Risk appetite stirred by equity gains
Chinese equities caught a bid today in today’s Asian session after the negative day yesterday, though there was no specific news that prompted the shift in sentiment. The gains were not quite enough to fully recoup yesterday’s losses, but gains of almost 1.7% on the day were enough to promote better risk sentiment across markets. The US30 index pared early losses to sit 0.1% in the black, while the NAS100 index rose 0.44%.
The better sentiment filtered through to currency markets as well, with the Aussie climbing 0.23% and the yen retreating 0.12% versus the US dollar. In the broader market, the dollar was pegged lower versus a basket of six major currencies.
Gold’s rally testing Fibonacci resistance
Gold’s solid gains halted at the 1,239.88 level yesterday, the highest level in more than three months, before closing lower. Yesterday’s peak was close to the 38.2% Fibonacci retracement level of the April 11 to August 16 drop at 1,238.60. The slightly weaker US dollar today is lifting gold higher again and the metal could mount a retest of the resistance point. Gold is currently holding at 1,232.12, just below the 200-week moving average at 1,234.79.
Gold Daily Chart
Markit PMIs and Fed speakers on tap
The main events on today’s data calendar are the releases of flash Markit PMI readings for Germany, the Euro-zone and the US. Survey estimates show a similar picture across all releases, with a slightly lower reading expected than last month. Germany’s is expected to slip to 53.4 from 53.7, Euro-zone to 53.0 from 53.2 and the US one from 55.6 to 55.5.
We also have three Fed speakers on tap: Bullard, Bostic and Mester. The Bank of Canada announces its interest rate decision with the majority of economists expecting a 25bps hike to 1.75%.
The full MarketPulse data calendar is available at: https://www.marketpulse.com/economic-events/
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