A Week in the Market (08/10 - 08/17): It’s Time to Reconsider Plans

A Week in the Market (08/10 - 08/17): It’s Time to Reconsider Plans

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The USA reported on the labor market, which means it’s high time to expect new data from other, equally important global economies.

GBP: get ready for abrupt movements

GBP: get ready for abrupt movements

There will be a lot of interesting data on employment. Earlier, official forecasts were quite alarming and said that the labor market would be under pressure until the end of 2020 but there is nothing surprising about that – for businesses and enterprises, it would be extremely difficult to get back to their normal life. The United Kingdom is scheduled to report on the Unemployment Rate, which is expected to go from 3.9% in May to 4.2% in June. The Average Earnings Index may lose 0.1% 3m/y after being -0.3% 3m/y in the previous period. Another report, the Claimant Count Change, may go down (at least in theory) and the more this decrease the better for the Pound.

In addition to that, the UK will publish the GDP report for the second quarter. In the first three months of 2020, the country’s economy lost 2%, while in the second one it may plummet by 18-20%. It’s okay because by the end of the year the indicator is expected to recover and the second quarter reading will be the worse in ages over. However, just remember what kind of time was that. Needless to say, that the weak statistics will make the Pound plunge.

EUR: it’s time to stand still

EUR: it’s time to stand still

This week, the Euro Area will report on the ZEW Economic Sentiment. Last time, the indicator managed was above the psychologically-crucial level of 50 points, so the major goal this time is fix higher above it. Also, there will be reports on the GDP in the second quarter, the Employment Change, and Industrial Production. All these numbers taken together may help market players to understand whether the enormous stimulus measures were effective or a waste of money.

USD: the greenback got a chance

USD: the greenback got a chance

We’re keeping a close eye on the US inflation data as it might show 0.6-0.8%, which is still less than the target of 2%. The stronger the Consumer Price Index, the less the likelihood that the Federal Reserve will offer additional stimulus measures in the nearest future. Other important things are the Industrial Production (are there any orders? If yes, it’s good as they may boost a consumer-producer chain) and the Retail Sales.

In the short-term, the USD is under pressure but it gives the American economy a head start for quicker recovery.

Numbers from China will boost everything at once

Numbers from China will boost everything at once

One should pay attention to the Foreign Direct Investment report for July. The indicator may show whether global investors are ready to bring their money to China after a coronavirus pause or the time hasn’t come yet. It’s very important because if the Chinese economy is already attractive to foreign investments, it means that the global economy is ready to start a complete recovery. The data on Chinese inflation may hint at future steps and the National bank – continue suppressing the CNY loosen control a little bit.

Brent may possibly fix above 45 USD

Brent may possibly fix above 45 USD

Oil is currently pretty optimistic due to good statistics from China, a decline in output in Iran, and a reducing number of oil rigs in the USA. In this light, Brent has good chances to surpass 45 USD and go higher.




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