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AFEX Market Watch
Monday Jul 25th
09:00 EUR German IFO Business Climate
11:00 CBI Industrial order expectations
23:45 NZD Trade Balance
Tuesday Jul 26th
09:30 GBP BBA Mortgage approvals
15:00 USD Conference Board Consumer Confidence
Wednesday Jul 27th
02:30 AUD CPI QoQ
09:30 GBP Preliminary GDP QoQ
13:30 USD Core Durable Goods Orders MoM
15:30 USD Crude Oil Inventories
19:00 USD FOMC Decision and Statement
Thursday Jul 28th
13:30 USD Unemployment claims
Friday Jul 29th
00:30 JPY Core CPI YoY
02:00 JPY BOJ Outlook Report and Press Conference
12:00 EUR EBA bank Stress Tests
13:30 CAD GDP MoM
13:30 USD Advance GDP QoQ
Overall the market is waiting for data providing updates on the UK economy after June 24th and Friday saw the first PMI data since the Brexit vote. The PMI Services reading came in at 47.4 and was the biggest drop on record with the composite reading of services, manufacturing and construction being 47.7 showing a sharp contraction in the UK economy and being the lowest level since April 2009. For this week we have the release of CBI industrial order expectations on Monday morning and we then move on to UK mortgage approvals on Tuesday. Preliminary GDP is released on Wednesday and is followed by the BoE releasing its mortgage approval data for June on Friday. All of these releases will be used to gauge to see if the Pound should continue its fall across the board.
The EUR managed to gain ground against the Pound on the back of Sterling weakness but overall trading has been limited and quiet recently. The only noteworthy news on Friday was that the Head of the IMF Christine Lagarde is to be tried for negligence over a pay out to French multimillionaire Bernard Tapie for Euro 404 million in 2008 when she was France’s economy minister. At the G20 meeting in China over the weekend the acting Spanish economy minister said that Spain’s economy could grow 2.9% this year and better than the 2.7% target, this is despite Spain not having a Govt. and if they can get one soon things could be even better. Unfortunately there have been at least 2 very serious incidents/attacks in Germany over the weekend which doesn’t bode well for EU stability.
When the other developed market currencies are under pressure the USD is bound to benefit and last week it gained nicely against developed markets and the commonwealth currencies as well. G20 over the weekend voiced concerns over Globalisation slowing down and certainly it seems like populations around the World want to travel on a different path that is currently being trod. Wednesday is the big day for the US this week with the FOMC meeting and interest rate announcement although we expect no change here. This is followed by the BOJ meeting on Friday with the market expecting stimulus varying from Yen 10 Trillion to Yen 30 Trillion.
Commonwealth et al
The AUD, NZD and CAD have all been under pressure recently as the market considers the need for lower interest rates in Australian and NZ and the oil price weighs upon the CAD. We have AUD CPI released on Wednesday morning and if this is weak will be seen as a reason for a rate cut from the RBA on August 2nd.
My contact details are below if you are interested in discussing in more detail regarding this week’s events or to open a free business account with AFEX.
Please call Richard Torres 0207 004 3887 – Quoting “Start Up Overseas Account”