|

Key economic events ahead - TDS

In their morning note, analysts at TDS offer the details on the key economic events due on the cards for the day ahead.

Key Quotes:

GBP The UK government heads for a repeat of last Tuesday's political showdown, as two amendments to parliament's "meaningful vote" on the final Brexit deal are voted on in the House of Commons. The "Grieve amendment" gives parliament some say in directing Brexit negotiations if it rejects the final deal later this year (perhaps ensuring a softer Brexit), while the government's watered-down amendment only gives an opportunity for parliament to "acknowledge" the situation, with no say in the negotiations (thus Brexit can be whatever the government decides). Last week's vote on the Grieve amendment looked like it was going to pass, but promises by the Prime Minister of a compromise at the last minute held the Tory "rebels" back. The promised compromise did not materialize, however, and the government is taking a gamble that its softer version will have bought enough rebel support to pass. This is likely the case, meaning the Grieve amendment will be defeated.

EUR The ECB's Sintra conference continues, with the key panel coming up this afternoon beginning at 2:30pm BST with Draghi, Powell, Kuroda, and Lowe.

USD Chairman Powell will participate in a 9:30 ET panel discussion on monetary policy with Draghi, Kuroda, and Lowe at the ECB's Sintra Conference. Looking to the data, the market expects the Q1 current account deficit to narrow to $128.2bn while existing home sales for May are expected to rise 1.1% to an annualized 5.52m units.

BRL We expect the BCB to remain on hold, but sound a more hawkish tone against a strained BRL. We foresee that for the time being, and at current levels of BRL, the BCB will prefer to address FX weakness with its swap program rather than with interest rates, given lack of external deficit or funding issues, and the very large output gap in the face of repressed inflation. Brazil's issues are more due to domestic factors (see: Brazil's Fiscal Risk Premium On the Rise ), rather than the external environment, which suggests caution on a rate hiking cycle for the BCB, contrary to what the DI market has priced.”

Author

Dhwani Mehta

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

More from Dhwani Mehta
Share:

Editor's Picks

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks
Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.
Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.

Key economic events ahead - TDS