GBP. Sterling traded flat against USD yesterday, and pared back its recent losses to the euro………
Ranko Berich Responsable de Análisis de Mercados en Monex Europe
The day’s two data releases both beat expectations, with mortgage lender Nationwide’s House Price Index rising 0.3% in July and the Markit Manufacturing Purchasing Managers’ Index rising from last month’s level against expectations. New export orders almost reached a record high for the survey, boosting optimism about the future in the sector while job creation and output levels also increased. The British Retail Consortium’s Shop Price Index was released earlier this morning, and fell 0.4% year on year, suggesting that inflationary pressure had subsided for now in the surveyed member stores. Today at 09:30 BST Construction PMIs will be released.
EUR. The euro saw its recent gains versus USD decay slightly over the course of yesterday’s session, but has opened this morning on a firmer note. Manufacturing Purchasing Managers Indices for various eurozone economies were released, and ranged from 54.0 in Spain to 58.1 in Germany, all well above the 50 level that indicates overall reported growth. The Flash reading of eurozone Gross Domestic Product growth for the second quarter showed the economy growing 0.6%, as expected. At 10:00 BST the Producer Price Index will be released.
USD. The greenback showed tentative signs of strength overnight against several emerging market currencies, as well as the Kiwi dollar, but remains on the back foot against the euro and sterling. Yesterday’s much awaited release of the Personal Consumption Expenditures Price Index turned out to be something of a non-event. The inflation measure, which is preferred by the Federal Reserve over other comparable indices, rose 1.4% year on year, down from 1.5% in May. The Core index, which excludes food and fuel, rose 1.5%. All in all the data contained insufficient evidence of reflation to move USD significantly. Later in the afternoon Manufacturing Purchasing Managers Indices were released by Markit and ISM, both showing the sector growing at a steady rate. Interestingly, the ISM Manufacturing Prices Index increased substantially. Today at 13:15 BST ADP’s estimate of monthly Non-Farm Payroll growth will be released.
CAD. The loonie continued to sell off yesterday, as crude oil prices reversed the initially optimistic tone of trading seen at the start of the week. Second quarter earnings reports from several shale drillers revealed optimism in the sector that output would expand further in the sector this year, a bearish development for crude and the loonie. Industry inventory data, in the meantime, suggested an increase in stockpiles last week. Market Manufacturing PMI rose to 55.5 in yesterday’s release, up from 54.7 in July, but this did little to change the downwards trajectory of the loonie. Today at 15:30 BST, official North American crude inventory data will be released by the US Energy Information Administration.