Market Movers ahead
We expect no rate cut or QE in connection with next week's ECB meeting but all options are expected to be left open in a very dovish statement. More details about the ABS programme are also expected to be revealed.
We expect the US labour market report to show strong gains in employment in August, possibly fuelling expectations of an earlier rate hike from the Fed.
We expect Bank of Japan in a softer statement to acknowledge increasing downside risk from the consumption tax hike but any new easing measures are unlikely until late October.
In China the official manufacturing PMI is expected to have declined in August, albeit less dramatic than the HSBC manufacturing PMI.
In Sweden Riksbanken is expected to remain on hold and to keep its repo-rate forecast broadly unchanged, despite a possible downward revision of its GDP forecast.
Global macro and market themes
- Tug of war for risk appetite between expectations of QE from the ECB and geopolitical risks from the Ukrainian crisis.
- Rising debate on a possible early rate hike from Fed in the wake of strong US data and relatively hawkish minutes from the last Fed meeting.
- Continued declines in inflation and inflation expectations have increased expectations that ECB will eventually be forced to embark on aggressive QE.
- In Japan weak July data suggest that the negative impact from the consumption tax hike in April has been larger than expected. Further Bank of Japan easing is back on the agenda.
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Editors’ Picks
EUR/USD stays below 1.0800 after upbeat US data
EUR/USD stays under bearish pressure and trades slightly below 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold clings to strong daily gains above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.