✅ Daily Market Analysis - TUESDAY SEPTEMBER 19, 2023
Key events:
Eurozone - CPI (YoY) (Aug)
USA - Building Permits (Aug)
On Monday, the major stock market indices on Wall Street displayed fluctuating movements, with particular attention on energy stocks closely following the surging prices of crude oil. Investors were also eagerly awaiting the upcoming interest rate decision from the Federal Reserve.
Within the sectors of the S&P 500, the energy sector emerged as the top performer, posting a gain of 1.1%. This gain reflected the strengthening of crude oil prices, which approached the significant threshold of $95 per barrel due to ongoing supply constraints.
The continued upward trajectory in crude oil prices has raised concerns about the persistence of inflationary pressures, despite a series of recent economic data releases surpassing expectations. While these positive economic indicators have eased concerns of an imminent recession, they have not triggered fears of an interest rate hike in September.
The Dow Jones Industrial Average managed a marginal gain of 0.02%, equivalent to an increase of 6 points, while the Nasdaq remained relatively stable with a slight 0.01% uptick. The S&P 500 concluded the day with a modest gain of 0.1%.
NASDAQ index daily chart
SPX index daily chart
DJI index daily chart
Apple, trading under the ticker symbol AAPL on the NASDAQ, experienced a notable uptick in its stock price, surging by more than 1%. This increase has garnered optimism from certain sectors of Wall Street, particularly with regards to the heightened demand anticipated for Apple's recently unveiled iPhone 15. The optimism is particularly pronounced for the premium iPhone Pro and Pro Max variants, which is a notable departure from the initial reception of the iPhone 14.
Apple stock daily chart
However, it's important to note that not all perspectives on Wall Street are as optimistic about the iPhone 15's debut. Barclays, for example, pointed out that initial pre-order data suggested a potentially challenging cycle for the iPhone 15 in China. In this market, it seems that demand is tilting towards the more affordable variant of the iPhone 15.
Shifting our focus to the financial markets, the GBP/USD pair has once again concluded a trading session below the critical 200-day moving average (SMA 200). What's particularly noteworthy is that this breach occurred not only during today's trading session but also in the previous week.
GBP/USD + SMA 200 daily chart
The upcoming Bank of England (BOE) decision slated for Thursday adds an element of intrigue to the financial landscape. While market expectations include a 25-basis-point rate hike and an expansion of quantitative tightening measures by the BOE, there is also the potential for dovish commentary from the central bank. Such remarks could exert additional downward pressure on the GBP.
In the realm of precious metals, gold prices have experienced a three-day uptrend, surging to $1,930.00 per Troy ounce as of Monday. This rally appears to be fueled by investors seeking a safe haven amid uncertainties surrounding significant events scheduled for later this week.
XAU/USD daily chart
Investors are currently honing their attention on the imminent decision from the US Federal Reserve, an event widely anticipated to result in the maintenance of the interest rate at the current 5.5% per annum. What will likely be of primary interest during this event is the Fed's evaluation of the economy and inflation, as this will provide crucial insights into the central bank's potential future actions.
The allure of gold has been further enhanced by the abrupt depreciation of the yuan exchange rate, rendering the precious metal even more appealing as a safe-haven asset.
In the currency market, the dollar index is presently holding its ground, maintaining a position just below a 6-month high as of Monday.
US Dollar Currency Index daily chart
Taking a step back to examine the broader perspective, recent short-term movements have been characterized by a recurring sideways pattern for the third consecutive week. This period of sideways trading has seen bullish momentum repeatedly encountering significant resistance.
The overall trajectory of the dollar hinges significantly on the actions of the Federal Reserve. Should the Fed opt to follow in the footsteps of the European Central Bank and announce the conclusion of its tightening cycle, possibly hinting at the potential for rate cuts beginning in mid-2024, it could result in a weakening of the dollar.
On the flip side, one should not dismiss the prospect of a hawkish stance from the Fed. Recent data indicates that the US economy remains robust, boasting a tight labor market. While inflation remains elevated, there are signs of it moving on a downward trajectory. In this scenario, it becomes plausible that the Fed might pursue one more interest rate hike before the year's end, opting to maintain higher interest rates for an extended period until inflation retraces to its 2% target. In such a scenario, the greenback would likely reap the benefits of a stronger position.
Shifting our attention to the Australian dollar, it continues to display a lackluster performance as the new trading week kicks off. During Monday's European session, AUD/USD was trading at 0.6438, indicating a modest 0.11% increase.
AUD/USD daily chart
The Reserve Bank of Australia (RBA) has recently published the minutes from its most recent meeting. During this meeting, the RBA chose to maintain the status quo for the third consecutive month, leaving the official cash rate at 4.10%. This decision occurred in the final meeting led by former Governor Philip Lowe, who acknowledged that inflation had "reached its peak" but was still "uncomfortably high and is likely to remain so for an extended period." This statement left room for potential future rate hikes. However, prevailing market sentiment appears to lean towards a more dovish outlook, with expectations that the RBA may consider lowering rates at some point in 2024. Investors will be carefully analyzing the minutes for any indications or insights into the RBA's prospective rate decisions.
Eurozone - CPI (YoY) (Aug)
USA - Building Permits (Aug)
On Monday, the major stock market indices on Wall Street displayed fluctuating movements, with particular attention on energy stocks closely following the surging prices of crude oil. Investors were also eagerly awaiting the upcoming interest rate decision from the Federal Reserve.
Within the sectors of the S&P 500, the energy sector emerged as the top performer, posting a gain of 1.1%. This gain reflected the strengthening of crude oil prices, which approached the significant threshold of $95 per barrel due to ongoing supply constraints.
The continued upward trajectory in crude oil prices has raised concerns about the persistence of inflationary pressures, despite a series of recent economic data releases surpassing expectations. While these positive economic indicators have eased concerns of an imminent recession, they have not triggered fears of an interest rate hike in September.
The Dow Jones Industrial Average managed a marginal gain of 0.02%, equivalent to an increase of 6 points, while the Nasdaq remained relatively stable with a slight 0.01% uptick. The S&P 500 concluded the day with a modest gain of 0.1%.
Apple, trading under the ticker symbol AAPL on the NASDAQ, experienced a notable uptick in its stock price, surging by more than 1%. This increase has garnered optimism from certain sectors of Wall Street, particularly with regards to the heightened demand anticipated for Apple's recently unveiled iPhone 15. The optimism is particularly pronounced for the premium iPhone Pro and Pro Max variants, which is a notable departure from the initial reception of the iPhone 14.
However, it's important to note that not all perspectives on Wall Street are as optimistic about the iPhone 15's debut. Barclays, for example, pointed out that initial pre-order data suggested a potentially challenging cycle for the iPhone 15 in China. In this market, it seems that demand is tilting towards the more affordable variant of the iPhone 15.
Shifting our focus to the financial markets, the GBP/USD pair has once again concluded a trading session below the critical 200-day moving average (SMA 200). What's particularly noteworthy is that this breach occurred not only during today's trading session but also in the previous week.
The upcoming Bank of England (BOE) decision slated for Thursday adds an element of intrigue to the financial landscape. While market expectations include a 25-basis-point rate hike and an expansion of quantitative tightening measures by the BOE, there is also the potential for dovish commentary from the central bank. Such remarks could exert additional downward pressure on the GBP.
In the realm of precious metals, gold prices have experienced a three-day uptrend, surging to $1,930.00 per Troy ounce as of Monday. This rally appears to be fueled by investors seeking a safe haven amid uncertainties surrounding significant events scheduled for later this week.
Investors are currently honing their attention on the imminent decision from the US Federal Reserve, an event widely anticipated to result in the maintenance of the interest rate at the current 5.5% per annum. What will likely be of primary interest during this event is the Fed's evaluation of the economy and inflation, as this will provide crucial insights into the central bank's potential future actions.
The allure of gold has been further enhanced by the abrupt depreciation of the yuan exchange rate, rendering the precious metal even more appealing as a safe-haven asset.
In the currency market, the dollar index is presently holding its ground, maintaining a position just below a 6-month high as of Monday.
Taking a step back to examine the broader perspective, recent short-term movements have been characterized by a recurring sideways pattern for the third consecutive week. This period of sideways trading has seen bullish momentum repeatedly encountering significant resistance.
The overall trajectory of the dollar hinges significantly on the actions of the Federal Reserve. Should the Fed opt to follow in the footsteps of the European Central Bank and announce the conclusion of its tightening cycle, possibly hinting at the potential for rate cuts beginning in mid-2024, it could result in a weakening of the dollar.
On the flip side, one should not dismiss the prospect of a hawkish stance from the Fed. Recent data indicates that the US economy remains robust, boasting a tight labor market. While inflation remains elevated, there are signs of it moving on a downward trajectory. In this scenario, it becomes plausible that the Fed might pursue one more interest rate hike before the year's end, opting to maintain higher interest rates for an extended period until inflation retraces to its 2% target. In such a scenario, the greenback would likely reap the benefits of a stronger position.
Shifting our attention to the Australian dollar, it continues to display a lackluster performance as the new trading week kicks off. During Monday's European session, AUD/USD was trading at 0.6438, indicating a modest 0.11% increase.
The Reserve Bank of Australia (RBA) has recently published the minutes from its most recent meeting. During this meeting, the RBA chose to maintain the status quo for the third consecutive month, leaving the official cash rate at 4.10%. This decision occurred in the final meeting led by former Governor Philip Lowe, who acknowledged that inflation had "reached its peak" but was still "uncomfortably high and is likely to remain so for an extended period." This statement left room for potential future rate hikes. However, prevailing market sentiment appears to lean towards a more dovish outlook, with expectations that the RBA may consider lowering rates at some point in 2024. Investors will be carefully analyzing the minutes for any indications or insights into the RBA's prospective rate decisions.
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