Market movers today

  • Today, we have a light calendar where we mainly look out for the final euro area inflation figures at 11:00 CEST. The flash estimates showed overall HICP inflation at 1.1% y/y and core inflation at 0.9% y/y in July and we expect no revision of the data.

  • Markets will continue to carefully watch tweets and communication from the US and China and, most recently, following Donald Trump's upbeat tweet this weekend. 

  • Later this week, we have the important US manufacturing PMI, which we expect to tick below 50 (however, we note upside risks from strong regional PMIs last week). We also have minutes from both the Fed and ECB meetings in July and the Jackson Hole Conference (Powell speaks on Friday). We also get euro area PMIs.

  • In the Nordic area, Swedish unemployment figures and the Norwegian investment survey are the most important itemsthis week.

  • The ECB is widely expected to announce a tiering system while cutting rates at the next meeting in September. We have taken a closer look, see ECB: Mitigating side effects - gauging the tiering premium , 16 August.

 

Selected market news

Risk appetite has improved this morning. Many Asian stock indices, the US S&P500 futures, oil and US 10-year Treasury yield are all up. Yesterday, US President Trump tweeted that "We are doing very well with China, and talking ". It seems like investors have to accept that Trump is going intervene in the trade war by tweeting from time to time. Apparently, more US-China teleconferences are planned over the next two weeks. Still, we are having a hard time seeing a trade deal on this side of the presidential elections.

In Germany, Finance Minister Ola Scholz hinted at a EUR50bn (~1.5% of German nominal GDP) fiscal spending package in case of recession, although it is not imminent, see Bloomberg . The German government is under heavy pressure by many to ease fiscal policy, as the German economy is struggling (contracted in Q2) and there is a lack of safe assets (bonds) in the market. See also Harr's view: Why Germany should ease fiscal policy , 18 August. Unfortunately, the fact that Scholz says a package is not imminent also highlights the time lag problem with fiscal policy: It takes time for politicians to recognise the need for fiscal easing and vote in favour of a specific package, and hence when it has an impact on real activity.

The Iranian supertanker that was detained last month, has left Gibraltar waters despite the US's objections.

Ahead of Boris Johnson's visit to Angela Merkel and Emmanuel Macron, a government report on the worst-case impact on the British economy in case of a no deal Brexit was leaked to the press yesterday. It is grim reading suggesting the UK is definitely not ready for a no deal Brexit, see BBC . While the government says that is why it is stepping up no deal preparations, it also highlights the risk of the new government's strategy.

 

Download The Full Daily FX Market Commentary

This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.

Recommended Content


Recommended Content

Editors’ Picks

AUD/USD recovers above 0.6750 after Australian jobs data

AUD/USD recovers above 0.6750 after Australian jobs data

AUD/USD picks up a late bid and recovers above 0.6750 in Asian trading on Thursday, following the release of mixed Australian employment data. The extended post-Fed US Dollar recovery, amid a cautious market mood, could limit the pair's upside ahead of US data. 

AUD/USD News
USD.JPY jumps toward 144.00 on the road to recovery

USD.JPY jumps toward 144.00 on the road to recovery

USD/JPY gains traction and approaches 144.00 in Thursday's Asian session. The uptick of the pair is bolstered by the impressive US Dollar recovery. Investors shift their attention to the US data and the Bank of Japan interest rate decision on Friday. 

USD/JPY News
Gold price stalls post-FOMC pullback from all-time peak; lacks firm intraday direction

Gold price stalls post-FOMC pullback from all-time peak; lacks firm intraday direction

Gold price oscillates in a range on Thursday and consolidates the previous day's post-FOMC rejection slide from the $2,600 mark or a fresh record high. Persistent geopolitical risks, along with signs of economic trouble in the US and China, lend support to the safe-haven metal.

Gold News
Ethereum attempts recovery following first rate cut in four years

Ethereum attempts recovery following first rate cut in four years

Ethereum is trading above $2,330 on Wednesday as the market is recovering following the Federal Reserve's decision to cut interest rates by 50 basis points. Meanwhile, Ethereum exchange-traded funds recorded $15.1 million in outflows.

Read more
Australian Unemployment Rate expected to hold steady at 4.2% in August

Australian Unemployment Rate expected to hold steady at 4.2% in August

The Australian Bureau of Statistics will release the monthly employment report at 1:30 GMT on Thursday. The country is expected to have added 25K new positions in August, while the Unemployment Rate is foreseen to remain steady at 4.2%.

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Majors

Cryptocurrencies

Signatures