector, it showed manufacturing sector were worried about the impact of a global trade war and the risk of a slowdown affecting manufacturing exports. Elsewhere, consumer confidence continued, and retailers remained confident about the economy and spending going forward. On the inflation front, expect inflation to grow "moderately". But the phrase "moderately" is generally used to mean that inflation has risen only slightly. The odds of a quarter-point interest rate cut by the federal reserve in September are 90.4 per cent, according to CME monitor, US 10-year Treasury yields fell to a 10-year low of 1.425%. Government Bond Fund flows into corporate bonds, indirectly pushing the Dow higher. The dollar fell amid rising cut interest rate expectations, bullish for gold and crude oil. And last night the next President of the European central bank (ECB) said she was considering the negative impact of the central bank's measures and trying to find the right way to push up the Eurozone economy. The British prime minister has overturned a no-deal Brexit by MPS opposed to leaving the European Union. The euro and pound rebounded further.
[Important financial data and events]
Note: * is the degree of importance
13:45 Swiss GDP in Q2 *
German manufacturing orders for July **
15:30 German construction PMI for August *
20:15 U.S. ADP payroll in August ***
20:30 U.S. Initial and continuing jobless claims *
21:45 U.S. Markit Service PMI final for August **
22:00 U.S. factory orders in July **
22:00 U.S. non-manufacturing PMI for August **
23:00 EIA crude oil inventories change *
24:00 Swiss national bank President speaks **
The Euro rebounded, as the next President of the European central bank, interpreted the ECB's loose monetary policy. The dollar fell, and the euro extended its rebound after the August ISM manufacturing PMI was followed today by U.S. ADP payrolls and initial and continuing jobless claims. With the fall in the dollar, the Euro recovered, 1.1015 the critical resistance. The Euro has now hit a 23.6% rebound at 1.1038. Expect to test the 10-day and 20-day moving averages until U.S. jobs data is released and see the euro next moves.
The risk of a no-deal Brexit cooled as markets waited for U.S. jobs data over the next two days, indirectly bullish the British pound. Technically, the pound broke through the hour chart rebound wave 50%, hit 85.2% 1.2250. Since the U.S. ADP payroll for August released today, it will directly affect the US non-farm payrolls data tomorrow. Weak U.S. jobs data could push the pound up to its two-week high of 1.2310.
The federal reserve's beige book of economic conditions contains some concerns that it could reflect a recession in the United States and harm the dollar. Today, U.S. August ADP payroll release, it will have a direct impact on the US non-farm payrolls data tomorrow. If the dollar's decline continues, the Australian dollar will continue to rise against the greenback. Technically, the Aussie dollar broke through the resistance of 0.6805 indicated by this analysis yesterday. If the Aussie can continue to grow, the reference resistance is 0.6820 and 0.6860. Typically, the New Zealand dollar follows the Australian dollar up.
Global stocks rebounded as the yen fell and USDJPY investors turned to equities. Believe Dow futures and Nikkei futures trend, continue to dominate the USDJPY. Take note of today's U.S. ADP payroll performance, leading the U.S. Dow to global stock market changes, indirect impact on the USDJPY. Weakness in the U.S. jobs report over the next two days will be bearish for the stock market and thus the USDJPY. Technically, the Dow futures and Nikkei continue to rise. It is because we calculate the USDJPY that will test 106.75 and 107.00 resistance.
The bank of Canada held interest rates steady at 1.75%, moderating the slide in the Canadian dollar and taking into account the country's July trade deficit. Crude oil prices rebounded and also gained Canadian dollars. Technically, the USDCAD recover significant resistance 1.3350. Take note today of the release of the U.S. ADP payroll for August, which will have a direct impact the US non-farm payrolls data release tomorrow. At the same time, it can predict whether the decline in the U.S. dollar will continue, or rebounding.
US crude oil futures
Crude oil prices were boosted yesterday by the federal reserve's beige book on economic conditions, which eased recession fears in the United States. But U.S. API crude stocks rose and U.S. August ADP payroll today could weigh on crude prices. Whether crude oil prices can break through 56.60 is in doubt. Technically, the reference resistance level is 56.60, compared with a high of 56.85 in August. As a short-term trend, the 10-hour average at 56.15 can be used as a reference.
The downbeat outlook from the beige book affects August job data over the next two days. Gold prices were buoyed last night by signs of US recession signals and investors' growing expectations that the federal reserve will cut interest rates. Please pay attention to the outcome of U.S. ADP payroll today. If the data is weak, note that expectations of a Fed rate cut are rising, bullish gold prices. The technical references are 1551 and 1556, respectively. Support bits indicate the 1536 and 1531 support. Assuming in the U.S. trading session early today, gold prices fluctuated.
U.S. Dow Jones industrial average futures US30
The US President has once again stressed the terms of the trade deal with China, which has gradually strained the investment sentiment. Then came the weak August reading of the Michigan consumer confidence index and the ISM manufacturing PMI. The U.S. beige book report, which contained risks to the U.S. economy, turned as expectations of a Fed rate cut rose. Technically, Dow futures broke through the resistance 26535 in Asian markets today. If the U.S. ADP payroll is weak today and investment sentiment is low, Dow futures may adjust and fall before Dow spot open. Please pay attention to Dow downside risk if the job data are more moderate than expected.
10850 /11150 resistance
10350 / 10050 support
If trade tensions, bullish the gold price and cryptocurrencies demand. The bitcoin price followed the gold price rose. Yesterday here we mentioned again, the US Michigan consumer sentiment index very bad. U.S. ISM manufacturing PMI is expected to be weak, the bitcoin price upward. That could affect the FOMC monetary policy decision. It could cut interest rate and could let the bitcoin price rise. Please keep on eyes today, the US ADP payroll. If the US job data lower than expected, bullish cryptocurrencies and bitcoin price.
Enjoy trading! The content is for reference only. Please do ensure that you understand the risk.
Information provided by AT Global Market, Chief Analyst of Asia Pacific: Martin Lam
Registered Australian Accountant/ Certified Professional Manager / Certified Financial Advisor Experienced Investor / Media Market Commentator Martin Lam has Over 17 years’ experience in global investment market. Familiar with the worldwide stock indices, precious metals such Gold and Silver, Crude oil and Forex. He operated Martin Currency Trading Company and had partnership with a number of well-known international financial corporations and institutions. Before he join ATFX, he was TeleTrade Greater China development and Sales Director. Mr. Lam attends Hong Kong Now TV and China CCTV finance channel once a week. He also had regularly invited by different media, such as DBC Digital Financial Channel, Hong Kong Economic Times, The Standard, Ming Pao to share his experience to trade in Forex, Precious metals, Crude oil and worldwide stock indices.
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