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Bob Mason
Euro boat in the crisis - investment risk concept

The Stats

It was a busier week on the economic calendar in the week ending 16th August.

A total of 61 stats were monitored throughout the week, compared with 58 in the week prior.

Of the 61 stats, 30 came in ahead forecasts, with 20 economic indicators coming up short of forecast. 11 stats were in line with forecasts in the week.

Looking at the numbers, 21 of the stats reflected an upward trend from previous figures. Of the remaining 40, 32 stats reflected a deterioration from previous.

While the economic data was skewed to the negative, the Dollar found support from better than expected data on the week. The gains came in spite of negative sentiment towards the U.S – China trade war.

Central bank monetary policy, geopolitical risk and economic data were all in focus throughout the week. While economies and central banks were looking to ready for more easing, stats out of the U.S suggested that the FED may be able to hold off…

The U.S Dollar Index (“DXY”) rose by 0.73% in the week to 98.203.


Out of the U.S

It was a busy week on the economic data front for the Greenback.

July inflation figures kicked off the week on Tuesday. A pickup in the annual rate of core inflation to 2.2% raised doubts over whether the FED would cut rates in the coming months.

Focus then shifted to a particularly busy Thursday. On the day, July retail sales, manufacturing PMI and industrial production figures were in focus.

A jump in retail sales provided further Dollar support, adding further doubts on whether a rate cut is on the horizon.

Manufacturing sector data failed to impress, but had a muted impact on the day.

On the day, employment figures and industrial production numbers also disappointed. But, with retail sales on the rise, the Dollar was relatively resilient to the numbers.

Closing out the week, consumer sentiment and housing sector figures were in focus on Friday. While housing sector numbers were mixed, consumer sentiment figures disappointed on the day. In spite of the softer numbers, there was little impact on the Dollar as its peers struggled at the end of the week.

On the monetary policy front, expectations are for the FED to cut rates, however, to offset the effects of a global slowdown. The outlook comes in spite of decent economic data out of the U.S…

While the stats and sentiment towards FED monetary policy provided direction, trade war chatter was also of influence in the week.

In the equity markets, the U.S majors closed out the week in the red once more. The Dow led the way, falling by 1.53%, with a Friday 1.20% gain limiting the damage. The NASDAQ and S&P500 weren’t far behind, with losses of 0.79% and 1.03% respectively.

Out of the UK

It was another particularly busy week on the economic data front.

Key stats included employment figures on Tuesday, July inflation figures on Wednesday and retail sales numbers on Thursday.

Following the disappointment of 2nd quarter GDP numbers in the week prior, the stats were Sterling positive.

While the unemployment rate edged up from 3.8% to 3.9% in June, there was a 115k jump in employment in the 2nd quarter. Claimant counts eased in July to 28k rise, following a 31.4k increase in June.

Wage growth also impressed, picking up from 3.5% to 3.7% in June.

Inflation figures on Wednesday added to the upside in the Pound. While consumer price stalled, month-on-month, the annual rate of inflation picked up from 2% to 2.1%.

The producer input price index also saw upward pressure, rising by 0.9% in July.

Rounding off the week were better than expected retail sales figures on Thursday. While easing back from June, there was a further upside, coming in ahead of forecast.

On the monetary policy front, the numbers will give the BoE some breathing room. It’s worth noting, however, that retail sales were softer than in June and the economy contracted in the 2nd quarter…

The Pound ended the week up by 0.96% to $1.2149.

For the FTSE100, it was another week in the red, with the index sliding by 1.88% off the back of a 2.07% fall from the previous week.

Out of the Eurozone

It was a particularly busy week on the economic data front.

The week kicked off with a bang, as the EUR responded to August ZEW economic sentiment figures on Tuesday.

Germany’s ZEW Economic Sentiment Index fell from -24.5 to -44.1. Things were not much better from the Eurozone. The Eurozone’s ZEW Economic Sentiment Index fell from -20.3 to -43.6.

GDP numbers out of Germany on Wednesday also weighed. Germany’s economy contracted by 0.1% in the 2nd quarter, which was in line with forecast. Year-on-year, the economy stalled, which was better than a forecast of 0.3% contraction.

In spite of the weaker growth, the Eurozone’s GDP numbers were in line with 1st estimates. Quarter-on-quarter, the economy grew by 0.2% and 1.1%, year-on-year.

With the GDP numbers in focus, a 1.6% slide in industrial production across the Eurozone failed to force a sell-off.

While there were no stats on Thursday, dovish chatter from the ECB led to a EUR slide to sub-$1.11 levels before finding support.

ECB member Rhen talked of the need for the ECB to deliver a significant and hard-hitting stimulus package at the next policy meeting.

To Wrap up the week, the Eurozone’s June trade data also influenced. A narrowing in the Eurozone’s trade surplus signaled yet another red flag.

The EUR ended the week down by 0.99% to $1.1090 against the Dollar. While disappointing stats were nothing new, talk of significant stimulus on the monetary policy front was…

For the European major indexes, it was another bearish week for the majors. The DAX30 fell by 1.12%, while the CAC40 fell by a more modest 0.51% on the week.


It was another bearish week for the Aussie and Kiwi Dollars.

The Aussie Dollar fell by 0.10% to $0.6779, with the Kiwi Dollar sliding by 0.60% to $0.6429.

For the Aussie Dollar

It was a relatively busy week on the data front. Stats included business and consumer confidence and 2nd quarter wage growth figures early in the week.

The numbers were skewed to the positive. Business confidence saw a marginal improvement in July, while consumer confidence rebounded in August.

A combined pickup in consumer confidence and a marginal pickup in wage growth in the 2nd quarter provided support.

July employment figures on Thursday also provided the Aussie Dollar with support. While the unemployment rate held steady, employment jumped by 41.1k in July, following a 0.5k rise in June.

From elsewhere, disappointing economic data out of China led to rising fears of a global recession. Trade war chatter also pinned the Aussie Dollar back in the week.

For the Kiwi Dollar

Economic data was limited to July electronic card retail sales and Business PMI figures.

Both sets of numbers disappointed. Electronic card retail sales fell by 0.1% in July, after having stalled in June.

The Business PMI also weighed, with the manufacturing sector contracting in July. The PMI fell from 51.3 to 48.2.

In spite of the weak numbers, a material slide was avoided in the wake of the RBNZ’s surprise move last week.

For the Loonie

It was a particularly quiet week on the economic data front.

June foreign securities purchases, out on Friday, was the only stat out of Canada. The figures failed to move the Loonie on the day.

Outside of the stats, crude oil prices and negative sentiment towards the global economic outlook weighed.

In the early part of the week, industrial production numbers out of China and GDP numbers out of Germany set the tone.

The Loonie ended the week down by 0.36% to C$1.3269 against the Greenback.

For the Japanese Yen

Economic data was limited to June finalized industrial production figures on Thursday. While revised upwards to a 3.3% fall, the effects of the ongoing U.S – China trade war on demand was evident.

The weak industrial production numbers out of China and Germany’s GDP numbers added to the market angst.

In spite of the risk aversion, however, the Yen struggled as sentiment towards FED monetary policy flip-flopped throughout the week.

For the week, the Japanese Yen slipped by 0.65% to ¥106.38.

Out of China

It was a relatively quiet week on the data front. July fixed asset investment and industrial production numbers provided direction on Wednesday.

A weak year-on-year industrial production figure hit risk sentiment on the day, raising yet more red flags over the global economic outlook.

While the numbers provided further evidence of a weakening in the Chinese economy, China’s reaction to Trump’s announced delay to next month’s tariffs tested the markets.

China announced late in the week that a delay in tariffs was not enough to prevent retaliatory measures. News of China ramping up soybean imports from Brazil on Friday will be a test for the majors and the U.S President…

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