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Market remains wait-and-see, US Stocks got pushed


US stocks staged a goodish rebound on Monday, regaining upside strength and pushed higher in the final hour of the US trading session as financial markets will likely remain in wait-and-see ahead of central banks’ decisions. Traders are geared for another super-sized US rate increase amid multiple central banks’ announcements scheduled for later in the week, as the Fed is expected to hike the rate by 75 basis points regardless of the potential effects on economic growth. On top of that, US President Biden’s readiness to back Taiwan in case China attacks Taipei and upbeat covid updates from China both favoured the market mood yesterday and acted as a tailwind for the equity market.

In the Eurozone, comments from ECB President Christine will remain the focus for traders ahead of the key Wednesday amid the EU policymakers’ readiness to use emergency powers to avoid a supply crisis, as ECB Vice President Luis de Guindos said on Monday that growth slowdown is not enough to ease inflation.

The benchmarks, S&P 500 and Dow Jones Industrial Average both climbed higher on Monday as the rally in mega-caps like Apple Inc. and Tesla Inc. drove a late-day rebound for the market. The S&P 500 was up 0.7% on a daily basis and the Dow Jones Industrial Average also edged higher with a 0.6% gain for the day. Nine out of eleven sectors in the S&P 500 stayed in positive territory as the Materials and the Consumer Discretionary are the best performing among all groups, rising 1.63% and 1.34%, respectively. The Nasdaq 100 meanwhile advanced the most with a 0.8% gain on Monday and the MSCI World index was up 0.4% for the day.

Main Pairs Movement
The US dollar was little changed on Monday, failing to preserve its upside traction and retreated to a daily low near 109.6 level in the late US session amid the recovering market sentiment. Traders brace for major central bank decisions as over fifteen institutions are set to decide between Wednesday and Thursday, including the US Federal Reserve, the Bank of England, the Bank of Japan, and the Switzerland National Bank.

GBP/USD rebounded slightly on Monday with a 0.14% gain as the slightly positive market sentiment lifted the cable higher towards the 1.143 area. On the UK front, the Bank of England is expected to increase the Bank’s Rate by 50 bps on Thursday. Meanwhile, EUR/USD recovered slightly from daily lows and extended its late-day rebound toward the 1.003 mark touching a three-day top above the 1.003 level amid a light calendar and an absence of the UK and Japan. The pair was up almost 0.10% for the day.

Gold was nearly unchanged for the day after recovering from daily lows around the $1,660 mark during the US trading session, as the pre-event cautious, a light calendar and quiet macro both contributed to the metal’s inaction. Meanwhile, WTI Oil advanced higher with a 0.22% gain for the day and rebounded back to the $86 area as markets remain in anticipation of the Federal Reserve and a slew of other central banks that meet this week.

Economic Data

CurrencyDataTime (GMT + 8)Forecast
CNYPBoC Loan Prime Rate09:153.65%
AUDRBA Meeting Minutes09:30
USDBuilding Permits (Aug)20:301.61M
CADCore CPI (Aug)20:30