Here’s what you need to know for Tuesday, October 1:
After a volatile start to the week in financial markets, investors are shifting focus to key macroeconomic data as the fourth quarter begins. On Tuesday, Eurostat will release the Harmonized Index of Consumer Prices (HICP), the European Central Bank’s (ECB) preferred inflation measure. In the US, the economic docket includes the ISM Manufacturing PMI for September and JOLTS Job Openings data for August. Additionally, several Federal Reserve (Fed) officials are scheduled to deliver speeches throughout the day.
On Monday, Fed Chairman Jerome Powell, speaking at the National Association for Business Economics Annual Meeting, stated that the Fed is not in a rush to cut interest rates and will continue to base its decisions on economic data. The US Dollar Index rose during the American session, closing the third quarter on a positive note. Early Tuesday, the USD Index remains steady below 101.00, while US stock index futures are trading slightly lower, indicating a cautious market sentiment.
Currency Market Updates
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EUR/USD: After testing the 1.1200 level on Monday, EUR/USD reversed course and ended in negative territory. Early Tuesday, the pair is trading in a narrow range below 1.1150. Markets expect Eurozone’s annual core HICP inflation to remain unchanged at 2.8% in September.
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GBP/USD: The pair started the week with gains but lost momentum by the close of Monday’s session. It continues to trade sideways below 1.3400 in the European morning.
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USD/JPY: Following gains on Monday, USD/JPY is building bullish momentum, trading around 144.50 during the European session, up more than 0.5% on the day. The Bank of Japan (BoJ) reiterated its accommodative policy stance in the Summary of Opinions from its September meeting but noted it would adjust policy if economic conditions improve.
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Gold: Gold extended its decline from Friday, losing nearly 1% on Monday. XAU/USD remains steady early Tuesday, holding above $2,640.
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AUD/USD: During the Asian session, Australian data revealed a 0.7% monthly rise in Retail Sales for August, beating the expected 0.4%. However, Building Permits fell by 6.1% in the same period. AUD/USD is trading slightly higher above 0.6900 as the European session begins.
