Daily Summary: dollar starts the week with declines

6:02 PM 18 September 2023
  • Wall Street ended the day with moderate gains as lower volatility prevails, with investors awaiting the crucial Fed decision and Jerome Powell's conference on Wednesday.

  • The US500 gained 0.30%, trading around 4510 points, while the US100 posted a slightly higher gain of 0.40%, trading near 15450 points.

  • European stock indices closed lower on Monday, with the German DAX down by 1.17%, the French CAC40 depreciating by 1.56%, and London's FTSE100 slipping by 0.76%.

  • The Euro emerged as one of the stronger currencies today following reports that the European Central Bank (ECB) is reportedly preparing to implement a liquidity management strategy in banks. This potential strategy might include raising banks' mandatory reserves from the existing 1% of customer deposits to a range of 3-4%.

  • The Norwegian Krone (NOK) appears weaker today due to speculation that the Norges Bank may conclude its rate hike cycle at Thursday's meeting, despite previous expectations of a 25 basis point increase.

  • Macro update from Canada:

    • Housing starts were at 252,000 (expected: 234,300; previous: 255,200)
    • PPI inflation stood at -0.5% Y/Y (previously: 2.7%Y/Y)
    • The trend in producer prices in Canada resembles that in the USA, although it is unlikely to prompt the Bank of Canada (BoC) to raise rates, especially considering Canada's highly inflated real estate market.
  • In Poland, core CPI inflation aligns with expectations, dropping to 10% from 10.6%. This indicates lower core inflation compared to the general CPI, although September's CPI from the base index should see a significant decline.

  • In the cryptocurrency market, there are some modest gains, likely driven by a rebound from recent declines as there is no clear news from the crypto specific point of view. Bitcoin is up by 1.60%, with peak gains reaching 3.0%.

Gold benefits from the weakening dollar, continuing its upward movement after bouncing from support around $1900. A sustained break above $1931 could potentially lead to further gains towards $1948. Source: xStation.

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