Time | Country | Event | Period | Previous value | Forecast |
---|---|---|---|---|---|
00:30 | Australia | Leading Index | August | 0.1% | |
06:00 | United Kingdom | Retail Price Index, m/m | August | 0.5% | -0.3% |
06:00 | United Kingdom | Producer Price Index - Input (YoY) | August | -5.7% | -4.9% |
06:00 | United Kingdom | Producer Price Index - Input (MoM) | August | 1.8% | 0.3% |
06:00 | United Kingdom | Producer Price Index - Output (YoY) | August | -0.9% | -0.7% |
06:00 | United Kingdom | Producer Price Index - Output (MoM) | August | 0.3% | 0.2% |
06:00 | United Kingdom | Retail prices, Y/Y | August | 1.6% | 0.6% |
06:00 | United Kingdom | HICP ex EFAT, Y/Y | August | 1.8% | |
06:00 | United Kingdom | HICP, m/m | August | 0.4% | -0.6% |
06:00 | United Kingdom | HICP, Y/Y | August | 1% | 0% |
09:00 | Eurozone | Trade balance unadjusted | July | 21.2 | |
12:30 | Canada | Foreign Securities Purchases | July | -13.5 | |
12:30 | U.S. | Retail Sales YoY | August | 2.7% | |
12:30 | U.S. | Retail sales excluding auto | August | 1.9% | 0.9% |
12:30 | U.S. | Retail sales | August | 1.2% | 1% |
12:30 | Canada | Consumer Price Index m / m | August | -0.1% | 0.1% |
12:30 | Canada | Bank of Canada Consumer Price Index Core, y/y | August | 0.7% | |
12:30 | Canada | Consumer price index, y/y | August | 0.1% | 0.4% |
14:00 | U.S. | NAHB Housing Market Index | September | 78 | 78 |
14:00 | U.S. | Business inventories | July | -1.1% | 0.1% |
14:30 | U.S. | Crude Oil Inventories | September | 2.032 | 2.049 |
18:00 | U.S. | FOMC Economic Projections | |||
18:00 | U.S. | Fed Interest Rate Decision | 0.25% | 0.25% | |
18:30 | U.S. | Federal Reserve Press Conference | |||
20:00 | U.S. | Total Net TIC Flows | July | -67.9 | |
20:00 | U.S. | Net Long-term TIC Flows | July | 113 | |
22:45 | New Zealand | GDP q/q | Quarter II | -1.6% | -12.8% |
22:45 | New Zealand | GDP y/y | Quarter II | -0.2% |
FXStreet reports that the pound suffered a significant sell off last week with the EUR/GBP pair surpassing the 0.92 level and economists at Rabobank continue to view the pound as a vulnerable currency, therefore, a move towards the last year high at 0.9325 is likely in the next weeks.
“The current outlook for the pound is mired by an increased chance of another bout of parliamentary chaos and/or risk that the UK will be trading with the EU on WTO terms in the New Year. Even if a trade deal is struck, the tight timeframe left for the negotiations suggests that it is unlikely to be a comprehensive agreement. This suggests that beyond an initial relief rally, a trade deal could fail to garner the enthusiasm of the investment community.”
“Even though EUR/GBP sailed past our long-term target of 0.92 at the end of last week, we would not rule out further losses for the pound in the current environment and certainly see scope for more volatility. Bearing in mind also that the EUR has displayed broad-based strength in recent months, an escalation of tensions between the EU and UK governments with respect to the latter’s intention to break its commitment to the Withdrawal Agreement could threaten a move towards last year’s high in the 0.9325 area in the coming weeks.”
FXStreet reports that economists at TD Securities analyze three possible scenarios for the Fed’s Monetary Policy Statement due out on Wednesday at 18:00 GMT. A dovish tone is set to reinforce the cyclical headwinds facing the USD and soggy trading tone, but likely supportive of risk appetite. 105.20 and 1.1917 in USD/JPY and EUR/USD will be key pivots.
“Hawkish (13%): Minimal changes to forward guidance and characterization of QE in the statement; more upbeat tone on the outlook following stronger-than-expected data recently... Suggestion that Fed may have eased enough given better-than-expected data recently. USD/JPY 106.20 EUR/USD 1.1760.”
“Base Case (65%): No inflation-outcome-based specificity in forward guidance yet, but AIT reflected in the statement and QE wording changed to make financial conditions broadly the main focus. Little change in tone on the economy... Emphasis on downside risks. Suggestion that dovish forward guidance could be made more dovish when communications part of review concludes, and that QE could be made more accommodative via the composition of purchases. USD/JPY 105.20 EUR/USD 1.1975.”
“Dovish (22%): Introduction of specific inflation-outcome-based forward guidance, such as a minimum 2.5% pace before tightening; QE made more long-end focused, boosting stimulus in effort to raise inflation and lower unemployment... Unambiguous signal that officials will back up their words on AIT with action. USD/JPY 104.80 EUR/USD 1.2010.”
WTO panel issued a report regarding the U.S. tariffs on Chinese goods today. The page 65 of the document reveals that the Panel concludes that "the United States has not met its burden of demonstrating that the measures are provisionally justified under Article XX(a) of the GATT 1994" and "recommends that the United States bring its measures into conformity with its obligations under the GATT 1994."
Statistics
Canada released its Monthly Survey of Manufacturing on Tuesday, which showed
that the Canadian manufacturing sales jumped 7.0 percent m-o-m in July to CAD53.13
billion, following a revised 23.0 percent m-o-m climb in June (originally a 20.7
percent m-o-m surge).
Economists had
forecast an 8.7 percent m-o-m advance for July.
According to the survey, higher sales in the transportation equipment industry (+24.1 percent m-o-m) were the major contributor to the July gain. Overall, sales advanced in 13 of 21 industries, representing 68 percent of total Canadian manufacturing. Notable gains in sales were also posted by such industries as petroleum and coal product (+13.0 percent m-o-m) and plastic and rubber product (+15.1 percent m-o-m). Meanwhile, food manufacturing (-1.4 percent m-o-m) and primary metal (-1.4 percent m-o-m) made the biggest negative contribution to the growth.
Overall, sales
of durable goods industries surged 10.4 percent m-o-m in July, while sales of
non-durable goods industries rose 3.3 percent m-o-m.
The Federal
Reserve reported on Tuesday the U.S. industrial production rose 0.4 percent
m-o-m in August, following a revised 3.5 percent m-o-m climb in July
(originally a 3.0 percent m-o-m gain).
Economists had
forecast industrial production would increase 1.0 percent m-o-m in August.
According to
the report, manufacturing output grew 1.0 percent m-o-m in August, although the
gains for most manufacturing industries have gradually slowed since June.
Meanwhile, the output of utilities fell 0.4 percent m-o-m in August and mining
production decreased 2.5 percent m-o-m as Tropical Storm Marco and Hurricane
Laura caused steep but temporary declines in oil and gas extraction and well
drilling.
Capacity
utilization for the industrial sector increased 0.3 percentage points m-o-m to
71.4 percent in August. That was in line with economists’ forecast but 8.4 percentage
points below its long-run (1972-2019) average.
In y-o-y terms,
the industrial output dropped 7.7 percent in August, following a revised 7.4 percent
plunge in the prior month (originally an 8.2 percent decline).
U.S. stock-index futures rose on Tuesday, as upbeat data out of China and Europe revived optimism around a global economic rebound, while investors waited for a two-day meeting of the U.S. Federal Reserve, set to begin later today.
Global Stocks:
Index/commodity | Last | Today's Change, points | Today's Change, % |
Nikkei | 23,454.89 | -104.41 | -0.44% |
Hang Seng | 24,732.76 | +92.48 | +0.38% |
Shanghai | 3,295.68 | +16.87 | +0.51% |
S&P/ASX | 5,894.80 | -4.70 | -0.08% |
FTSE | 6,103.56 | +77.31 | +1.28% |
CAC | 5,082.15 | +30.27 | +0.60% |
DAX | 13,248.54 | +54.88 | +0.42% |
Crude oil | $37.70 | +1.18% | |
Gold | $1,974.70 | +0.56% |
(company / ticker / price / change ($/%) / volume)
3M Co | MMM | 170.16 | 1.70(1.01%) | 16891 |
ALCOA INC. | AA | 14.25 | 0.20(1.42%) | 1779 |
ALTRIA GROUP INC. | MO | 43.15 | 0.15(0.35%) | 26624 |
Amazon.com Inc., NASDAQ | AMZN | 3,140.00 | 37.03(1.19%) | 53824 |
American Express Co | AXP | 108.02 | 0.75(0.70%) | 3444 |
AMERICAN INTERNATIONAL GROUP | AIG | 29.77 | 0.37(1.26%) | 6396 |
Apple Inc. | AAPL | 118.35 | 2.99(2.60%) | 2464634 |
AT&T Inc | T | 29.27 | 0.13(0.45%) | 59519 |
Boeing Co | BA | 166.71 | 1.36(0.82%) | 70185 |
Caterpillar Inc | CAT | 154.9 | 1.39(0.91%) | 4451 |
Chevron Corp | CVX | 77.85 | 0.56(0.72%) | 9974 |
Cisco Systems Inc | CSCO | 40.54 | 0.17(0.42%) | 38076 |
Citigroup Inc., NYSE | C | 48.74 | 0.59(1.23%) | 357164 |
E. I. du Pont de Nemours and Co | DD | 59.94 | 0.51(0.86%) | 931 |
Exxon Mobil Corp | XOM | 36.97 | 0.31(0.85%) | 62458 |
Facebook, Inc. | FB | 270.69 | 4.54(1.71%) | 129083 |
FedEx Corporation, NYSE | FDX | 237.3 | 0.96(0.41%) | 65176 |
Ford Motor Co. | F | 7.17 | 0.05(0.70%) | 76753 |
Freeport-McMoRan Copper & Gold Inc., NYSE | FCX | 16.55 | 0.19(1.16%) | 28178 |
General Electric Co | GE | 6.18 | 0.03(0.49%) | 234388 |
General Motors Company, NYSE | GM | 31.1 | -0.08(-0.26%) | 29926 |
Goldman Sachs | GS | 202.87 | 1.53(0.76%) | 5416 |
Google Inc. | GOOG | 1,530.00 | 10.72(0.71%) | 4818 |
Hewlett-Packard Co. | HPQ | 19.34 | 0.01(0.05%) | 1131 |
Home Depot Inc | HD | 284.25 | 3.60(1.28%) | 3671 |
HONEYWELL INTERNATIONAL INC. | HON | 169.4 | 0.93(0.55%) | 938 |
Intel Corp | INTC | 49.58 | 0.17(0.34%) | 114517 |
International Business Machines Co... | IBM | 122.94 | 0.85(0.70%) | 1962 |
International Paper Company | IP | 41.04 | 0.25(0.61%) | 947 |
Johnson & Johnson | JNJ | 149.26 | 0.91(0.61%) | 4026 |
JPMorgan Chase and Co | JPM | 103.28 | 0.81(0.79%) | 15150 |
Merck & Co Inc | MRK | 84.5 | 0.34(0.40%) | 2597 |
Microsoft Corp | MSFT | 207.69 | 2.28(1.11%) | 172686 |
Nike | NKE | 119.9 | 0.62(0.52%) | 7936 |
Pfizer Inc | PFE | 37.31 | 0.30(0.81%) | 80308 |
Procter & Gamble Co | PG | 139.4 | 0.77(0.56%) | 1357 |
Starbucks Corporation, NASDAQ | SBUX | 87.57 | 0.94(1.09%) | 18811 |
Tesla Motors, Inc., NASDAQ | TSLA | 439.43 | 19.81(4.72%) | 2134217 |
The Coca-Cola Co | KO | 50.97 | 0.26(0.51%) | 14639 |
Travelers Companies Inc | TRV | 115.06 | 0.60(0.52%) | 296 |
Twitter, Inc., NYSE | TWTR | 39.23 | 0.46(1.19%) | 11324 |
UnitedHealth Group Inc | UNH | 310.54 | 1.97(0.64%) | 527 |
Verizon Communications Inc | VZ | 60.53 | 0.21(0.34%) | 4096 |
Visa | V | 206.6 | 1.62(0.79%) | 11227 |
Wal-Mart Stores Inc | WMT | 138.45 | 1.13(0.82%) | 65031 |
Walt Disney Co | DIS | 131.27 | 0.02(0.02%) | 19043 |
Yandex N.V., NASDAQ | YNDX | 64 | 1.42(2.27%) | 20223 |
The report from
the New York Federal Reserve showed on Tuesday that manufacturing activity in
the New York region expanded at a solid pace in early September.
According to
the survey, NY Fed Empire State manufacturing index rose from 3.7 in August to 17.0
in September.
Economists had
expected the index to come in at 6.0.
Anything below
zero signals contraction.
According to
the report, the new orders index increased nine points to 7.1, pointing to a modest
advance in orders, and the shipments index rose seven points to 14.1,
indicating a significant gain in shipments. Meanwhile, the employment index held steady
at 2.6, indicating little change in employment levels. Elsewhere, unfilled
orders and inventories continued to decline, and delivery times were somewhat
longer. On the price front, the prices paid index climbed nine points to 25.2,
pointing to a pickup in input price increases, while the prices received index
edged up to 6.5, its highest level since March, indicating that selling prices rose
for the second consecutive month.
Alphabet A (GOOG/L) initiated with an Overweight at KeyBanc Capital Markets; target $1955
Facebook (FB) initiated with an Overweight at KeyBanc Capital Markets; target $330
Netflix (NFLX) initiated with an Overweight at KeyBanc Capital Markets; target $590
Twitter (TWTR) initiated with a Sector Weight at KeyBanc Capital Markets
The Labor
Department reported on Tuesday the import-price index, measuring the cost of
goods ranging from Canadian oil to Chinese electronics, rose 0.9 percent m-o-m
in August, following a revised 1.2 percent m-o-m climb in July (originally a 0.7
percent m-o-m gain). Economists had expected prices to advance 0.5 percent
m-o-m last month.
According to
the report, the August advance was driven by рhigher prices for both fuel (+3.3
percent m-o-m) and nonfuel (+0.7 percent m-o-m) imports.
Over the
12-month period ended in August, import prices decreased 1.4 percent, due to a
tumble in fuel prices (-22.2 percent), which was partly offset by a gain in
nonfuel prices (+0.8 percent).
Meanwhile, the
price index for U.S. exports went up 0.5 percent m-o-m in August, following a
revised 0.9 percent m-o-m advance in the previous month (originally an 0.8 percent
m-o-m rise).
In August,
rising nonagricultural prices (+0.8 percent m-o-m) more than offset declining
agricultural prices (-2.2 percent m-o-m).
Over the past
12 months, the price index for exports fell 2.8 percent, reflecting declines in
prices of both agricultural (-2.9 percent) and nonagricultural (-2.8 percent)
exports.
FXStreet notes that there appears no easy quick way out to resolve the latest gridlock in UK-EU trade negotiations. Meanwhile, after heavy selling last week, the pound has rebounded this week but the outlook remains grim for the sterling. A deal is only probable very late in the day now and hence any short-term GBP bounce will not last with potential big GBP declines still to come, according to MUFG Bank.
“The UK government argues that the Internal Market Bill will act only as a ‘safety net’ but is viewed in Brussels as directly reintroducing the primary risk that both sides negotiated to avoid – the risk of a ‘hard border’ on the island of Ireland.”
“Understandably the EU sees the Internal Market Bill as a direct breach of the Northern Ireland protocol which was designed to prevent a hard border on the island of Ireland at the cost of creating a customs border in the Irish Sea. The EU has given the UK government until the end of this month to amend the bill and threatened legal action. The EU could refer a breach of the Withdrawal Agreement to a tribunal and ultimately the European Court of Justice either of which could end in fines.”
“A WTO trading relationship with the EU is not at all priced and in that context, GBP/USD falling to around the 1.2000-level is a realistic prospect if market participants see further reason to credibly expect no deal to happen.”
“We don’t expect any policy change from the BoE this week but the need to cut rates and/or expand QE is growing. We expect that in February 2021 but we shouldn’t rule it out by November. If we continue to head toward no EU-UK trade deal, BoE action will be inevitable. All of these factors will be key for GBP direction over the short-term and for now mainly point to further GBP downside ahead.”
Time | Country | Event | Period | Previous value | Forecast | Actual |
---|---|---|---|---|---|---|
06:00 | United Kingdom | Average earnings ex bonuses, 3 m/y | July | -0.2% | -0.2% | 0.2% |
06:00 | United Kingdom | Average Earnings, 3m/y | July | -1.2% | -1.3% | -1% |
06:00 | United Kingdom | ILO Unemployment Rate | July | 3.9% | 4.1% | 4.1% |
06:00 | United Kingdom | Claimant count | August | 94.4 | 100 | 73.7 |
06:30 | Switzerland | Producer & Import Prices, y/y | August | -3.3% | -3.5% | |
06:45 | France | CPI, y/y | August | 0.8% | 0.2% | 0.2% |
06:45 | France | CPI, m/m | August | 0.4% | -0.1% | -0.1% |
08:00 | France | IEA Oil Market Report | ||||
09:00 | Eurozone | ZEW Economic Sentiment | September | 64.0 | 73.9 | |
09:00 | Germany | ZEW Survey - Economic Sentiment | September | 71.5 | 69.8 | 77.4 |
Safe-haven USD and JPY fell against their major rivals in the European session on Tuesday as upbeat economic data out of China and Europe boosted demand for riskier assets.
USD traded lower against JPY. EUR traded mixed with declines versus GBP, AUD, NZD, CNY, and gains versus USD, JPY.
The National Bureau of Statistics (ONS) reported China’s industrial production rose 5.6 percent in August from 4.8 percent in July compared to economists' estimate of +5.1 percent, while its retail sales increased +0.5 percent in contrast to a 1.1 percent decline in July and compared to economists' forecast of +0.1 percent.
Meanwhile, Germany's latest ZEW survey showed that economic confidence strengthened unexpectedly in September. The ZEW Indicator of Economic Sentiment for Germany rose by 5.9 points from the previous month to 77.4 in September, the highest since May 2000, signaling expectations of a noticeable recovery of Europe's largest economy. That was well above economists’ forecast of 69.8. Meanwhile, the current conditions index increased to -66.2 from -81.3 in August. Economists had expected the reading to come in at -72.0.
Investors’ focus is shifting to the upcoming monetary policy meetings of the U.S. Federal Reserve, Bank of Japan (BoJ) and Bank of England (BoE), the outcomes of which will be released later this week.
FXStreet notes that over the past few weeks, US equity markets have experienced the first meaningful correction since this new bull market began in March. The S&P 500 is down about 7% from its recent all-time high, while the NASDAQ 100 is down about 11%. Gridlock on the next US stimulus package – combined with election year uncertainty – suggests there could be more downside in September and October, according to Mike Wilson from Morgan Stanley.
“We think this correction is just that, a correction in a new bull market. It's normal for markets to pullback after such an incredible run like we've experienced since March. Furthermore, when a new bull market coincides with a new economic cycle, the bull market usually runs for years, not months.”
“On the correction, there's still downside as markets digest the risk of congressional gridlock on the next fiscal deal. While we think something will ultimately get done, it will likely take another few weeks to get it over the goal line, which should keep markets nervous in the short term. Importantly, once the deal passes, the risk will shift to higher long-term interest rates, which have been a major support to the rally so far, and the preference for large cap growth stocks.”
“It's an election year and historically, US equity markets have traded poorly in the months of September and October. Specifically, these months have been down about twice as often as they've been up, and the moves have been significant in many cases. With this year's election looking close, we expect uncertainty to remain high.”
Iris Pang, ING's Chief Economist, Greater China, suggests that domestic demand is driving China's economic growth but external circulation may remain a challenge to growth.
"Since the introduction of cross-provincial travel within China, we have seen retail sales recovering strongly to 0.5%YoY growth in August from -1.1%YoY a month ago. Spending on cosmetics and jewellery rose 19.0%YoY and 15.3%YoY, respectively in August. The tourism business has also brought back jobs in the service sector. The spending power of the population has improved. The favourite spending item, telecommunication products, experienced a jump in sales of 25.1%YoY."
"China’s new-infra plan and traditional infrastructure projects in transportation have led overall investment spending. Fixed asset investment (FAI) shrank only -0.3%YoY YTD in August from -1.6%YoY YTD in July. The "computer, telecommunication" category, which represents new-infra investment plans, grew 11.7%YoY YTD, which results in part from China’s push towards self-reliance in technology. Rail transportation investment also grew 6.4%YoY YTD."
"Industrial production growth also picked up to 5.6%YoY in August from 4.8%YoY in July. This was brought about by improvements in production across a broader range of categories than in previous months."
"We can see that domestic demand has brought back growth, mainly in retail sales and infrastructure projects, which have in turn led to growth in industrial production. This growth has brought some jobs back to the market. This is indeed the internal growth circulation that China is promoting."
"But the dual circulation, that is, both domestic and external growth, is yet to be seen as Covid-19 cases seem to be rebounding in some places outside China, and there is more political tension too, weighing on external demand."
"Our forecasts for China's GDP is currently at 0.7%YoY for the whole of 2020, which we are not changing now. We will probably not do so unless there are big improvements or deteriorations in external circulation that would change economic growth materially."
FXStreet notes that the announcement of Suga as Japan’s new PM is not worrying investors but there are a number of other factors that could persuade investors to dive back into the safe-haven JPY in the coming months. All in all, economists at Rabobank forecast the USD/JPY pair at 106 on a three-month horizon.
"Given that a change in PM hasn’t rocked markets it is unlikely that the JPY will take much lead from this week’s BoJ policy meeting.”
“On the view that the changes in Japanese domestic politics are unlikely to become a prime focus for the JPY, we expect USD/JPY to hold close to the 106 area on a three-month view.”
FXStreet reports that economists at UBS advise to hold their nerve on UK assets despite the heightened concerns over the final stages of the Brexit process.
“We are positive on the medium-term outlook for sterling, both against the US dollar and against the euro. By September of next year we expect sterling to rise to USD 1.40, against 1.29 at present.”
“We also like the UK equity market. A positive outcome to talks would also remove a major impediment to the UK equity market, which has lagged global stocks. We expect earnings growth to fall substantially this year, but by next year we anticipate a robust rebound driven by an economic bounce-back and a recovery in the oil price. The UK market has a high exposure to cyclical value sectors such as energy and basic materials, which could benefit from a global recovery.”
CNBC reports that the next big shock to the oil industry could be yet another hit to demand, analysts said.
That would add to the destruction already seen this year as measures taken to combat the pandemic prevented people from commuting and traveling – drastically reducing oil usage.
“A lot of us, we’re talking about another demand shock. It’s like fighting the last battle,” said Ed Morse, managing director and global head of commodities research at Citi.
He warned that oil producing countries could experience a big setback.
Earlier this year, the May contract for U.S. benchmark dived deep into negative territory for the first time in its history.
“I think it is still all about the demand, the demand destruction this year has been extraordinary,” Martin Fraenkel, president of S&P Global Platts, which projected that the contraction in global oil demand will be 8 million barrels a day by the end of this year.
“By the end of 2021, oil demand will still be below where the world was in 2019,” Fraenkel added
OPEC+ has a “delicate maneuvering act” if demand does not bounce back, Fraenkel added, referring to the Organization of the Petroleum Exporting Countries (OPEC) and its allies.
In July, OPEC+ put in place historic supply curbs of 10 million barrels a day, but agreed to ease them to 7.7 million barrels a day from August.
According to the report from ZEW, the Indicator of Economic Sentiment for Germany increased again in the current September 2020 survey, climbing 5.9 points to a new reading of 77.4 points compared to the previous month. Economists had expected a decrease to 69.8. The assessment of the economic situation in Germany also improved, and currently stands at minus 66.2 points, 15.1 points higher than in August. With the increase of both the ZEW Indicator of Economic Sentiment and the assessment of the economic situation, the overall outlook has improved significantly compared to the previous month.
“The ZEW Indicator of Economic Sentiment has increased again, signalling that the experts continue to expect a noticeable recovery of the German economy. Stalled Brexit talks and rising COVID-19 cases could not dampen the positive mood. However, the still negative outlook for the banking sector reveals fears of a rising number of loan defaults in the coming six months,” comments ZEW President Professor Achim Wambach.
The financial market experts’ sentiment concerning the economic development of the eurozone increased by 9.9 points, bringing the indicator to a current level of 73.9 points for September. The indicator for the current economic situation in the eurozone climbed 8.9 points to a level of minus 80.9 points. The outlook for the eurozone has thus also improved noticeably, albeit to a lesser extent than for Germany.
Reuters reports that the International Energy Agency (IEA) trimmed its 2020 oil demand forecast, citing caution about the pace of economic recovery from the pandemic.
IEA cut its 2020 outlook by 200,000 barrels per day (bpd) to 91.7 million bpd in its second downgrade in as many months.
"We expect the recovery in oil demand to decelerate markedly in the second half of 2020, with most of the easy gains already achieved," the IEA said in its monthly report.
Renewed rises in COVID-19 cases in many countries and related lockdown measures, continued remote working and a still weak aviation sector are all hurting demand, the IEA said.
Increasing oil output and the downgraded demand outlook also mean a slower draw on crude oil stocks which piled up at the height of lockdown measures, it added.
eFXdata reports that Bank of America Global Research discusses its recent long USD/CAD.
"With the September Bank of Canada meeting behind us, we favor positioning long for a tradable rally into September. More broadly, we see this occurring in the context of potentially higher market volatility, softer oil and a rising USD...CAD has recovered from March weakness on the back of surging global risk appetite and higher oil, which softened Canada’s terms-of-trade shock".
"USD/CAD calendar seasonals are bullish. Over the last 10 years, USD/CAD has been higher 9 out of 10 times over the next 60 trading days. This is also consistent with broader bullish USD seasonals".
CNBC reports that Asian Development Bank said that developing Asia, which includes countries like China, India, Indonesia and Singapore, will contract this year for the first time in about six decades as the coronavirus pandemic continues to hammer economies worldwide.
In its updated outlook report, ADB said GDP in developing Asia will contract 0.7% this year. The bank also said three-fourths of the region’s economies are set to shrink in 2020, downgrading its GDP forecasts for those countries.
The pandemic slowed domestic consumption, affected external demand and hit exports, Yasuyuki Sawada, ADB’s chief economist, said.
“On top of this, travel bans really undermine free flow of people as well as goods and services trade,” he said.
Growth will likely rebound in 2021 with developing Asia expected to register a 6.8% expansion. India is set to grow 8% for the next calendar year, according to the report.
Bank in its report warned that a prolonged wave of Covid-19 infections could stifle recovery and further disrupt demand and supply while worsening geopolitical tensions, notably among U.S. and China, remain a risk.
Protracted weakness could trigger crises in some economies, the ADB said.
FXStreet reports that USD/CNH keeps the negative outlook unaltered and could drop to the 6.7660 level in the next weeks.
Next 1-3 weeks: “Yesterday (14 Sep, spot at 6.8300), we highlighted that ‘as long as 6.8550 (‘strong resistance’ level previously at 6.8800) is intact, there is still a slim chance that USD could push lower towards the support at 6.8000’. However, the speed of the subsequent decline was not exactly expected as USD plummeted to 6.8057 before cracking 6.8000 just a while ago. The sudden surge in momentum indicates that the negative phase that started in mid-August has received a new lease of life. From here, the next level to focus on is at 6.7660 followed closely by 6.7500. Overall, the current negative phase is deemed as intact as long as 6.8300 is not taken out (‘strong resistance’ level was at 6.8550 yesterday).”
Time | Country | Event | Period | Previous value | Forecast | Actual |
---|---|---|---|---|---|---|
01:30 | Australia | House Price Index (QoQ) | Quarter II | 1.6% | -1% | -1.8% |
01:30 | Australia | RBA Meeting's Minutes | ||||
02:00 | China | Retail Sales y/y | August | -1.1% | 0% | 0.5% |
02:00 | China | Industrial Production y/y | August | 4.8% | 5.1% | 5.6% |
02:00 | China | Fixed Asset Investment | August | -1.6% | -0.4% | -0.3% |
06:00 | United Kingdom | Average earnings ex bonuses, 3 m/y | July | -0.2% | -0.2% | 0.2% |
06:00 | United Kingdom | Average Earnings, 3m/y | July | -1.2% | -1.3% | -1% |
06:00 | United Kingdom | ILO Unemployment Rate | July | 3.9% | 4.1% | 4.1% |
06:00 | United Kingdom | Claimant count | August | 94.4 | 100 | 73.7 |
06:30 | Switzerland | Producer & Import Prices, y/y | August | -3.3% | -3.5% | |
06:45 | France | CPI, y/y | August | 0.8% | 0.2% | 0.2% |
06:45 | France | CPI, m/m | August | 0.4% | -0.1% | -0.1% |
During today's Asian session, the US dollar declined against the euro, yen and other world currencies in anticipation of the Federal reserve meeting.
The Federal reserve is holding its first meeting on September 15-16 since approving the new long-term strategy at the end of August. Experts believe that the Fed will maintain a "dovish" mood at the upcoming meeting, as the US economy, recovering from the crisis caused by the coronavirus pandemic, still needs support.
Economists expect that the new strategy of the Federal reserve, which provides for a more lenient approach to monetary policy, will be reflected in concrete measures to support the economy, given that the prospects for approval by the US authorities of the next portion of budget incentives are becoming more doubtful.
The ICE index, which tracks the dynamics of the US dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), fell by 0.15%.
Growing hopes for the imminent appearance of a COVID-19 vaccine reduce the attractiveness of the dollar as a "safe haven" asset, experts say. Despite the sharp decline in economic activity in the world due to quarantine measures, the appearance of the vaccine will give a boost to the growth of the global economy.
According to the report from INSEE, in August 2020, the Consumer Price Index (CPI) edged down by 0.1% over a month, after +0.4% in July 2020. Manufactured product prices dropped sharply (−1.2%, after a stability in July). Those of energy (+0.3% after +1.0%) and services (+0.3% after +0.9%) slowed down and those of tobacco were stable after a 0.1% increase in July. Finally, food prices rebounded slightly (+0.2% after a 0.9% drop in the previous month).
Seasonally adjusted, consumer prices fell back by 0.5%, after +0.7% in the previous month.
Year on year, consumer prices slowed down to 0.2%, after +0.8% in the previous month. This drop in inflation resulted from a downturn in manufactured products, linked to the postponed summer sales, and a slowdown in food prices. Contrariwise, energy prices fell less year on year than in July. Finally, the prices of services and tobacco rose, year on year, as the same rate as in the previous month.
Year on year, core inflation dropped, in August, to +0.5% after +1.4% in the previous month. The Harmonised Index of Consumer Prices (HICP) edged down by 0.1% over a month, after +0.4% in the previous month; year on year, it slowed down to +0.2%, after +0.9% in July.
According to the report from Federal Statistical Office, the Producer and Import Price Index fell in August 2020 by 0.4% compared with the previous month, reaching 97.9 points (December 2015 = 100). This decline was due in particular to lower prices for chemical and pharmaceutical products. Compared with August 2019, the price level of the whole range of domestic and imported products fell by 3.5%.
In particular, lower prices for pharmaceutical preparations were responsible for the decrease in the producer price index compared with the previous month. Basic chemicals and petroleum products also became cheaper. In contrast, rising prices were observed for paints, varnishes and similar coatings, printing ink and mastics as well as for raw milk.
The import price index registered lower prices compared with July 2020, particularly for organic products of the chemical industry. Plastics in primary forms, petroleum and natural gas, petroleum products and other chemical products also showed falling prices. Non-ferrous metals and products made therefrom, basic iron, steel, plastic products and computers, on the other hand, became more expensive.
According to the report from Office for National Statistics (ONS), early indicators for August 2020 suggest that the number of employees in the UK on payrolls was down around 695,000 compared with March 2020.
Figures for May to July 2020 show an increase in the unemployment rate; despite this increase and an increase in the number of redundancies, the employment rate was up and the economic inactivity rate has fallen. The estimated UK unemployment rate for all people was 4.1%; this is 0.3 percentage points higher than a year earlier and 0.2 percentage points higher than the previous quarter. Looking in more detail at unemployment by age, the estimated number of people unemployed aged 16 to 24 years increased by 76,000 on the year to 563,000. Other age groups saw falls or very little change over the year.
The number of people who are estimated to be temporarily away from work (including furloughed workers) has fallen, but it was still more than 5 million in July 2020, with over 2.5 million of these being away for three months or more. There were also around 250,000 people away from work because of the pandemic and receiving no pay in July 2020.
Vacancies continued to show increases in the latest period, driven by the smaller businesses, some of which are reporting taking on additional staff to meet coronavirus (COVID-19) guidelines.
The Claimant Count reached 2.7 million in August 2020, an increase of 120.8% since March 2020.
The rate of decline in employee pay growth slowed in July following strong falls in the previous three months. For the sectors of wholesaling, retailing, hotels and restaurants and construction, where the highest percentage of employees returned to work from furlough, there was a slight improvement in pay growth for July 2020. In May to July 2020, the rate of annual pay growth stood at negative 1.0% for total pay but positive 0.2% for regular pay. The difference between the two measures is because of subdued bonuses, which fell by an average negative 21.4% (in nominal terms) in the three months from May to July 2020.
EUR/USD
Resistance levels (open interest**, contracts)
$1.2014 (918)
$1.1984 (3803)
$1.1959 (2423)
Price at time of writing this review: $1.1896
Support levels (open interest**, contracts):
$1.1825 (472)
$1.1805 (900)
$1.1780 (1240)
Comments:
- Overall open interest on the CALL options and PUT options with the expiration date September, 4 is 62510 contracts (according to data from September, 14) with the maximum number of contracts with strike price $1,1700 (4422);
GBP/USD
Resistance levels (open interest**, contracts)
$1.3094 (258)
$1.3065 (650)
$1.3039 (186)
Price at time of writing this review: $1.2862
Support levels (open interest**, contracts):
$1.2786 (623)
$1.2768 (710)
$1.2747 (850)
Comments:
- Overall open interest on the CALL options with the expiration date September, 4 is 13582 contracts, with the maximum number of contracts with strike price $1,3600 (1189);
- Overall open interest on the PUT options with the expiration date September, 4 is 15338 contracts, with the maximum number of contracts with strike price $1,3150 (2619);
- The ratio of PUT/CALL was 1.13 versus 1.11 from the previous trading day according to data from September, 14
* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.
** - Open interest takes into account the total number of option contracts that are open at the moment.
Raw materials | Closed | Change, % |
---|---|---|
Brent | 39.32 | -0.71 |
Silver | 27.1 | 1.57 |
Gold | 1956.287 | 0.86 |
Palladium | 2309.92 | 0.09 |
Index | Change, points | Closed | Change, % |
---|---|---|---|
NIKKEI 225 | 152.81 | 23559.3 | 0.65 |
Hang Seng | 136.97 | 24640.28 | 0.56 |
KOSPI | 31.22 | 2427.91 | 1.3 |
ASX 200 | 40.1 | 5899.5 | 0.68 |
FTSE 100 | -5.84 | 6026.25 | -0.1 |
DAX | -9.18 | 13193.66 | -0.07 |
CAC 40 | 17.74 | 5051.88 | 0.35 |
Dow Jones | 327.69 | 27993.33 | 1.18 |
S&P 500 | 42.57 | 3383.54 | 1.27 |
NASDAQ Composite | 203.1 | 11056.65 | 1.87 |
Time | Country | Event | Period | Previous value | Forecast |
---|---|---|---|---|---|
01:30 | Australia | House Price Index (QoQ) | Quarter II | 1.6% | -1% |
01:30 | Australia | RBA Meeting's Minutes | |||
02:00 | China | Retail Sales y/y | August | -1.1% | 0.1% |
02:00 | China | Industrial Production y/y | August | 4.8% | 5.1% |
02:00 | China | Fixed Asset Investment | August | -1.6% | -0.4% |
06:00 | United Kingdom | Average earnings ex bonuses, 3 m/y | July | -0.2% | -0.2% |
06:00 | United Kingdom | Average Earnings, 3m/y | July | -1.2% | -1.3% |
06:00 | United Kingdom | ILO Unemployment Rate | July | 3.9% | 4.1% |
06:00 | United Kingdom | Claimant count | August | 94.4 | |
06:30 | Switzerland | Producer & Import Prices, y/y | August | -3.3% | |
06:45 | France | CPI, y/y | August | 0.8% | 0.2% |
06:45 | France | CPI, m/m | August | 0.4% | -0.1% |
08:00 | France | IEA Oil Market Report | |||
09:00 | Eurozone | ZEW Economic Sentiment | September | 64.0 | |
09:00 | Germany | ZEW Survey - Economic Sentiment | September | 71.5 | 69.8 |
12:30 | Canada | Manufacturing Shipments (MoM) | July | 20.7% | 8.7% |
12:30 | U.S. | NY Fed Empire State manufacturing index | September | 3.7 | 5.95 |
12:30 | U.S. | Import Price Index | August | 0.7% | 0.5% |
13:15 | U.S. | Capacity Utilization | August | 70.6% | 71.5% |
13:15 | U.S. | Industrial Production (MoM) | August | 3% | 1% |
13:15 | U.S. | Industrial Production YoY | August | -8.2% | |
22:45 | New Zealand | Current Account | Quarter II | 1.56 | 0.595 |
23:50 | Japan | Trade Balance Total, bln | August | 11.6 | -37.5 |
Pare | Closed | Change, % |
---|---|---|
AUDUSD | 0.72893 | 0.12 |
EURJPY | 125.414 | -0.21 |
EURUSD | 1.18647 | 0.19 |
GBPJPY | 135.774 | -0.02 |
GBPUSD | 1.2846 | 0.4 |
NZDUSD | 0.66991 | 0.53 |
USDCAD | 1.31739 | -0.06 |
USDCHF | 0.90781 | -0.11 |
USDJPY | 105.69 | -0.41 |
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