During the week, government bonds rose strongly as weak economic data from Germany and China renewed investor concerns about global economic growth. The only relief from market stress came from the commercial front in which the Trump administration declared that it will delay the 10% tariff on some Chinese imports until the end of the year. Similarly, the appreciation of safe-haven currencies and the rally in gold prices indicated a risk-off mood in financial markets.

Market expectations that the ECB will aggressively relax its monetary policy at the September meeting rose during the week. Germany’s flash GDP shrank in the second quarter, in line with expectations (-0.1% q/q, consensus -0.1% q/q, previous quarter 0.4% q/q). Moreover, the President of the Central Bank of Finland and member of the Board of Governors of the ECB, Olli Rehn, called on Thursday for a strong and significant stimulus programme at the next ECB meeting. In an interview with the Wall Street Journal added that it was preferable for the ECB to exceed market expectations in its new measures.

Today, the preliminary estimate of the University of Michigan's consumer sentiment for the US was published. It fell to 92.1 in August (98.4 in the previous month, consensus of 97.2).

Sovereign bond yields resumed their downward trend throughout the week. The 30Y U.S. Treasury yield and the 10Y German bond yield hit record lows. The 10-2Y yield curve is inverted in the U.S., mounting concerns over a global slowdown. Furthermore, the spread between 2-10Y UK Gilts yields dropped below zero for the first time since the financial crisis.

In FX, the DXY index strengthened amid mounting fears. In EM, ARS depreciated sharply after President Macri’s was defeated in primary polls. Gold benefited from the safe-haven bid, rising throughout the week. Stocks were very volatile during the week amid concerns about the possibility of a global recession and news about the trade war

 

Download The Full Market Comment

En ningún caso BBVA será responsable de las pérdidas, daños o perjuicios de cualquier tipo que surjan por acceder y usar el website, incluyéndose, pero no limitándose, a los producidos en los sistemas informáticos o los provocados por la introducción de virus y/o ataques informáticos. BBVA tampoco será responsable de los daños que pudieran sufrir los usuarios por un uso inadecuado de este website y, en modo alguno, de las caídas, interrupciones, ausencia o defecto en las telecomunicaciones.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD holds above 1.10 post-hawkish Fed cut

EUR/USD manages to hold above the1.10 after the Fed cut rates but signaled no further rate reductions. The bank acknowledged the strong labor market and robust consumption. However, it is worried about investment.

EUR/USD News

GBP/USD remains below 100-day SMA on "Super Thursday"

With the mixed Brexit headlines and the US Dollar pullback playing contrasting tunes, the GBP/USD pair remains under 100-day SMA while heading into the London open. All eyes on UK Retail Sales, BOE decision.

GBP/USD News

USD/JPY keeps losses below 108.00 as BOJ disappoints the doves

USD/JPY keeps the losses below 108.00, as the Japanese Yen remains on the front foot in reaction to the Bank of Japan's (BOJ) status-quo that came in as a disappointment for the doves. 

USD/JPY News

Bitcoin dives below $10,000

Bitcoin has lost its cool towards the end of the Asian session on Thursday. After managing to defend $10,000 over the last few days, the granddaddy of cryptos has plunged below several other support areas including $9,900 and $9,800. 

Read more

Gold: Indecisive market, focus on today's close

Gold is currently trading at $1,480 per Oz, representing 0.21% drop on the day. On Wednesday, the yellow metal witnessed two-way business before ending the day with moderate losses at $1,494.

Gold News

Forex Majors

Cryptocurrencies

Signatures