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According to the Wall Street Journal: Ford Motor (FN) further cuts 1,000 jobs in Germany due to continued weak demand for electric vehicles.The European Parliaments head of metals will visit Kyiv, MEPs said.September 17th news: On September 17th local time, Krasnodar Airport in southern Russia received the first flight since its suspension of operations. This is also the first time the airport has resumed formal operations since its closure since the outbreak of the Russia-Ukraine conflict in February 2022.The number of rate cuts this year is expected to increase. 1. JPMorgan Chase: The updated dot plot indicates room for three rate cuts this year, one more than the June dot plot. 2. Deutsche Bank: The updated dot plot median may indicate a total of 75 basis points of rate cuts in 2025, 25 basis points more than the June forecast. 3. Barclays: The dot plot indicates three rate cuts this year, one each in 2026 and 2027, while the median long-term rate forecast remains unchanged at 3.0%. 4. Bank of Montreal: The median rate forecast for the end of 2025 is expected to be lowered to reflect the possibility of 25 basis point cuts at both the October and December meetings. The dot plot remains unchanged from June. 1. Pepperstone: The Federal Reserve is likely to disappoint market expectations. The dot plot median is likely to remain unchanged, still indicating only a cumulative rate cut of 50 basis points this year. 2. UBS: The dot plot will show two rate cuts this year, while the market expects closer to three. Participants economic outlook forecasts will also be in focus. 3. Bank of America: With macroeconomic forecasts largely unchanged, the median Fed rate forecast for 2025 will continue to indicate a 50 basis point cut, despite a downward shift in the overall dot plot. 4. Goldman Sachs: We expect the updated dot plot to show two rate cuts this year, to 3.875%. While the Fed may currently be planning three consecutive rate cuts this year, it may decide that forcing this into the dot plot is unnecessary. 5. Morgan Stanley: We expect the median dot plot to still show two rate cuts this year, but actual economic data may push the Fed to continue cutting rates throughout the rest of the year, extending this round of cuts into January. Other Views: 1. Citigroup: The updated dot plot is likely to indicate two to three rate cuts this year, and the median rate forecast for 2026 may also be revised downward.The UKs core CPI monthly rate in August was 0.3%, in line with expectations and the previous value of 0.2%.

AUD/USD demonstrates pre-Fed anxiety near 0.64 ahead of the US ADP Employment Change

Daniel Rogers

Nov 02, 2022 17:54

 截屏2022-11-02 上午10.53.53.png

 

Ahead of Wednesday's key Federal Open Market Committee (FOMC) meeting, traders become cautious, causing AUD/USD to bounce around 0.6400. Traders of the Australian dollar-United States dollar pair are challenged by both pre-Fed anxiety and China- and U.S.-related concerns during a poor Asian session.

 

However, recent strong US data reinforced expectations for hawkish Fed action and defied the market's initial anticipation that officials will signal fewer rate hikes beginning in December. However, increased recession fears and rising price pressure look to present a challenge for both Fed hawks and AUD/USD bears.

 

Despite this, the US JOLTS Job Openings increased to 10,717M in September, compared to the forecast of 10.0M and the upwardly revised readings of 10.28M. In addition, the US ISM Manufacturing PMI rose to 50.2 in October, compared to market forecasts of 50 and a previous reading of 50.9. Final readings of the US S&P Global Manufacturing PMI for October exceeded 49.9 preliminary predictions to reach 50.4, but stayed below the 52.0 readings from the prior month.

 

In contrast, the Reserve Bank of Australia's (RBA) preparedness to offer additional rate hikes, after announcing the second increase of 25 basis points (bps) to the benchmark rate the previous day, benefits AUD/USD buyers. During his scheduled speech on Tuesday, Reserve Bank of Australia (RBA) Governor Philip Lowe noted, "Rates have been significantly increased in a very short period of time." According to the official, the board has determined that a more gradual rate rise is necessary.

 

Aside from this, prospects of reducing covid restrictions in China and the recently higher China Caixin Manufacturing PMI for October may have helped AUD/USD buyers in the past, despite being the third consecutive reading below 50.

 

Yields remain unchanged at 4.05% following a solid start to November, while S&P 500 Futures register moderate gains despite Wall Street's poor close.

 

Consequently, AUD/USD pair traders should keep an eye on risk triggers and Australia's September Building Permits for fresh market impetus. Also essential will be the US ADP Employment Change for the month of October, as it gives an early indicator for Friday's US Nonfarm Payrolls report. However, significant emphasis should be placed on the Fed's ability to transmit a brake on the rapid rate hikes.

 

Combined with the AUD/USD pair's resistance to dip below the 10-DMA support near.6390, Tuesday's daily candle gives buyers hope. A downward-sloping resistance line from the beginning of August, which was near 0.6480 at the time of writing, challenges the upward momentum of the quote.


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