Today's Top Financial News

Market Overview

Recent releases from Europe, Britain, and the U.S. for the Flash Manufacturing and Services PMI show varying results across major markets:

1. Europe:

• French Manufacturing remains in contraction but improved slightly to 44 from last month, while French Services contracted to 48.3.

• German Flash Manufacturing continues its slowdown, dropping to 40.3 from 42.4. This marks a continued decline since September 2022. German Flash Services also showed slower growth, coming in at 50.6.

• Despite these trends, the European Central Bank (ECB) cut rates by 25 basis points (bps) on September 12, stating that it was appropriate to "moderate the degree of monetary policy restriction" based on updated inflation and transmission dynamics. Analysts suggest that the slower pace of rate cuts by the ECB compared to the Federal Reserve could lead to upward pressure on EUR/USD.

According to Sylvain Broyer, Chief EMEA Economist at S&P Global Ratings, the ECB's 25bps rate cut came without additional policy guidance. Broyer noted, “The upcoming 35bps reduction in the repo rate is unlikely to have a significant impact.” The markets attention will now focus on how much these cuts influence future money market rates.

2. United Kingdom:

• The Bank of England (BOE) maintained its rates despite the Feds cuts, citing a "gradual approach" to monetary easing due to persistently high services inflation. The U.K. economy is expected to see around 0.3% quarterly growth in the second half of the year. This points to potential gains for GBP, especially against the weaker USD.

3. United States:

• Flash Manufacturing PMI contracted to 47 from last month‘s 47.9, while Flash Services showed robust growth at 55.4. The CME FedWatch tool suggests a 76% likelihood of further easing this year, with markets divided between expectations of a 50bps or 25bps rate cut in November. Senior Markets Strategist Elias Haddad from Brown Brothers Harriman believes that the market may be overestimating the Fed’s willingness to ease, suggesting that stronger U.S. jobs data could alter rate cut expectations.

• Until the next Non-Farm Payroll (NFP) report on October 4, the USD is expected to weaken against growth currencies like gold and silver.

Market Analysis

GOLD - GOLD has consolidated within recent price zones and remains near all-time highs. Prospects for further gains remain as traders price in expectations for a break above the previous peak, pending a clear move above structure.

SILVER -SILVER has held steady at 30.668, and buying momentum is expected to push the price toward 31.472 following the failure to break lower. This market is viewed as bullish.

DXY -The dollar has recovered, breaking up to 100.900. While further price action is awaited, a dovish Fed outlook combined with a strong U.S. economy could support the dollar, with potential selling pressure before the October 4 NFP release.

GBPUSD - The pound has risen to new highs at 1.33600. While price consolidation suggests a small pullback, overall sentiment remains bullish. However, COT reports suggest a possible shift, so further developments should be watched closely.

AUDUSD -The Aussie dollar is steadily rising, having broken above the S&D zone at 0.68370. With price support at 0.67985, further gains toward 0.68715 are expected.

NZDUSD -The Kiwi shows strong momentum and a potential to push toward 0.62898. A clear break above current structures will indicate further buying opportunities.

EURUSD - The euro is testing support at 1.11000 after failing to break above 1.11386. While ECB rate cuts have introduced some weakness, a failure to break lower could see the euro regain momentum in the coming days.

USDJPY - Yen remains weak, trading between 143.442 and 144.451. Continued buying is expected as the BOJ maintains a loose monetary stance, with further Yen weakness likely in the months ahead.

USDCHF -The Swiss franc has been trading between 0.84086 and 0.85541. While it remains a safer alternative, technical indicators suggest a potential sell-off after breaking below S&D structures. Further price action will confirm this.

USDCAD - The Canadian dollar has fallen to 1.34803, and further declines are expected, with potential consolidation between 1.34803 and 1.35762.