Account

New to ADSS? Open an
account now to get started.

OR

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

Trends & Analysis
News

Gold continues to shine amid geopolitical worries

News

Crude oil dips for 3rd session after supply data

News

Is there an AI upside for AMD?

News

GBP/USD recovers following wage report

News

Buy the JPMorgan dip?

News

Goldman Sachs shares surge after earnings beat

Trends & Analysis
News

Gold continues to shine amid geopolitical worries

News

Crude oil dips for 3rd session after supply data

News

Is there an AI upside for AMD?

News

GBP/USD recovers following wage report

News

Buy the JPMorgan dip?

News

Goldman Sachs shares surge after earnings beat

News

US dollar hits 6-month high on economic data

 

Thursday, September 07, 2023

Today’s headlines

What’s happening: The US dollar moved higher on Wednesday, hitting a six-month high.

What happened: Data released on Wednesday showed the US services sector surprisingly accelerating last month.

The euro and British pound fell to three-month lows against the US dollar after the data, but pared some gains during the afternoon session.

Why it matters: Data showed the ISM services PMI unexpectedly climbed to 54.5 in August, the strongest growth in the country’s services activity in six months, amid an increase in new orders. The latest reading came in higher than July’s figure of 52.7 and also beat market expectations of 52.5.

Although the recent data signalled that interest rates will remain higher for longer, it does not change the prospects of the US Federal Reserve keeping rates unchanged at its upcoming meeting this month. Speculations of the Fed hiking rates in November and December increased on Wednesday.

On the other hand, PMIs for China and Europe disappointed investors. China’s services sector growth eased to an eight-month low in August.

The US Fed also released its Beige Book report on Wednesday, which showed a moderation in the country’s economic growth in recent weeks, while inflation eased in most parts of the country.

The US trade deficit widened less than expected to $65 billion in July, compared to a gap of $63.7 billion in June. Markets were expecting a higher deficit of $68 billion.

The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained around 0.1% to 104.86 on Wednesday, after surging to a new six-month high of 105.03 earlier in the session.

The EUR/USD forex pair closed almost flat at 1.0726, while the GBP/USD fell around 0.5% to 1.2507, after both pairs fell to three-month lows earlier in the session.

What to watch: Traders await the release of economic data on initial jobless claims, nonfarm labour productivity and unit labour costs from the US today.

The number of persons filing for jobless benefits, which fell by 4,000 to 228,000 in the week ending August 26, is expected to increase to 239,000 in the latest week. Analysts expect nonfarm business sector labour productivity to rise 3.7% in the second quarter, after a 1.2% decline in the prior quarter. Unit labour costs in the nonfarm business sector are projected to increase by an annualised 1.6% in the second quarter, following 3.3% growth in the prior quarter.

The markets today

European stocks will be in focus today ahead of some major economic reports

Context: Equity markets in Europe settled lower on Wednesday, as investors assessed the latest economic data.

Details: European stock markets fell on Wednesday, extending losses for the sixth session in a row, amid declines in banks and household goods on weak economic reports.

The latest data showed Germany’s factory orders falling more than projected in July, while the Eurozone’s retail sales contracted more than expected.

Retail sales in the Eurozone fell by 0.2% in July, versus 0.2% growth in June. The figure was higher than market estimates of a 0.1% decline. Eurozone’s construction PMI also slipped to 43.4 in August, from 43.5 in July.

Investors remained cautious about inflation concerns, with crude oil prices spiking after Saudi Arabia announced plans to extend its output cut of 1 million barrels per day till yearend.

The STOXX Europe 600 Index fell 0.57% to settle at 454.30 on Wednesday, with most sectors closing in the negative zone. Germany’s DAX 40 lost 0.19%, while France’s CAC 40 declined by 0.84%.

The S&P Global/CIPS UK construction PMI fell to a reading of 50.8 in August, from 51.7 a month ago. London’s FTSE 100 declined 0.16% to close at 7,426.14 on Wednesday.

What to watch: Traders await economic reports on Eurozone’s GDP growth rate and employment change today. The Eurozone economy is expected to expand by 0.6% year-over-year in the second quarter, following 1.1% growth in the prior period. Analysts expect the number of employed persons in the Eurozone to increase by 0.2%, compared to 0.5% growth in the earlier quarter.

Other Markets: US trading indices closed lower on Wednesday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 0.57%, 0.70% and 0.88%, respectively.

The news shaping the markets

US Secretary of State Antony Blinken made a surprise visit to Kyiv to meet with major Ukrainian officials. The news sent the safe-haven US dollar index slightly higher this morning.


Australia’s trade surplus narrowed to A$8.04 billion in July, versus A$10.27 billion in the previous month. The figure was also below market estimates of A$10 billion and exerted pressure on the AUD/USD forex pair.


The Philippines said its manufacturing production rose 5.7% year-over-year in July, following 4.2% growth in June, which sent the PHP/USD pair higher in forex trading this morning.


The American Petroleum Institute said US crude stockpiles declined by 5.521 million barrels in the week ended September 1, following a contraction of 11.486 million barrels in the prior week, which exerted pressure on the WTI crude oil prices.


The Bank of Canada maintained the target for its overnight rate at 5% at its latest meeting, sending the CAD/USD pair lower in forex trading this morning.

What else to watch today

France’s payroll employment, foreign exchange reserves, current account and balance of trade, Germany’s industrial production, Saudi Arabia’s GDP growth rate, South Africa’s foreign exchange reserves and current account, UK’s Halifax house price index, Italy’s retail sales, Singapore’s foreign exchange reserves, Turkey’s gross foreign exchange reserves and treasury cash balance, Mexico’s inflation rate, car output and auto exports, Canada’s value of building permits and Ivey Purchasing Managers Index, US Natural gas stocks change, crude oil inventories, gasoline inventories and distillate stocks, China’s foreign exchange reserves, Spain’s consumer confidence indicator, as well as Argentina’s industrial production.


Site by Pink Green
© ADSS 2024


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.