DAILY MARKET REPORT - Thursday, Sep 23, 2021

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The US Federal Reserve left the interest rates unchanged on Wednesday and continued with its asset purchase program. The Fed sees the economy growing 5.9% in 2021, less than 7% in the June projection.

Federal Reserve Chairman Jerome Powell signalled the central bank may announce a pullback of its bond purchases in November and could start to raise interest rates in 2022. Powell also said that the Fed was pushing ahead with its research into implementing its digital currency.

EQUITIES

European shares ignore weaker-than-expected PMI data and the stocks were steady at the start of trading on Thursday. Meanwhile, US stock futures extend gains supported by the hawkish comments from Fed Chair Powell.

OIL

Crude oil prices extend higher boosted by stronger than expected decline in US crude inventories. On Wednesday, the EIA inventory data showed the US crude oil inventory stocks fell almost by 3.5 million barrels in the week ending September 17th.

CURRENCIES

In the currency market, the British pound struggling to find upside momentum ahead of the BOE meeting. The central bank is expected to keep its benchmark interest rate at a record low of 0.1% and its bond-buying program unchanged at a total of GBP 895 billion by the end of this year. The BOE is one of the first leading central banks that has committed to winding down its QE program by the end of 2021.

GOLD

The safe-haven metal reversed from the previous session highs weighed down by the strong US dollar. The metal is expected to remain under pressure as the FED revealed its plans to increase interest rates sooner than expected.

Economic Outlook

On the data front, Germany and Eurozone reported weak PMI numbers. Germany Manufacturing PMI fell to 58.5 in September from 62.6 in August. Eurozone Manufacturing PMI dropped to 58.7 in September from 61.4 in August.

Moving ahead today, the important events to watch:

UK – BOE interest rate decision and statement: GMT – 11.00

US – Jobless claims: GMT – 12.30

US –Manufacturing PMI: GMT – 13.45

Coronavirus update:

Worldwide, more than 226 million people have been confirmed infected and more than 4.7 million have died. The United States has confirmed over 41 million cases and has had more than 660,000 deaths from COVID-19, the highest totals in the world.

Technical Outlook

EURUSD:
The currency pair slightly recovered from the previous session losses. If prices settle above 1.1650, we may witness short term recovery to above 1.1750/80. If it breaks and close below 1.1650 then will see a further bearish move to 1.1630/10.

eurusd


The important levels to watch for today: Support- 1.1700 and 1.1660 Resistance- 1.1750 and 1.1770.



GOLD: Technically the overall trend still looks bearish after the previous session selling pressure and the short-term support still around $1760. If the metal breaks below $1760 the next important support at $1754/45.

gold neww


The important levels to watch for today: Support- 1760 and 1754 Resistance- 1772 and 1780.

Quote of the day- To be a better investor, you have to stand on your own. You just can’t copy other people’s insights – Li LU.

Read more- https://gulfbrokers.com/en/daily-market-report-379
 
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