U.S. Indices and Metals Falling, U.S. Inflation Slowdown, U.S. Resilient Labor Market, Deal Saves U.S. Government Shutdown, NFP Ahead

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PREVIOUS WEEK’S EVENTS (Week 25 – 29 Sep 2023)


German Economy

German business sentiment worsened in September, falling for the fifth month in a row and underlining recession fears in the Eurozone’s largest economy. The Ifo Institute’s business climate index was reported at 85.7, a decline from a revised August figure of 85.8 but above the 85.2 forecast. This shows a quite weak economy, economists say.

The German economy is risking a second recession in a year after shrinking in the last quarter of 2022 and the first quarter of 2023.


U.S. Economy

The reports last week showed a drop in U.S. consumer confidence to a four-month low in September. The second straight monthly decline in confidence reported by the Conference Board reflects higher interest rates and concerns about the political environment. 

Prices are still high despite the data suggesting a significant slowdown in inflation. High-interest rates and political debates are raising concerns and having an impact on how people spend.

The Federal Reserve last week left its benchmark overnight interest rate unchanged at the 5.25%-5.50% range. Though consumers continued to fret over the higher cost of living, their inflation expectations over the next year remained stable.

U.S. Durable Goods Orders reports show that orders rose in August due to an increase in machinery and other products with the rise in business spending on equipment. There is an apparent resilience in both business investment and the overall economy, despite the Federal Reserve’s aggressive monetary policy tightening. The resilience of business investment suggests that the Fed managed to avoid an upcoming recession.

Durable goods inventories rose 0.2%, while unfilled orders increased 0.4% confirming the resilience in the manufacturing sector. Core capital goods shipments rebounded 0.7% after falling 0.3% in July. Shipments of nondefense capital goods soared 1.2%, reversing the prior month’s decline.

The U.S. Economy is growing at a stable and good pace as reports suggest. The GDP growth for the second quarter and activity appears to have accelerated. The markets are however facing a sticky inflation but a strong labour market with the number of Americans filing new claims for unemployment benefits rising slightly. Expectations for future rate hikes are rising. 

The economy remains resilient, given how much the Fed has raised rates according to the opinion of many economists. The reports show that the U.S. Gross Domestic Product (GDP) increased at an unrevised 2.1% annualised rate last quarter, in line with economists’ expectations. Labour market resilience is apparent. Jobless claims have this month stayed low, at 204K.

Consumer spending increased by 0.4% and the Core  Personal Consumption Expenditures (PCE) Price index was reported lower than expected change. It is signalling that the underlying U.S. inflation moderated in August.

The PCE price index, excluding the volatile food and energy components, edged up 0.1% last month. That was the smallest rise since November 2020 and followed a 0.2% advance in July.

The University of Michigan showed that consumers’ 12-month inflation expectations fell to 3.2% for the month, the lowest since March 2021, from 3.5% in August. Consumers’ long-run inflation expectations slipped to 2.8% from 3.0% last month.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.4% last month after surging 0.9% in July. It is actually cooling.

US Congress avoided a government shutdown, which would place thousands of federal employees on furlough without pay and suspend various government services, as they came to a last-minute deal as per the reports today from various sources.


Canada Economy

According to the Gross Domestic Product (GDP) report for Canada, GDP remained unchanged in July as the manufacturing sector posted its biggest decline in more than two years, but it most likely ticked up 0.1% in August according to Statistics Canada.

The economy has been slowing down after 10 interest rate hikes since early last year.

The manufacturing sector shrank by 1.5% over June, the biggest month-on-month drop since April 2021, largely due to firms drawing down their inventories.





Australia’s inflation was reported higher for August, in line with expectations, putting pressure on the central bank to hike interest rates next month.

Australia’s monthly consumer price index (CPI) rose 5.2% in the year to August, up from 4.9% the previous month but the increase was mostly driven by a surge in fuel prices due to global supply factors. It is expected that the bank will hike one more time before the end of the year, likely in November, after the release of the third-quarter inflation report.












Currency Markets Impact – Past Releases (Week 25 – 29 Sep 2023)

Server Time / Timezone EEST (UTC+03:00)

  • The German ifo Business Climate index was reported 85.7, higher than expected but lower than the previous figure. No major shock was observed at that time. However, the EURUSD dropped due to higher volatility.
  • The CB Consumer Confidence report on the 26th for the U.S. was reported lower again. New Home Sales were also reported lower. The Expectations Index—based on consumers’ short-term outlook for income, business, and labour market conditions—declined to 73.7 (1985=100) in September, after falling to 83.3 in August. The DXY kept moving upwards after the release.
  • Australia’s monthly CPI indicator rose 5.2% in the twelve months to August, up from a rise of 4.9% in July, as expected. There was no shock observed on the AUD pairs and no increased volatility because of this release.
  • The U.S. durable goods orders figures were reported higher than expected on the 27th, rising +0.2% in August vs. -0.5% expected. The Core ones also saw a rise as well. There was no shock observed at that time but the USD experienced a rather steady appreciation for a long period of time after that.
  • Australia’s monthly Retail Sales change figure was reported lower than expected at 0.20% vs. the previous 0.50% on the 28th. No major shock was observed in the market at the time of the release.
  • The monthly German Preliminary CPI change was reported at 0.3% the same day, unchanged, while the Spanish Flash yearly CPI figure was reported higher and as expected at 3.50%. No major shock was recorded on EUR pairs at that time.
  • The quarterly GDP change for the U.S. was reported at 2.10%, the same as the previous figure. The Unemployment claims report showed a figure of 204K, an increase of 2K from the previous week’s revised level. No major shock was recorded affecting the USD pairs.
  • Tokyo’s annual Core CPI change was reported to be 2.5% lower than expected on the 29th. Japan’s unemployment rate was reported at 2.70% which shows that actually remains unchanged since the previous report. There was no shock recorded in the market but rather increased volatility for JPY pairs. 
  • The yearly changes in CPI Flash estimates were reported lower than expected. The EUR seemed to lose strength after the announcements while the USD depreciated. However, no major shock was observed but rather steady movements in one direction.
  • The monthly GDP change for Canada was reported 0%. Services-producing industries edged up 0.1% in the month, while goods-producing industries contracted 0.3%. After the release, the CAD started to depreciate steadily. Once more, the effect on the market was not an intraday shock. 
  • The Core PCE figure for the U.S. was reported lower than expected, at 0.1%, confirming the stable price changes, or even the slowdown in inflation. The impact on the USD pairs was minimal at that time. However, the USD started to appreciate at a steady pace after that release.
  • The Revised UoM Consumer Sentiment report suggested that U.S. near-term inflation expectations fell to the lowest level since early 2021 in September while sentiment eased. The sentiment index fell to 68.1 from 69.5 in August. It was reported that consumers expect prices will climb at an annual rate of 3.2% over the next year, down from 3.5% in August. The release had no significant effect on prices/USD pairs.
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    DXY (US Dollar Index)

    Overall, the DXY moved sideways overall during the previous week. However, the path was volatile. An upward trend was observed at the beginning that ended on the 27th when it found resistance at 106.85. After that the DXY moved downward crossing the 30-period MA on its way down and moving within a channel until the 29th when it eventually reversed.


    The pair experienced high volatility last week with reversals. It started to move to the downside significantly below the 30-period MA until it found support at near 1.04900. After that, a reversal occurred. The pair started to move upwards, crossing the MA on its way up until it found resistance at near 1.06160 before retracing to the mean. Overall we see this sideways but volatile path around the MA.



    The previous week Bitcoin Jumped near 800 USD finding resistance at 27300 before retracing to the 61.8 Fibo level (around 26850) on the 29th of September. After that, it experienced low volatility during the weekend staying in range. Today a sudden jump is observed at more than 900 USD after breaking the resistance at 27300.


    NEXT WEEK’S EVENTS (Week 02 – 06 Oct 2023)

    Services and Manufacturing PMI releases next week and the markets will probably experience volatility during the releases. 

    RBA and RBNZ will decide on rates.

    Important labour market-related data releases: U.S. JOLTS report, employment and unemployment rate announcements for both the U.S. and Canada.

    OPEC-JMMC Meetings are taking place and could shake the oil market.

    Currency Markets Impact:

  • During the PMI releases, shocks could occur affecting the FX pairs. EUR and GBP pairs during the European session and USD pairs during the N.American session.
  • The RBA will decide on rates on the 6th Oct and this report will potentially create a shock intraday for the AUD pairs. These usually experience a quick retracement soon after.
  • The U.S. JOLTS Job openings report will probably cause an intraday shock or increased volatility for the USD pairs. It is expected to be a higher figure due to the recent resilience the labour market is facing.
  • The RBNZ will decide on rates on the 4th Oct. This will probably cause the NZD pairs to experience a shock as well with retracement soon after due to the lack of volatility during the Asian session. 
  • Services PMIs are expected to increase volatility to higher than normal levels as well on the 4th Oct.
  • The ADP Non-Farm Employment Change could generate a small shock for the USD pairs at the time of the release. Usually, the market is waiting for the NFP to react greatly. 
  • On the 6th Oct., the CAD and USD pairs will probably experience high-level shocks with long potential movements to one direction due to the release of the most important reports of the month related to the labour market conditions.
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    U.S. Crude Oil 

    A strong resistance near 94 USD/b stopped Crude’s momentum and served as the end of the shock upwards. Soon a retracement followed with a drop reaching even below 91 USD/b on the 28th Sept. Crude’s price continued on the 29th Sept. to move with high volatility, breaking the support at near 90.5 USD/b and moving further to the downside. 89.70 USD/b serves now as an important support level.

    Gold (XAUUSD)

    Gold has been moving to the downside significantly. It keeps on breaking important support levels while it is moving on a clear downtrend. Even though the RSI is slowing down staying close to the 30 level, there is no significant data to suggest that there will be a reversal or even halt.



    NAS100 (NDX)

    Price Movement

    This week the index fell to its lowest at 14440 following a long period of a downward path. All benchmark indices were following the same path breaking more and more important support levels. Eventually, the path changed and it coincided with the signals given by the RSI, of an oversold territory. On the 27th, the market reversed and started to move to the upside aggressively breaking resistance levels such as the 14660 showing a strong momentum upwards. It is more clear that the path remains on an upward channel. The other U.S. indices are facing slightly different paths, more sideways as it seems instead of upwards.


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