Account
New to ADSS? Open an
account now to get started.
Already have an account?
Add funds to your ADSS account
Account
New to ADSS? Open an
account now to get started.
Add funds to your ADSS account
What’s happening: The US dollar declined on Friday, following the release of the latest inflation data from the country.
What happened: The latest inflation data from the US signalled price pressures are continuing to cool.
The Japanese yen gained against the US dollar after Shigeru Ishiba became Japan’s Prime Minister, following a snap election.
Why it matters: Data released on Friday showed that the US personal consumption expenditures price index rose by 0.1% in August, versus an increase of 0.2% in July. The figure also came in lower than market expectations of a 0.2% gain. On an annual basis, the PCE inflation rate eased to 2.2% in August, the lowest level since February 2021, compared to 2.5% in July.
US consumer spending, which represents over two-thirds of economic activity in the country, rose 0.2% in August, compared to a 0.5% rise in the previous month. The figure was below market views of a 0.3% gain in spending. Meanwhile, US personal income increased by 0.2% to $24.015 trillion in August, compared to a 0.3% rise in the previous month.
The US Federal Reserve slashed its benchmark interest rates by 50 basis points (bps) on September 18. Traders widely expect the central bank to cut rates by at least 25bps at its November meeting. Following the inflation data releases, speculations grew of a 50bps rate cut in November.
The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.1% at 100.42 on Friday, after falling to 100.15 during the session, hitting its weakest level since July 20, 2023. The dollar shed about 0.3% last week, recording losses for the fourth straight week.
The Japanese yen recorded gains after Japan’s Ishiba won the snap elections to become the country’s next Prime Minister. Ishiba has been supportive for the Bank of Japan’s interest rate hikes.
The USD/JPY forex pair tumbled around 1.8% at 142.14, recording its biggest daily percentage decline since August 2. For the week, the USD/JPY shed around 1.25%.
What to watch: Data on Chicago PMI and Dallas Fed Manufacturing Index will be released today. The Chicago PMI is expected to increase to 46.5 in September, from 46.1 in August, while the Federal Reserve Bank of Dallas’ general business activity index for manufacturing in Texas is projected to improve to -4.5 in September, from -9.7 in the previous month.
Context: London stocks settled higher on Friday and recorded gains for the week.
Details: Signs of inflation continuing to ease in the US supported global risk sentiment on Friday, as it raised the prospects of the Federal Reserve continuing to be aggressive in loosening its monetary policy.
Meanwhile, stimulus measures by the Chinese government also provided a boost to mining and luxury shares. China’s central bank cut interest rates last week, while also injecting liquidity into the country’s banking system.
The FTSE 100 index gained 0.43% to close at 8,320.76, while the domestically-focused FTSE 250 index climbed 1.1% to settle at 21,240.56 on Friday. Both the indices recorded gains on a weekly basis. However, London’s FTSE 100 lagged the STOXX Europe 600 Index, which added more than 2% last week.
Personal goods stocks were among the top performers, gaining around 5.4% on Friday to record their strongest week since February 2017.
Burberry shares added more than 17% over last week. Cranswick’s stock gained around 7% on Friday, after the company issued its annual profit forecast towards the upper end of its guidance range.
What to watch: Investors await the release of economic data on current account, GDP growth and business investment from the UK today. The current account gap in the UK, which narrowed slightly to £21 billion in the first quarter, is expected to widen to £32.2 billion in the second quarter.
Analysts expect the UK economy to expand by 0.9% year-over-year in the second quarter to record its strongest annual growth rate since the third quarter of 2022, up from 0.3% in the first quarter. Business investment in the UK is expected to decline by 0.1% in the second quarter, compared to a 0.5% gain in the first quarter.
Other Markets: US trading indices closed mixed on Friday, with the S&P 500 and Nasdaq 100 down by 0.13% and 0.53%, respectively, and the Dow Jones index up by 0.33%.
Russia’s military forces claimed that they had capturing the village of Marynivka in the eastern Donetsk region of Ukraine. The news sent the RUB/USD pair slightly higher in forex trading this morning.
China’s Caixin general services PMI fell to 50.3 in September, from 51.6 in August. The latest reading also came in short of market expectations of 51.5, exerting pressure on the CNY/USD forex pair.
Australia’s private sector credit rose by 0.5% in August, in-line with market estimates, which sent the AUD/USD pair higher in forex trading this morning.
New Zealand’s ANZ Business Outlook Index climbed to 60.9 in September, from 50.6 in the previous month. The latest reading being the highest since April 2014 lent support to the NZD/USD forex pair.
Japan’s industrial production contracted by 3.3% in August, compared to a 3.1% increase in the previous month. The latest decline was worse than market estimates of a 0.9% contraction, which sent the JPY/USD pair lower in forex trading this morning.
Germany’s import prices and inflation rate, Saudi Arabia’s unemployment rate, South Africa’s money supply M3, private sector credit, balance of trade, and government budget value, Spain’s current account, UK’s consumer credit, mortgage approvals, mortgage lending, money supply M4 and net lending to individuals, Italy’s inflation rate, India’s central government budget value, Brazil’s gross debt to GDP, government budget value and Central Bank of Brazil focus market readout, India’s infrastructure output, current account and total external debt, as well as Russia’s money supply M2.
ADSS
8th floor, CI Tower
Corniche Road
PO Box 93894
Abu Dhabi
United Arab Emirates
Trading Services
ts@adss.com
+971 2 657 2414
Investing in CFDs involves a high degree of risk that you will lose your money due to the use of leverage, particularly in fast moving markets, where a relatively small movement in the price can lead to a proportionately larger movement in the value of your investment. This can result in loses that exceed the funds in your account. You should consider whether you understand how CFDs work and you should seek independent advice if necessary.
ADS Securities LLC (“ADSS”) is authorised and regulated by the Securities and Commodities Authority (“SCA”) in the United Arab Emirates as a trading broker for Over the Counter (“OTC”) Derivatives contracts and foreign exchange spot markets. ADSS is a limited liability company incorporated under United Arab Emirates law. The company is registered with the Department of Economic Development of Abu Dhabi (No. 1190047) and has its principal place of business at 8th Floor, CI Tower, Corniche Road, P.O. Box 93894, Abu Dhabi, United Arab Emirates.
The information presented is not directed at residents of any particular country outside the United Arab Emirates and is not intended for distribution to, or use by, any person in any country where the distribution or use is contrary to local law or regulation.
ADSS is an execution only service provider and does not provide advice. ADSS may publish general market commentary from time to time. Where it does, the material published does not constitute advice, or a solicitation, or a recommendation to a transaction in any financial instrument. ADSS accepts no responsibility for any use of the content presented and any consequences of that use. No representation or warranty is given as to the completeness of this information. Anyone acting on the information provided does so at their own risk.
