IC Markets Asia Fundamental Forecast | 15 September 2021

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What happened in the US session?

Inflation in the US on a year-on-year basis cooled in August, with headline CPI at 5.3% (prev. 5.4%) and core CPI slipping to 4.0% (prev. 4.3%). The US dollar pared losses following an initial spike to the downside upon the release of the CPI figures.

What does it mean for the Asia Session?

A sideways range for the majors can be expected as the lower US CPI figures released yesterday should lose relevance in the session as inflation was stated as transitory by the US central bank previously.

The US Fed speakers have focused more on seeing an improvement in the labour market reports to determine an appropriate timeline for a taper in asset purchases.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

On the geo-political front, US President Biden proposed a face-face meeting with China’s President Xi in their call last week but the latter did not respond to the request.

The Delta variant would have an adverse impact on the US labour market in the short-term but the prospects for an improvement remains valid in the longer-term, according to Whitehouse advisor Desee.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

The precious metal sustained gains from the bullish reaction to the lower US CPI numbers, closing above $1,800 for the first time in a week. A dovish surprise at the US Federal Open Market Committee meeting from 21-22 September would provide further bullish impetus.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

RBA Governor Lowe reiterated that the Official Cash Rate is unlikely to be raised before 2024. Q3 GDP is also projected to shrink by at least 2%, with risk of a ‘significantly larger’ contraction should the Delta variant spread lingers.

Next 24 Hours Bias

Weak bearish

The Kiwi Dollar (NZD)

Key news events today

GDP q/q, 10.45pm GMT

What can we expect from NZD today?

The country’s quarter-on-quarter GDP is expected to drop to 1.1% while Q2 growth is expected to accelerate to 16.3% on a year-over-year basis, according to a Bloomberg survey. A positive GDP data set would reinforce RBNZ’s eagerness to raise rates discussed in its August meeting, where increases of up to 50bps were discussed.

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Lower US Treasury yields and broader risk aversion saw USD/JPY settle near the lower band of an established price range of 109.60 – 110.40. A data-light day ahead is likely to keep the safe haven currencies within the tested price range.

Next 24 Hours Bias

Weak Bullish