September 08 2021 Daily Forex Analysis - Finveo
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September 08 2021 Daily Forex Analysis
Daily News
• Concerns about the delta variant in global markets again cast a shadow over the pricing. While the market actors followed the messages from the Fed
executives, they also focused on the decision to be made by the European Central Bank. Asia Pacific equities markets are mixed as traders continue to measure
the delta variant barrier to economic recovery. After the Japanese economy grew by an annualized 1.9 % quarterly in the second quarter, exceeding the 1.6 %
expectation, Japanese stock markets are positively differentiated in Asia. Topix and Nikkei traded up 225 %. Hong Kong Hang Seng fell 0.5 %, while China's
Shanghai Composite also showed a flat outlook. The shares of China-based holding company Evergrande, which has recently come to the fore with its high
debts, fell below the 2009 public offering price after Moody's and Fitch downgraded the company's rating. After the U.S bond auctions, the yield on the U.S 10-
year bond stabilized at 1.36 %. U.S stock futures are flat this morning. The growth recorded in the economy in Japan in the second quarter was revised upwards
with the support of high capital expenditures, despite the slowdown in the service sector after the Covid-19 cases increased again. According to the revised
gross domestic product (GDP) data released today, annual growth in the second quarter was revised to 1.9 % from 1.3 %. Economists had expected the
economy to grow 1.6 %.
• In the second quarter of 2021, seasonally adjusted GDP increased by 2.2% in the euro area and by 2.1% in the EU compared with the previous quarter,
according to an estimate published by Eurostat, the statistical office of the European Union. In the first quarter of 2021, GDP had declined by 0.3% in the euro
area and 0.1% in the EU. Compared with the same quarter of the previous year, seasonally adjusted GDP increased by 14.3% in the euro area and by 13.8% in
the EU in the second quarter of 2021, after -1.2% in both zones in the previous quarter. During the second quarter of 2021, GDP in the United States increased
by 1.6% compared with the previous quarter (after +1.5% in the first quarter of 2021). Compared with the same quarter of the previous year, GDP increased by
12.2% (after +0.5% in the previous quarter). The dollar hovered near a one-week peak on Wednesday against major peers, buoyed by higher Treasury yields
and a weaker euro amid caution before a European Central Bank policy decision. The dollar index, which measures the currency against six rivals, was little
changed at 92.553, just below Tuesday's high of 92.571, a level not seen since Sept. 1.
• British Prime Minister Johnson, in his speech today, announced that tax increases will be made for employees and companies in order to save the national
health service, which has been negatively affected by the pandemic period, and to reform the 'deteriorated' social security system. Accordingly, the National
Insurance (NI) tax will be increased by 1.25% from next year. With this increase, the Conservative Party's commitment not to increase taxes was also broken.
• EUR/USD is holding steady below 1.1850, fading the corrective bounce, as the U.S dollar regains poise amid a cautious
EUR/USD mood. Pre-ECB trading and Delta covid woes keep investors on the edge amid upbeat Eurozone GDP and weaker U.S
Treasury yields. The major currency pair initially recovered after the U.S 10-year Treasury yields pause around the two-
month top, down one basis point to 1.36% by the press time. However, the U.S Dollar Index (DXY) refrains from tracking the
bond coupon to the south and stays firmer around 92.55 following the biggest daily jump in three weeks. Other than the
virus and stimulus chatters, market participants remain divided over the European Central Bank’s (ECB) next move and
underpin the U.S dollar’s safe-haven demand. For intraday, comments from the New York Fed President John C. Williams will
be the key as traders weigh economic hardships in the U.S, due to the COVID-19, to forecast tapering. Additionally, risk
catalysts like stimulus headlines and virus updates will also be important for near-term guidance.
• Resistance: 1,1855– 1,1870- 1,886
• Support: 1,1834– 1,1812 - 1,1792
• GBP/USD records third straight day fall on Wednesday. U.S Dollar Index remains strong above 92.50 despite a downtick in the
Treasury yields. Tax hike and Brexit concerns weighed on the prospects of the sterling. The GBP/USD pair witnessed heavy
GBP/USD selling on Tuesday and retreated further from the vicinity of the 1.3900 mark, or multi-week tops touched in reaction to
dismal headline NFP print. The U.S dollar was back in demand in the wake of a strong follow-through positive move in the US
Treasury bond yields. This, in turn, was seen as a key factor that exerted downward pressure on the major. In fact, the yield
on the benchmark 10-year U.S government bond shot to 1.385%, or the highest level since mid-July amid expectations for an
imminent Fed taper announcement in November. On the other hand, the British pound was pressured by British Prime
Minister Boris Johnson's plans on Tuesday to introduce a new 1.25% health and social-care levy on earned income.
• Resistance: 1,3810 – 1,3850 - 1,3895
• Support: 1,3770– 1,3730 - 1,3680
• Gold prices fell below $1,800 after the rise in U.S 10-year bond yields. Gold prices fell below $1,800 ahead of the European
XAU/USD Central Bank meeting and Dallas Fed President Robert Kaplan's speech. Robert Kaplan, known as one of the hawkish Fed
chairmen, will deliver an online speech Wednesday, while gold investors focus on President Christine Lagarde's speech after
the ECB's meeting on Thursday for a clue on the asset-buying reduction path. The 10-year U.S Treasury bond yield, after
rising nearly 6 basis points to 1.38 % on Tuesday, declined and followed a flat course of around 1.36 %. Last week, as
investors focused on employment data, the ounce of gold, which completed the week with a relatively flat course, rose to
$1,833 after the non-farm employment data announced on Friday. While gold fell below its 200-day moving average on
Tuesday, it is trading at $ 1,798 on Wednesday, close to its 50-day moving average.
• Resistance: 1804 $ - 1813 $ - 1823 $
• Support: 1789 $ - 1780 $ - 1775 $
• Oil is flat on Wednesday after falling for two days after news of Saudi Arabia's cuts Oil prices are trending sideways as
investors focus on the demand outlook after two days of declines. Futures are trading at $68 a barrel in the New York market
BRENTOIL after falling more than 2% in the past two days. Vanda Insights Founder Vandana Hari said current trading is driven by
uncertainty over prices and a reasonable recovery could come soon, but needs support from U.S stock data. Oil markets had
started the week lower after the news of Saudi Arabia's discount for Asian customers. West Texas Oil for October delivery is
trading at $68.41 a barrel, up 0.1 % after falling 2.3 % in the last two sessions on the Nymex market. Brent oil for November
delivery is down 0.7 % at around $71.61 a barrel on the London ICE Futures Europe market.
• Resistance: 72,61 $ - 73,45 $ - 74,27 $
• Support: 70,97 $ - 70,08 $ - 69,00 $
• Stocks fell on Tuesday, with Wall Street indices retreating from last week's record highs, with analysts closely watching the
labor market as rising COVID-19 infections cloud the outlook. With the trading week shortened by Labor Day, traders will be
S&P500 keeping an eye on producer prices data for hints at inflation pressures, as well as the end of a crucial source of
unemployment insurance during the pandemic. According to a Goldman Sachs analysis, "unemployed workers whose benefits
ended early saw a statistically significant increase in their re-employment probability .So we expect the benefit expiration to
boost job growth in coming months.’’ Meanwhile, Wall Street has begun scaling back expectations for growth. Goldman Sachs
cut its forecast for fourth-quarter growth, citing a "harder path ahead" for consumer spending in the face of rising COVID-19
infections.
• Resistance: 4,531 – 4,545 – 4,557
• Support: 4,510 – 4,497 – 4,481Daily Stock News • GameStop (NYSE: GME), Options traders are expecting comparatively subdued moves in GameStop (NYSE: GME) Inc shares around its earnings report, as the company that helped spark the so-called meme stock phenomenon prepares to report quarterly results on Wednesday. Traders are pricing a 14% swing for GameStop's shares by Friday, according to pricing in options expiring at the end of the week. By comparison, the video game retailer’s shares have moved about 30% on the day after each of its last two earnings reports. The expectations for smaller stock swings comes as the daily moves in GameStop’s shares have also grown tighter. The company’s shares have logged average daily moves of around 3.6% in either direction over the last month, compared with average daily moves of 12% for the first half of the year. (Neutral) • Tesla Inc. (NASDAQ: TSLA), The European Union in January approved a plan that includes giving state aid to Tesla, BMW (BMWG.DE) and others to support production of electric vehicle batteries and help the bloc to reduce imports from industry leader China. The EU's approval of the 2.9 billion euro ($3.45 billion) European Battery Innovation project, which includes more than 40 companies, follows the launch in 2017 of the European Battery Alliance to support the industry during the shift away from fossil fuels. Tesla plans to invest 5 billion euros in its battery cell factory at Gruenheide near Berlin to complement its nearly finished electric car factory at the same location, according to estimates from the German economy ministry. Germany will probably decide by the end of the year how much state aid U.S. electric vehicle maker Tesla (TSLA.O) will receive for its planned battery cell factory near Berlin, an economy ministry spokesperson said on Sunday. (Positive) • Deutsche Telekom AG (XETR: DETGn), will use proceeds from the sale of its Dutch unit to acquire a greater stake in T-Mobile US Inc., deepening its shift to the U.S. market where it leads the industry in the next generation of mobile technology. Warburg Pincus and Apax Partners will purchase T-Mobile Netherlands for 5.1 billion euros ($6.1 billion) from Deutsche Telekom and venture partner Tele2, which owns a 25% stake, the private equity firms said Tuesday. Bloomberg reported on Monday that the German company was nearing a deal and that the private equity consortium was a strong contender. (Positive)
Currency Last Daily Change (%) Weekly Change (%) YTD Change (%)
EURUSD 1,1834 -0,05 -0,39 -3,13
GBPUSD 1,3764 -0,16 -0,77 0,69
USDJPY 110,39 -0,10 -0,62 -6,47
USDCHF 0,9203 -0,05 -0,74 -3,80
EURGBP 0,85976 -0,09 -0,29 3,95
INDEX FUTURE Last Daily Change (%) Weekly Change (%) YTD Change (%)
SPA INDEX 4514,7 -0,10 -0,43 21,04
GXA INDEX 15831 -0,07 0,34 15,25
DMA INDEX 35081 -0,02 -0,76 15,66
Commodities Last Daily Change (%) Weekly Change (%) YTD Change (%)
GC1 Comdty 1795,5 -0,04 -1,97 -5,26
XAUUSD Curncy 1795,06 0,02 -1,80 -5,46
CLA Comdty 68,75 0,61 -0,75 43,24
CO1 Comdty 72 0,47 -0,80 39,05
Time Cur. Event
16:00 USD JOLTs Job Openings (Jul)
20:00 USD Beige BookYou can also read
