Financial Market Alerts

With inflation data for Europe and the US in today's European session, we take a look at EUR/USD to identify key levels and a directional bias.

Why the US dollar could benefit from fewer rate cuts than expected following a relatively quiet 2023...

Once again, the 1-day implied volatility levels for EUR/USD and USD/JPY have blown out ahead of a busy calendar. Central bank members from the Fed, ECB, BOE and SNB will hit the wires, European GDP is also on tap ahead of the key US inflation report.

With the decline in the inflation rate seemingly stalling, a higher-than-expected inflation reading is likely to be more impactful to markets.

Hawkish comments from Jerome Powell with the threat of further hikes snapped Wall Street’s 8-day wining streak, and hints at a swing high on the S&P 500 heading into the weekend. And that puts traders on high alert for next week’s inflation report, not to mention the threat of a government shutdown if the debt ceiling is not raised by Friday.

USD/JPY is showing signs of rolling over, but remains in a longer-term uptrend ahead of the BOJ and Fed

New Zealand inflationary pressures moderated-more-than expected in the September quarter, taking the wind out of the NZD/USD’s sails following the expected election victory from the National Party-led coalition over the weekend.

Bondcano, the phrase coined to described the sharp acceleration of bond yields to the detriment of equities, appears to be smouldering as yields have pulled back from their highs. It has certainly provided some relief for sentiment, given the well-based concerns that something was about to break in the financial system. But with the Fed members now striking a relatively dovish tone, it raises the question as to whether bond investors will now step back into the market to capitalise on attractive yields and take the sting out of bondcano’s tail.

EUR/USD is on track for a record 12th consecutive losing streak. But given its hesitancy to test 1.04 and the potential for a false break of the January low, perhaps we’re finally nearing an inflection point for the battered EUR/USD.

The ASX 200 has continued to show resilience around the key 7,000 support level, despite the surge on bond yields, negative sentiment and rising inflation. What if sentiment improves?

The US dollar rises as the Fed still expects another rate hike and only two rate cuts next year