All Eyes on Yellen

Wells Fargo Research Team Wells Fargo

U.S. Review

All Eyes on Yellen

In a highly anticipated speech this week, Fed Chair Yellen said that the economy is nearing the Fed’s goals.
New home sales jumped 12.4 percent in July. In contrast, existing home sales fell last month, and look to be restrained by low inventories and deteriorating affordability.
Durable goods orders rose 4.4 percent in July, supported by the strongest gain in core capital goods orders since January.
The second estimate of Q2 GDP reaffirmed growth was weak last quarter, rising only 1.1 percent.

Global Review

U.K. Growth As Expected; Argentina’s GDP Declines

Growth in the U.K. economy came in as expected, up 0.6 percent (quarter-over-quarter) in Q2 with strong personal consumption expenditures and investment numbers, up 0.9 percent and 1.4 percent respectively. Government expenditures, on the other hand, were down 0.2 percent while real exports of goods and services were also weak, increasing only 0.1 percent.
In Argentina, the economy recorded a negative growth rate in Q2 due in part to the removal of subsidies for utility consumption. The Argentine economy dropped 1.3 percent during the first half of the year compared to the same period a year earlier.

Download the full report

Author

Wells Fargo Research Team

Wells Fargo

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.