As the week kicks off, markets are expected to react to economic data and key developments over the weekend. Monday’s trading will be influenced by China’s economic reports, potential oil price fluctuations, and any geopolitical news that emerged over the weekend.
KEY INDICATORS
Oil market reactions
Crude oil prices will be in focus, especially after any updates from OPEC+ and ongoing concerns about supply cuts.
Higher prices could drive inflation concerns globally and put pressure on energy-dependent sectors.
Pre-Federal Reserve speculation
With the Federal Reserve’s meeting later in the week, Monday may see increased speculation on the potential for a rate hike or pause.
Traders and investors will adjust positions ahead of the Wednesday decision.
Currency markets
In currency markets, the US dollar could strengthen in anticipation of a hawkish stance from the Fed, while the Chinese yuan might face pressure if China’s economic data disappoints.
The euro and pound will also be watched closely ahead of upcoming ECB and BoE speeches later in the week.
Technical indications are showing a slight uptick on the European currency market against the US currency market. With major interest rate decisions to be released this week, traders are keeping a close eye on potential swings, which could shift the preference.
MARKET MOVERS
USD/JPY
Potential short preference Short positions below 139.681 with targets at 139.237 & 138.753 in extension. Alternative scenario Above 140.219 look for further upside with 140.540 & 140.936 as targets. USD/JPY seems vulnerable near YTD low, around mid-140.00s.
S&P500
Potential upside preference Long positions above 5641.14 with targets at 5650.82 & 5660.12 in extension. Alternative scenario Below 5623.32 look for further downside with 5607.44 & 5597.37 as targets. Investors must remain cautious since these levels may trigger profit taking.
Crude Oil (WTI)
Potential short preference Short positions below 68.57 with targets at 67.85 & 67.30 in extension. Alternative scenario Above 69.40 look for further upside with 69.67 & 70.23 as targets. As long as 69.60 is resistance, look for choppy price action with a bearish bias.
TODAY’S NEWS HEADLINES
Oil prices stabilise ahead of Fed interest rate decision
Oil prices stabilised on Monday as ongoing disruption to US Gulf oil infrastructure balanced persistent demand concerns after a fresh round of Chinese data while investors await news on US interest rates this week.
Brent crude futures for November were up 23 cents, or 0.32%, at USD 71.84 a barrel by 0934 GMT.
US crude futures for October were up 32 cents, or 0.47%, at USD 68.
European markets mixed ahead of bumper week for central banks
European stocks were mixed Monday as investors prepared for a bumper week of interest rate decisions from the U.S Federal Reserve and the Bank of England.
The pan-European Stoxx 600 was down 0.07% by 12:10 p.m. London time.
Back in Europe, inflation in Italy fell to 1.1% in August, fresh data from Istat showed.
The regional benchmark closed higher on Friday and added 1.09% for the week as positive momentum returned to the market.
Gold jumps to record high on Fed rate cut outlook
Gold prices charged to a record high on Monday as a weaker dollar and the prospects of aggressive US monetary policy easing boosted non-yielding bullion’s appeal.
Spot gold was up 0.4% at USD 2,586.04 an ounce by 0914 GMT after touching a record peak of USD 2,589.59.
US gold futures edged up by 0.1% to USD 2,613.40.
Spot silver gained 1% to USD 30.95 an ounce, hitting its highest in two months earlier in the session.
