IC Markets Europe Fundamental Forecast | 22 September 2021

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What happened across the Asia session?

The Bank of Japan kept bank rate at -0.1% and 10-year JGB yield target around 0%.

China Evergrande will make coupon payments for onshore bonds worth around USD36 million but did not mention fulfilling payments for offshore bonds valued at USD83.5 million also due tomorrow.

What does it mean for the Europe and US Sessions?

The safe-haven assets should sustain gains following the seeming partial fulfilment of bonds issue by China’s Evergrande.

The Dollar Index (DXY) Update

Key news events today

FOMC Economic Projections, 6am GMT

FOMC Statement, 6am GMT

FOMC Press Conference, 6.30am GMT

What can we expect from DXY today?

Expectations for the FOMC meeting lean towards a hint of an official announcement of tapering in the upcoming meetings, possibly during November or December, rather than an official announcement to taper asset purchases today.

Next 24 Hours Bias

Weak Bearish

Gold (XAU) Update

Key news events today

No major news events.

What can we expect from Gold today?

China’s Evergrande missed interest payments on Monday and is expected to do the same this coming Thursday. Concerns over about the potential risks to the Chinese financial system and global contagion in the event of a collapse by one of China’s largest property developer would continue to see demand for the precious metal.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

Following generally dovish comments by ECB policymakers, EUR/USD is likely to break the multi-month support zone around 1.1700 in the event of a hint of an official announcement of tapering US asset purchases by the US central bank before the end of the year.

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 upcoming Swiss National Bank’s Monetary Policy Assessment due for release on 23 September is likely to be a non-event as the central bank usually lags behind ECB in making monetary policy changes.

In its latest meeting, the ECB slightly reduced in assets purchases through the pandemic emergency purchase programme. The programme is expected to end only in March 2022.

Next 24 Hours Bias

Weak Bearish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

The key focus for the pound remains on whether inflation would prove transitory as claimed by the Bank of England. The country’s public inflation expectations for 2022 rose to 4.1% (prev. 3.1%), according to a poll by Citi/YouGov.

Next 24 Hours Bias

Weak Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

The re-election of Prime Minster Trudeau and the Liberal Party reaffirms the continuity of the current hawkish monetary policies from the Bank of Canada. The central bank is expected to rein in assets purchases further at the next meeting in October.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

Crude Oil Inventories, 2.30am GMT

What can we expect from Oil today?

Nigeria intends to seek a higher quota under the current OPEC+ agreement. The country is looking to produce 2.2 million barrels per day (bpd) within six months, up about 600,000 bpd from the current rate of production.

Next 24 Hours Bias

Weak Bearish