IC Markets Europe Fundamental Forecast | 14 September 2021

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What happened across the Asia session?

RBA Governor Lowe reiterates that the recovery of the Australian economy is delayed, not derailed, by the Delta variant spread in the country. The Official Cash Rate is also unlikely to be raised before 2024.

What does it mean for the Europe and US Sessions?

The Aussie would continue to be under pressure from RBA Governor Lowe’s comments, notably with Q3 GDP projected to shrink by at least 2%, with risk of a ‘significantly larger’ contraction.

The Dollar Index (DXY)

Key news events today

CPI m/m, 12.30am GMT

Core CPI m/m, 12.30 GMT

What can we expect from DXY today?

Core CPI is expected to remain unchanged at 0.3%. A higher-than-expected figure, however, would pressure the US central bank further to succumb towards policy normalisation.

Next 24 Hours Bias

Weak Bullish

Gold (XAU) Update

Key news events today

No major news events.

What can we expect from Gold today?

The US CPI numbers due for release today would be closely watched by gold traders as a continuation in the spike in inflation, notably with year-on-year US CPI remaining at a 13-year high of 5.4%, would hurt the yellow metal.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

ECB’s Schnabel expects inflation to drop in 2022 and said the central bank would act swiftly in the event that their target of 2% is reached earlier than expected.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

The USD/CHF hovers just below the tested multi-month resistance around the 0.9230 region ahead of the release of the US CPI inflation numbers. A higher-than-expected reading would raise expectations of the Fed planning for a taper of asset purchases by the end of this year, culminating for another attempt to make a sustained break above 0.9230.

Next 24 Hours Bias

Weak Bearish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Bank of England’s Hauser stated that the central bank’s balance sheet would be structurally larger even after current quantitative easing programmes unwind. The executive director suggested that the bank’s involvement in stabilising future market turmoil would be less active.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

The Lonnie is likely to continue to draw strength from firm oil prices and a lacklustre US dollar ahead of the US CPI data. Canada is the world’s fourth-largest exporter of oil.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

China reports a fresh high in new COVID-19 infections. The spread of the virus is concentrated in the province of Fujian, however. The impact on the demand from the world’s largest importer of oil would only be material in the event of a further spread outside the province.

OPEC revised its global oil demand forecast for 2022 upwards by 900,000 barrels a day from its August projection. Global demand growth was maintained at 6 million barrels a day.

Next 24 Hours Bias

Weak Bullish