Tag Archives: Financenews

Following a highly volatile start to the week on financial markets last Monday, trade conditions improved slightly.

Trading conditions improved last week as a result of dovish remarks from Bank of Japan Deputy Governor Uchida and a relatively calm economic calendar on both sides of the Atlantic.

Furthermore, the main release of note, the US non-manufacturing ISM for July, printed ahead of the consensus, rising to 51.4 (vs. 51.0 f’cast). Elsewhere, there was a modest hardening in US market rate expectations last week.

In the coming week, data schedules in the UK and US will be extremely busy. The UK data calendar covers updates on the job market, inflation, and economic development. Meanwhile, in the United States, CPI inflation statistics for July will be closely watched. US retail sales and industrial output figures are also due.

For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.

There is no UK or EU data in the calendar today, so attention will turn to US releases.

US unemployment claims is set to slightly fall from Friday’s highest release this year to 240k. The number of people continuing unemployment claims is expected to remain inflated at 1.87 million. 

Global markets have seemed to stabilise mid-week, following the volatile movement last Friday that pointed the US economy towards a recession.

This week has been quiet in terms of key economic data releases. Investors will now be looking forward to next week, when we have the highly anticipated UK CPI inflation reading.

UK inflation held at the Bank of England’s target level of 2 percent in May and June. However, there are other concerns about underlying inflation, such as services inflation which remains high.

Employment figures (earnings & unemployment rate), Gross Domestic Product and Industrial production will be closely watched next week to see how the UK economy is fairing.

For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.

Today’s economic calendar is light in terms of economic data releases. Already released this morning, the number of new purchase orders in Germany increased by 3.9 percent in June (forecasted 0.5%).

In the Eurozone, investors will keep a close eye on the retail sales data. Markets are pricing in a marginal fall by – 0.1 percent in June.

Over the course of the last week, the markets have experienced increased volatility following the Bank of England’s close call (5-4 vote in favour of a cut) to reduce interest rates.

The Pound has been on the retreat and has lost much of its year-to-date gains against the Euro. It was only last month that GBPEUR hit a two-year high trading above 1.1900.

GBPUSD has moved 150 pips since the beginning of this month. The fall in the number of new jobs added (down for the second time this year) and the rise of the unemployment rate to 4.3 percent has placed pressure on the Federal Reserve to cut interest rates promptly. 

This week, the home front has a packed data schedule. A number of releases will provide an update on economic circumstances at the beginning of the third quarter. This will contain the announcement of the Exchequer Returns, unemployment rate, and July services PMI. Meanwhile, CPI inflation data for July is also due.

Additionally, the data calendar is extremely sparse. The Eurozone’s biggest feature will be retail sales in June. Sales are expected to increase by 0.1% this month, leaving them 0.2% higher year over year. Meanwhile, producer price inflation is expected to stay in negative territory, at -3.3% in June, up from -4.2 percent in May.

The German economy contracted again in the second quarter due to continued structural and cyclical pressures. Against this environment, industrial output has been declining over the last several years. Indeed, a slight 1% increase in output is projected for June, following a severe 2.5% drop in May.

In the United States, the only noteworthy release will be the non-manufacturing ISM for July. The index has fluctuated in and around the critical 50 threshold for some months, and this trend is likely to continue in July, with the ISM climbing to 51.0 from 48.0 in June. This week’s data calendar in the United Kingdom appears empty.

For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.

Yesterday, the BoE MPC voted 5 to 4 in favour of a 25bps rate drop. In the run-up to the announcement, markets anticipated a close call, with pricing leaning slightly towards a rate drop.

Meanwhile, the meeting summary, minutes, and press conference provided virtually little insight on the future course of policy.

Data-wise, the US manufacturing ISM for July fell considerably below the consensus of 48.8, to 46.8. New orders and employment were very low this month.

Meanwhile, US first unemployment claims increased to +249k, the biggest amount in nearly a year. In the Eurozone, the unemployment rate increased to 6.5% in June (compared to 6.4% forecast).

Yesterday, market rate expectations fell as a result of the BoE’s move to decrease interest rates and data disappointments in the United States and Europe. The Eurozone is forecast to ease policy by around 55 basis points between now and the end of the year, while rate cuts of 85 basis points and 40 basis points are priced in for the US and UK, respectively.

Looking ahead, payrolls are predicted to grow by 175k, down from +206k in June, while the unemployment rate remains at 4.1%. The announcement may affect the dollar.

For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.