There was a strong risk appetite on the market as investors await US CPI data. The markets are in a wait-and-watch mode as inflation print is expected to peak, indicating a pivot in Fed monetary policy tightening. The federal budget balance is a key event on the US economic docket, which traders should watch out for. Oil markets hold a 3-day slump as slowdown concerns take centre stage. The German Inflation data surged increasing bets for a 75bps hike by the ECB at their next policy meeting.
NZDUSD advanced by +0.42% ahead of the US inflation print. The risk-sensitive New Zealand dollar surged higher as markets price in a Fed pivot as inflation reading is expected to drop in September. The US CPI YoY reading is expected to drop to 8.1% from a previous recording of 8.3%. Initial Jobless Claims are set to rise to 225K from 219K, a previous reading. The pair extended gains from the 0.5600 support and bulls may target the 0.5800 psychological level if near-term support continues to hold.
GBPCHF surged by +1.20% as volatility increased ahead of the BoE deadline. There is a fundamentally negative outlook on the pound as indicated by a drop in RICS House Price Balance to 32% from a previous reading of 51%. The BoE intervention has helped lift the pound in the near term. The CHF suffered losses as PPI YoY data missed expectations, dropping to 5.4% from 5.55%. The pair has near-term support at 1.0950 and upside gains are challenged by the 1.1250 level.
EURJPY soared by +0.20% post surge in German Inflation data. The German CPI data YoY for September rose to 10.0% from a previous reading of 7.9% while MoM data increased to 1.9% from 0.3%. The Japanese Yen remained on the back foot as traders are pricing in on the widening policy divergence between ECB and BoJ, as BoJ continues to maintain an ultra-loose policy stance. The pair extended a 3-day rally from the 141.00 support level and near-term targets are at the 144.00 high, a month high.
European equities rallied on Thursday, with eyes on US inflation data. CAC40 rallied by +0.78% after bouncing off the 5775 support and near-term targets are at 5900 resistance. A break above that level could see bulls targeting the 6050 level. DAX surged by +0.86% extending gains above 12100 and near-term barriers at the 12400 and 12600 levels. FTSE rose by +0.23% and critical levels to watch are between 6800 support and 6900 resistance.
US stock futures were higher as markets embrace a risk appetite tone ahead of US Jobs Data. S&P500 advanced by +0.41% steadily holding gains above the 3750 level and bulls could rally towards the 3650-resistance level. Nasdaq100 futures were up +0.23% from a 10750-support level and upside gains are capped by the 11000 psychological resistance. DJIA index futures edged higher by +0.41% and price action is bound within the 29200 support and 29600 resistance.
In commodities, oil gained as IEA warns OPEC+ production cuts could trigger another market rout. USWTI crude oil futures rose by +0.34% after bulls found near-term support at the 86.000 level and upside gains are capped by 94.00 resistance. Brent crude oil futures bounced off the 92.00 support by +0.50% and prices could seek the 98.00 high in the near term.
