EURUSD
- EUR/USD Gains: The EUR/USD pair rose as the US Dollar weakened following a dovish speech by Federal Reserve Chairman Jerome Powell at the Jackson Hole Symposium on Friday.
- Powell’s Signals: Fed Chair Powell stated that "The time has come for policy to adjust." While he did not specify the timing or size of potential rate cuts, markets now expect a 25-basis point reduction at the Fed's September meeting.
- Support from Fed Officials: Philadelphia Fed President Patrick Harker echoed the need for a gradual lowering of interest rates. Chicago Fed President Austan Goolsbee added that current monetary policy is highly restrictive, with the Fed's focus now shifting towards achieving its employment goals.
- ECB Rate Cut: On the European side, ECB Governing Council member Olli Rehn highlighted that the slowdown in inflation, coupled with economic weakness in the Eurozone, supports the case for lowering borrowing costs next month.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The EUR/USD pair is likely to maintain its upward momentum as expectations for rate cuts from both the Fed and ECB grow. However, the extent of these gains may be tempered by the timing and magnitude of the anticipated policy adjustments from both central banks.
GBPUSD
- Fed Easing Signals: The GBP/USD pair finds support as the US Dollar weakens following signals that the Federal Reserve (Fed) will begin easing monetary policy in September.
- Powell's Jackson Hole Speech: At the Jackson Hole Symposium on Friday, Fed Chair Jerome Powell indicated that the Federal Open Market Committee (FOMC) is likely to cut the target range for the Federal Funds Rate at their next meeting on September 17-18, as inflation trends back toward the 2% target.
- Expectations for Rate Cuts: Rabobank analysts predict a worsening labour market, leading to four consecutive rate cuts of 25 basis points each at the September, November, December, and January meetings.
- BoE's Inflation Concerns: Bank of England (BoE) Governor Andrew Bailey emphasized that inflation remains a significant concern, although pricing pressures have eased more rapidly than anticipated.
- Upcoming US Data: Market participants are now focused on the US Durable Goods Orders for July, set to be released later Monday.
| SMA (20) | Rising |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The GBP/USD pair is poised for further gains as expectations of Fed rate cuts continue to weigh on the US Dollar. However, the pair's direction may also be influenced by upcoming US economic data and ongoing concerns about UK inflation.
GOLD
- Gold’s Consolidation: Gold price holds steady above $2,500 at the start of the week on Monday, consolidating gains from the previous week.
- Support: The continued weakness of the US Dollar, along with negative US Treasury bond yields, contributes to the buoyant tone around gold.
- Powell’s Remarks at Jackson Hole: Federal Reserve (Fed) Chairman Jerome Powell’s dovish comments at the Jackson Hole Symposium on Friday confirmed that the Fed will likely begin its easing cycle in September, providing further support for gold prices.
- Market Pricing of Fed Rate Cuts: Following Powell's remarks, the market is pricing in a 62% chance of a 25-basis point rate cut in September and a 38% probability of a 50-basis point reduction, according to the CME Group's FedWatch Tool on Monday.
- Geopolitical Tensions: Gold also benefits from its safe-haven status amid escalating geopolitical tensions in the Middle East, following Israel's preemptive airstrike on Hezbollah in southern Lebanon on Sunday.
Closing statement: The XAU/USD pair appears set for further upside as persistent US Dollar weakness, dovish Fed expectations, and heightened geopolitical risks continue to drive demand for gold.
CRUDE OIL
- WTI Extends Rally: West Texas Intermediate (WTI) crude oil prices continue their upward momentum, trading around $75.40 in Monday’s European session, up 0.45% on the day.
- Support from Fed Rate Cut Expectations: The rally is underpinned by solid expectations that the Federal Reserve (Fed) will cut interest rates in its September meeting, which could bolster economic activity and, in turn, support oil demand.
- Middle East Tensions: Fears of a broader conflict in the Middle East disrupting regional oil supplies have also provided support to WTI prices in recent sessions.
- China's Economic Concerns: Concerns about a sluggish economy and slowing oil demand in China, the world’s largest oil importer, could weigh on prices. Global demand growth is expected to decline from 1.2 million barrels per day to 1.1 million barrels.
- Morgan Stanley’s Forecast: On Friday, Morgan Stanley adjusted its forecast for Brent Crude, reducing its target to $80 per barrel, down from the previously expected $85.
| SMA (20) | Falling |
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| RSI (14) | Slightly Rising |
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| MACD (12, 26, 9) | Slightly Falling |
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Closing statement: WTI crude oil prices may face a tug-of-war between bullish factors like Fed rate cut expectations and geopolitical risks, and bearish pressures from slowing demand growth, particularly from China.
DAX
- Market Movers: Siemens Energy led gains, rallying 2.71%, while Heidelberg Materials and Vonovia in the materials and real estate sectors saw gains of 1.84% and 1.83%, respectively.
- ECB Rate Cut Expectations: Reports on Friday highlighted growing support among ECB policymakers for a September rate cut, driving demand for DAX-listed stocks. Latvian central banker Martinas Kazaks indicated that the ECB's projections still suggest two more rate cuts this year, reinforcing expectations for easing.
- Ifo Business Climate Index: Investors are keenly watching the Ifo Business Climate Index, set to be released on Monday. Economists expect a slight decline from 87.0 in July to 86.5 in August, potentially reflecting ongoing economic challenges in Germany.
- Fed's Dovish Signal: On Friday, Fed Chair Jerome Powell’s comments at the Jackson Hole Symposium signaled a potential rate cut, boosting demand for stocks in the DAX. Powell's concerns about labor market weakness add to the dovish outlook.
- US Data in Focus: On Monday, investors will also look to the US durable goods orders report for further insight into the demand environment, which could influence market sentiment.
| SMA (20) | Slightly Falling |
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| RSI (14) | Rising |
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| MACD (12, 26, 9) | Rising |
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Closing statement: The DAX may continue to see upward momentum fuelled by expectations of rate cuts from both the ECB and the Fed, though the economic data releases this week, including Germany's Ifo Index and US durable goods orders, could create volatility.