The following article was written by ATFX Chief Analyst of Asia Pacific, Martin Lam.
Today, the US Labor Day holiday, the US stock market is closed for one day. US markets, foreign exchange, metals and energy transactions closed ahead of schedule. Please attention!
International rating agencies said last week that they intend to lower the Italian sovereign rating, and the current Italian sovereign rating is above the junk level. If it is downgraded, increasing the risk of Italian bonds, the interest rate needs to be raised, affecting Italy’s debt issuance and repayment of debt costs. In theory, the negative development of the Italian state indirectly affects the euro and the euro. At the same time, other European currencies.
Looking back on last Wednesday, the US second-quarter GDP revision is the best value. The market expects US employment data to improve this week compared to last month. It is expected to have an opportunity to grow, and it is expected that the Fed will raise interest rates by 0.25% on September 27. Overall economic performance, bullish dollar. However, the interest rate hike is negative for the stock market and global stock markets, and the stock market adjustment will continue. But the US stock market is closed tonight, and there is no US economic data. Therefore, it is estimated that it is difficult to reflect today.
In the afternoon, Bank of Japan Governor Haruhiko Kuroda hosted the event and gave a speech. The market is concerned about the speech of the Bank of Japan Governor and will release the position of Japan’s monetary policy. In addition, in the afternoon, Germany, the United Kingdom and the euro zone respectively announced the August manufacturing purchasing managers index PMl, the recommendations are worthy of reference. If it wins expectations, it is expected to boost the euro. The Reserve Bank of Australia’s interest rate decision tomorrow, the market generally believes that interest rates remain unchanged. The main focus is on the Reserve Bank of Australia’s monetary policy statement, which is particularly important for future economic assessments and expected future monetary policy.
The US economy grew in the second quarter, and the euro zone remained in place. The Italian economy is slowing, and the market is worried that Italy is dragging down economic growth in the euro zone. All of the above are still negative for the euro. This week’s US job data is expected to dominate the dollar. If the US job data is stronger than market expected, it will be bearish the euro.
The UK is expected to arrange a new agreement with the EU to avoid “hard Brexit” without agreement. But unfortunately there are other news that the UK is negotiating with the EU to maintain the protection of the UK economy. The news made the market believe that the negotiations between the UK and the EU are still in place, even failing, and the price is good.
The trend of the euro generally develops with the Swiss franc. At present, the US economy has grown in the second quarter, and the Eurozone is still in place. The Italian economy is slowing, and the market is worried that Italy is dragging down economic growth in the euro zone. All of the above are still negative for the euro indirect negative Swiss franc. This week’s US job data is expected to dominate the dollar. If the US job data is stronger than market expected, the dollar will rise against the Swiss franc.
The short-term global stock market performance has repeatedly triggered the same trend of the US dollar against the yen. However, the medium and long-term line mainly depends on the performance of the US dollar. This week, we can use the US job data to predict the trend of the dollar. If the US job data is strong, it is bad for the yen.
Australian dollar against the dollar
If the United States finally implements a new policy to combat the Chinese economy and simultaneously crack down on Australian exports, it will continue to bearish the Australian dollar. So the Australian dollar is still on the downside. But you must pay attention to any good news and change the downward trend of the Australian dollar.
If the United States finally implements a new policy to combat the Chinese economy and simultaneously crack down on New Zealand exports, it will be bad for the New Zealand dollar. Therefore, the Australian dollar is still in the downward trend recently, and the New Zealand dollar remains in a downward trend. But we must pay attention to any good news and change the downward trend of the Australian dollar and the New Zealand dollar.
Earlier, the United States agreed that Canada would reopen North American trade negotiations, with a bullish Canadian dollar. But in the end, the Canadian government did not accept the negotiation plan, which disappointed the market and was bad for the Canadian dollar. It is expected that there will not improve the relationship. The Canadian dollar is still bearish.
The Brexit treatment programme has not seen any progress, and the less negotiation time, the bad news for pounds. Note that the direction of the EURGBP has changed. After a chance to break through 0.8990, the trend has further up.
With the release of the consumer price index CPl in Switzerland tomorrow, Italy’s bad news affects the euro. It is expected that the trend of the EURCHF, it will be change and let EURCHF rebound from the lower. But whether the trend has changed is still being observed.
US second-quarter GDP revision data is rising, and US inflation is expected to increase, curbing gold’s rise. This week’s US economic data, especially job data, is expected to positive US dollars, while strengthening the Fed’s interest rate hike, will have the opportunity to further negative gold.
US crude oil futures:
Sino-US trade wars may increase further, or may affect crude oil demand. However, with the end of the third quarter economic quarter, the increase in demand for crude oil begins in the fourth quarter of each year and is expected to support oil prices. If the short-term crude oil price is adjusted, the underlying support will exist. It is expected that crude oil prices will rise in the fourth quarter. Challenge $75 to $80. However, on the eve of the Fed’s interest rate decision, it could be negative for oil demand and the price. Technically, you can still pay attention to the adjustment of oil prices.
7020 / 6870 support
The Fed chairman’s remarks stimulated the rebound in crypto currencies. The bitcoin keeps reach higher resistance. However, the US GDP record high and the interest rate trends to increase. Coming Wednesday and Friday, US job data as very important. If finally the job data growth strengthen, It could be affected the demand of crypto currencies. The bitcoin started to downward and other crypto currencies could be followed.
Enjoy and happy trade! The content is for reference only. Please do ensure that you understand the risk. Wish Happy trading!
Information provided by ATFX, 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. Contact: [email protected] or wechat: ATFX_China
Legal: ATFX is a trading name of AT Global Markets Limited (ATGM, registration number 24226 IBC 2017). ATGM is an International Business Company in Saint Vincent and the Grenadines. Registered address is: the Financial Services Centre, Stoney Ground, Kingstown, St.Vincent & the Grenadines.