The Week that Was and the Week Ahead – Wall Street Proves Stable, U.S. Dollar Stumbles on Inflation Data
U.S. Investors Show Fortitude, Dollar Resumes Weak Trend, Inflation Data Remains Poor
U.S investors showed fortitude on Friday as all three US major Indexes added value and Wall Street’s vulnerability dampened. The Core Consumer Price Index reading published before going into the weekend missed its estimate and this immediately caused fast conditions in forex as the U.S Dollar became weak across the board. While the U.S and North Korea crisis continues to be heard, the rhetoric in the short-term seems to have lessened. Retail Sales figures will come from the States on Tuesday and the Federal Reserve’s Meeting Minutes will be published on Wednesday. The U.S Dollar will be watched closely by investors. After making quick gains on safe haven wagers early last week, poor inflation data has reignited selling of the U.S Dollar.
An Immediate Test for Japanese Equities, Important Chinese Data Early Monday
Upon opening on Monday, the Nikkei Index will face an immediate test. After being closed on Friday because of a banking holiday, traders will have to decide to factor in a vast slide in the Nikkei which took place leading up to the holiday and weigh that against the relatively stable results which developed in the States before going into the weekend. Asian investors remain tense regarding the North Korean situation, but will have had time to digest the rhetoric when they return to their offices. China will release important Industrial Production results early on Monday, and Japan will publish Preliminary Gross Domestic Product numbers very late tonight. The Yen is near important support after putting in significant gains against the U.S Dollar and should be watched attentively.
Euro and Pound Advance, DAX Slide Continues
The Euro and Pound surged against the U.S Dollar on Friday as traders reacted to another lackluster inflation outcome from the States. A Core Consumer Price Index report will be issued in the U.K on Tuesday and on Wednesday potentially intriguing Gross Domestic Product figures will come from the European Union. The Dax went into the weekend with slight losses and is down nearly 5% the past month. The Euro again finds itself above the 1.18 level against the U.S Dollar. Brexit news could develop this week, as the U.K tries to forward its talks with E.U, while Scotland and Wales have said they are against many measures the U.K is proposing.
A Powerful Week of Gains, Risk Adverse Sentiment Helping
Gold finished a powerful week of gains by adding more value late on Friday. The precious metal is near 1294.00 U.S Dollars an ounce and touching important resistance. Risk adverse sentiment has certainly helped gold, and buying has been aided too by the weak U.S Dollar. Some traders may be tempted to seek reversals, but they should be alert and acknowledge the precious metal’s strong trend.
Industrial Numbers from China, U.K. Consumer Data on Calendar
Early on Monday China will release its Industrial Production results at 2:00 GMT. The U.K will issue its Consumer Price Index data on Tuesday at 8:30 GMT. And on Wednesday at 9:00 GMT, Gross Domestic Product numbers will come from the European Union. Retail Sales statistics will be published from the U.K on Thursday at 8:30 GMT. And rounding off the week will be a Consume Sentiment report in the U.S from the University of Michigan at 14:00 GMT.
Highlighted Economic Data
Monday, 12:50 AM Japan GDP
Monday, 2:00 AM GMT China Industrial Production
Tuesday, 7 AM German 2Q GDP
Tuesday, 8:30 AM GMT U.K., Consumer Price Index
Tuesday, 13:30 PM US July Retail Sales
Wednesday, 9:00 AM E.U., Flash Gross Domestic Product
Wednesday, 19:00 PM FOMC Minutes
Thursday, 8:30 AM GMT U.K., Retail Sales
Friday, 14:00 PM GMT U.S., Prelim Consumer Sentiment U. of Michigan
Yaron Mazor is a senior analyst at SuperTraderTV.
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