Risk-on sentiment remains in the market following last week’s cooler than expected US economic data, suggesting the Fed has likely completed the current rate hike cycle.
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- Markets are enjoying a resurgence in risk-on sentiment as consensus firms around the notion that the Fed is done hiking rates, with the CMA FedWatch tool suggesting a 93% chance of no rate hike at the next Fed meeting later this month of September. Sentiment is also bullish in China on property stimulus issues, leading to the HIS rising by more than 2% today. Most stock markets are higher since the Asian open today.
- Risk-on sentiment is producing a gain in the Australian Dollar, while the US Dollar has been the weakest currency today in the Forex market, putting the AUD/USD currency pair in focus today.
- There are rallies in several commodities, with the most notable being WTI Crude Oil and Brent Crude Oil which reached long-term high prices last Friday, which will be of interest to trend traders on the long side.
- The USD/JPY currency pair remains within a valid long-term upwards trend. Trend traders and yield traders will be interested in being long of this currency pair.
- It is a public holiday today in both the USA and Canada. Labor Day is a major holiday in the USA to market volumes there can be expected to be very thin today.
- There will be a release tomorrow of the Reserve Bank of Australia’s Cash Rate and Rate Statement – the Bank is expected to leave its Rate unchanged at 4.10%.
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