Today’s Economic Calendar is Chock-A-Block with Data
Global market participants will find themselves knee-deep in economic reports today. The day began on an optimistic note with all the data points released until now showing an upward movement. It all started with the UK as the nation’s house price index data surpassed expectations in July. Post that, the German unemployment rate continued to stay at an all-time low in July as the number of jobless people fell for the tenth straight month. Further ahead, the European Commission will publish the July figures for the Eurozone’s business climate and consumer confidence indices data. Later in the day, Germany’s preliminary consumer price index (CPI) for July is scheduled for release.
Across the Atlantic, investors will witness the US weekly jobless claims, advance goods trade balance and the Kansas Fed manufacturing activity index data.
Pound Sterling – UK Markets
The Pound is trading lower against the US Dollar and the shared currency this morning. Data released by the UK Nationwide Building Society earlier during the day showed that house prices advanced above expectations in July. Moreover, annual growth in British house prices increased to a four-month high level during the same month. However, market participants quietly swept this latest data point under the carpet, believing that July figures might have failed to exhibit the true impact of the Brexit vote and that the future trend for the UK housing market remains uncertain. Going ahead, UK’s GfK consumer confidence index for July is scheduled to release overnight and is expected to drop further into the negative territory.
Yesterday, Sterling ended higher against the greenback, as investors digested the newly-released US Fed monetary policy statement. Separately, the CBI distributive trades survey for July showed that UK’s retail activity plunged at the fastest pace since January 2012, in the immediate aftermath of Brexit, with grocers, furniture and carpet stores reporting the biggest drop in sales.
US Dollar – US Markets
The US Dollar is trading mixed against the Euro and the Pound this morning following yesterday’s US Federal Reserve (Fed) interest rate decision. In a widely expected move, the central bank opted to keep its monetary policy unchanged by maintaining the key interest rate in a range between 0.25 and 0.5%, which was set in December. Meanwhile, the Fed officials were pleased with the improvement in the nation’s labour market and mentioned that “near term economic risks to the economy have reduced” despite the Brexit vote, thus possibly keeping the door open to raise interest rates later this year. On the downside, the Fed noted that inflation stayed below the 2% target due to earlier declines in energy prices and is expected to remain low in the short term. Nevertheless, it expects prices to rise towards the desired level over the medium term.
In other economic news, data showed that orders for durable goods tumbled in June, pulled lower by weaker demand for machinery, marking the biggest drop since August 2014.
Euro – European Markets
The shared currency is trading on a strong footing against its major peers this morning. Just like yesterday, there is a deluge of economic data today in the Eurozone. To begin with, the day started off on a positive note as Germany’s unemployment rate held steady at a record-low level of 6.1% in July. Meanwhile, Spain also found something to cheer about as jobless rate dropped to a six-year low level during the second quarter of this year, even as the nation struggles to form a government and put an end to the seven-month political deadlock. Additionally, Italian wage inflation advanced in June.
Going ahead, the pace of economic releases will gather speed as the day passes. Next up is the Eurozone business climate indicator for July. In June, the index had dipped for the first time in four months and is expected to fall further this month. Later in the day, Germany’s flash consumer price index is likely to advance in July.
Other Currencies – Highlights
The Canadian Dollar has reversed its previous session losses and is trading higher against the greenback this morning, tracking the recovery in oil prices. Throughout this week, the Canadian Dollar was at the mercy of oil prices, Canada’s most lucrative commodity. Moving ahead, this week’s first set of economic data points from Canada will see the light tomorrow. The nation’s GDP had recorded a small gain in April and is expected to worsen in May. In addition to this, Canada’s industrial product price growth and raw material price index, which measures inflation in the manufacturing sector, is likely to soften in June. Looking further ahead into next week, Canada’s RBC manufacturing PMI, international merchandise trade balance, unemployment rate and the Ivey purchasing managers index are lined up for release.
Earlier in the session, the US Fed held the benchmark interest rate steady and indicated that the US labour market strengthened, with economic activity expanding at a moderate rate. Separately, the US witnessed the release of disappointing durable goods orders data for June.