September Flashlight for the FOMC Blackout Period

We look for the FOMC to keep its target range for the federal funds rate unchanged at 5.25-5.50% at its meeting on September 20. Most market participants expect rates to remain on hold as well.

Yen Spikes after Ueda Comments, EC Downgrades Eurozone Growth Forecasts

The yen has jumped this morning on the back of comments from Bank of Japan Governor, Kazuo Ueda, who hinted that interest rates may not be negative for much longer.

Waiting Mode Ahead of US CPI and ECB Meeting

Markets remain in waiting mode ahead of the ECB meeting and US CPI data later this week. Today, the German ZEW index will provide early hints about how the largest European economy has developed in September, consensus is looking for weakening sentiment following a downbeat reading in the Sentix indicator last week.

Tesla Fuels Market Rally

Tesla jumped 10% yesterday and reversed morose mood due to the Apple-led selloff. Tesla shares flirted with the $275 per share on Monday, thanks to Morgan Stanley analysts who said that its Dojo supercomputer may add as much as $500bn to its market value, as it would mean a faster adoption of robotaxis and network services. As a result, MS raised its price target from $250 to $400 a share.

Another BoE Hike Likely as Wage Growth Continues to Rise

The UK labour market figures offer something for everyone on the face of it but under the circumstances, BoE hawks will likely be more emboldened by the figures than the doves.

Markets Rise As Spotlight Shines On US CPI

The August US Consumer Price Index (CPI) report will act as a critical piece of information that determines whether the Fed will keep rates higher for longer.

A Dovish Hike or a Hawkish Pause Coming from ECB?

All eyes are on Thursday's ECB rate meetingThe ECB holds its sixth rate-setting meeting for 2023 with the market mostly split on its outcome. The probability assigned for the tenth consecutive rate hike has varied greatly over the past 40 days and it is currently standing at 57% for a 25bps move. The battle between the hawks and doves has intensified recently as the upcoming “round table” discussion is expected to be extremely heated regarding the ECB’s next move.

Euro Dips on Soft Confidence Data

The euro started the week higher but has reversed directions on Tuesday and pared most of those gains. In the North American session, EUR/USD is trading at 1.0709, down 0.38%.

Australian Dollar Dips on Soft Consumer Confidence

Australian consumers are in a sour mood, as they feel the squeeze of high interest rates and stubborn inflation, which has led to heavily-debted households. The Westpac Consumer Sentiment Index fell by 1.5% in September to 79.7, following a decline of 0.4% in August. This missed the consensus estimate of 0.6%. Consumer sentiment remains at its lowest levels since 2020, during the Covid pandemic.

Happy CPI-Day, With Love, OPEC

Today, the US will release its latest inflation update, and it will be very important in terms of where the Federal Reserve (Fed) expectations will be headed, especially for the November meeting. The headline inflation is expected to have ticked higher from 3.2% to 3.6% in August, due to the spike in energy prices, but core inflation may have eased from 4.7% to 4.3%.