Fill your boots with today’s batch of economic data for the Eurozone
Today’s global economic calendar is chock-a-block with data. A slew of economic data points has just been released from the Eurozone. To start with, German retail sales rebounded more than expected in July, and the nation’s jobless rate continues to remain at a record low level this month. Italy’s unemployment rate surprisingly declined in July. Looking ahead, investors have their eyes set on the Eurozone’s consumer price index (CPI) data for August, scheduled to release today.
In the UK, house prices rose to a 5-month high level in August. Later in the day, investor attention will turn to the US private sector employment data for August, which will be widely read for a perspective on the government’s official payrolls report due at the end of this week.
Pound Sterling – UK Markets
The Pound is trading higher against its major peers this morning. A report released earlier in the session by UK’s mortgage lender Nationwide Building Society showed that British house prices surprisingly advanced in August, notching a 5-month high level. This was because a shortage of supply managed to outweigh the impact of Britain's Brexit vote. Separately, UK’s GfK consumer confidence index improved more than expected in August, recording its best monthly rise since June 2015, as all 5 components of the index registered an increase. This comes as welcome news after last month’s reading of the index plummeted to a 26-year low level, in the immediate aftermath of the Brexit vote. However, the Lloyds Bank’s business barometer index declined in August.
Yesterday, Sterling ended lower against the greenback, amid a broad strength in the US Dollar. On the data front, a report released by the Bank of England indicated that growth in the amount being borrowed by British consumers on credit cards and other loans declined in July, its first drop since December 2014.
US Dollar – US Markets
The US Dollar is trading lower against the Euro and the Pound this morning, as investors keenly wait to see if upcoming US jobs data could prompt the Fed to raise interest rates as soon as September. The US labour market has been showing signs of little to no slack in the previous couple of months, with the increase in nonfarm payrolls for June and July comfortably coming in above 250k. Meanwhile, the greenback has been trading on a stronger footing after last week’s hawkish comments from the Fed Chair, Janet Yellen, and other key officials, sparking expectations that the central bank could raise rates as early as next month.
Yesterday, data showed that the US consumer confidence hit an 11-month high in August, indicating economic growth could pick up in the second half of the year. Data also suggests that the Americans are very optimistic about the current and future economic situation, highlighting that consumer spending will provide a key support for the nation’s economy. Meanwhile, US home prices climbed at its slowest annual pace in 10 months in June.
Euro – European Markets
The shared currency is trading mixed against the greenback and the Pound this morning. Data released earlier in the session showed that German retail sales bounced back above expectations to reach a multi-year high level in July, reinforcing the role of private consumption in the nation’s economic performance. Further, Germany’s seasonally adjusted unemployment rate remained at a record low level of 6.1% in August. Meanwhile, in Italy, the jobless rate unexpectedly dropped in July and French producer prices for July remained flat. Moving ahead, market participants await the Eurozone’s flash CPI and unemployment rate data, scheduled to release in a few hours.
Yesterday, the Euro ended lower against its major peers on the back of soft German inflation numbers. German CPI remained flat in August, suggesting that price pressures in the Eurozone’s largest economy remain weak despite the European Central Bank's ultra-loose monetary policy. Additionally, economic sentiment in the Eurozone edged lower in August, reaching its lowest level since March 2016.
Other Currencies – Highlights
The Swiss Franc is trading higher against the US Dollar this morning, after data released earlier during the session showed that Switzerland’s UBS consumption indicator advanced in July, mainly driven by car sales. This indicates that private consumption is set to remain one of the main growth drivers in the country for the rest of the year. Market participants now look forward to Switzerland’s real retail sales and the SVME - purchasing managers' index - both for the month of August and scheduled to release tomorrow. At the end of this week, trading in the US Dollar – Swiss Franc currency pair will be determined by the release of the US nonfarm payrolls data for August.
In other economic news, Switzerland’s KOF leading indicator, a measure reflecting economic activity in the alpine country, declined more than expected to an 8-month low level in August, falling for the first time in 3 months. On the other hand, the nation’s employment level increased during the second quarter of this year.