Analysis and Recommendations: The EUR/USD fell 154 points reversing gains as trading returned to some normalcy as the PBOC stepped in to support the
The EUR/USD fell 154 points reversing gains as trading returned to some normalcy as the PBOC stepped in to support the markets. The euro is now at 1.1465. The People’s Bank of China announced today a 25 bps cut in the one-year benchmark lending rate to 4.6%, a 25 bps cut in the one-year benchmark deposit rate and a 50 bps lowering of reserve requirements for most big banks, in a move aimed to support the stuttering economy and plunging stock market.
The German Economy Minister said good economic conditions in Germany will continue helped by favorable European trends and a lower oil price, adding that he was not worried about the impact of the developments in China.
“Black Monday” is followed by “Turnaround Tuesday”. After three consecutive sessions of huge China-driven losses, European stocks gain around 5% while commodities rebound. Core bonds suffered a significant setback with Bunds underperforming. At the time of writing, the German yield curve bear steepens with yields 1.4 bps.
The German IFO business climate indicator rose for a second straight month in August, while the consensus was looking for a limited decline. The headline index rose from 108.0 to 108.3, reaching its highest level in three months. Looking at the details, the improvement was based in the current assessment sub-index while the expectations index weakened slightly, from 102.3 to 102.2.
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.
Today’s economic releases:
Cur. |
Event |
Actual |
Forecast |
Previous |
|||
NZD |
Inflation Expectations (QoQ) |
1.9% |
|
1.9% |
|
||
EUR |
German GDP (YoY) (Q2) |
1.6% |
1.6% |
1.6% |
|
||
EUR |
German GDP (QoQ) (Q2) |
0.4% |
0.4% |
0.4% |
|
||
CHF |
Employment Level (Q2) |
4.240M |
4.240M |
4.225M |
|
||
CNY |
PBoC Interest Rate |
4.60% |
|
4.85% |
|
||
CNY |
PBOC Reserve Requirement Ratio |
18.00% |
|
18.50% |
|
||
USD |
S&P/CS HPI Composite |
5.0% |
5.1% |
4.9% |
Upcoming Economic Events that you should be monitoring:
Wednesday, August 26, 2015
Cur. |
Event |
Actual |
Forecast |
Previous |
|||
USD |
API Weekly Crude Oil Stock |
|
|
-2.300M |
|
||
NZD |
Trade Balance (YoY) (Jul) |
|
-2,528M |
-2,850M |
|
||
NZD |
Trade Balance (MoM) (Jul) |
|
-600M |
-60M |
|
||
AUD |
Construction Work Done (QoQ) |
|
-1.5% |
-2.4% |
|
||
AUD |
RBA Governor Stevens Speaks |
|
|
|
|
||
GBP |
BBA Mortgage Approvals |
|
46.0K |
44.5K |
|
||
USD |
Core Durable Goods Orders |
|
0.4% |
0.6% |
|||
USD |
Durable Goods Orders (MoM) |
|
-0.4% |
3.4% |
|
||
USD |
FOMC Member Dudley Speaks |
|
|
|
|
||
USD |
Crude Oil Inventories |
|
|
2.620M |
Government Bond Auctions
Date Time Country
Aug 25 00:00 UK Announces details of Jan 2021 gilt
Aug 25 17:30 Italy Announces details of BTP/CCTeu on 28 Aug
Aug 25 19:00 US Holds 2-year note auction
Aug 26 11:10 Italy Eur 3bn 0.15% Aug 2017 CTZ
Aug 26 19:00 US Holds 2-year FRN note auction
Aug 26 12:05 Norway Holds bond auction
Aug 26 19:00 US Holds 5-year note auction
Aug 26 19:00 US Holds 2-year FRN auction
Aug 27 11:03 Sweden Sek 0.5bn 0.125% I/L Jun 2019, Sek 0.5bn 1% Jun 2025 bonds
Aug 27 19:00 US Holds 7-year note auction
Aug 28 11:10 Italy Auctions BTPs/CCTeus
Sep 01 11:15 Austria Holds RAGB bond sale
Sep 01 00:00 UK Announces details of 3.5% 2045 Gilt
Sep 02 11:03 Sweden Holds bond auction
Sep 02 11:30 Germany Eur 4bn 0.25% Oct 2020 Bobl
Sep 02 11:30 UK Auctions new Jan 2021 Gilt
Sep 03 10:30 Spain Auctions Bonos/Obligaciones
Sep 03 11:10 France Auctions OATs
Sep 03 00:00 US Announces details of 3yr note on 08 Sep, 10yr note on 09 Sep
Sep 03 00:00 US Announces details of 10-year note on 09 Sep