Global central banks stayed in their anticipated lanes last week as the Fed and ECB raised their key lending rates. The BoJ has admitted it is allowing its yield curve to increase, meaning the Japan government is cutting back on purchases of Japanese bonds. Forex produced anxiety and choppy results for day traders.
Economic data from the U.S last week provided a strong Gross Domestic Product result on Thursday, and followed with weaker than expected Personal Consumption Expenditures and Personal Income statistics before going into the weekend. Meaning the U.S economy appears to be surprisingly solid, while inflation pressures do indicate they are in decline. The Forex market turned volatile on Thursday and Friday, gold which traded at nearly 1980.00 USD on Thursday went into the weekend near 1959.00.
Stock markets in the U.S via the major indices continue to incrementally rise and folks waiting for a big sustained selloff are having their patience tested. Perceived volatility in U.S markets is very low and the VIX (Volatility Index) indicates many investors are not taking the time to hedge with options because their confidence is remarkably high. A cautious reminder for traders, one bad day could change all of the optimistic sentiment.
In the cryptocurrency world, folks should continue to keep their eyes on the Binance exchange and its Binance coin. Many digital assets seem to be suspiciously close to important support levels as this week begins and appear vulnerable.
Monday, 31st of July, China Manufacturing PMI - while U.S data surprisingly improves, China has not begun to show signs of a positive turnaround quite yet, and this reading is expected to be below last month's outcome. China data is a solid barometer of global economic health and traders should give these results proper attention.
Monday, 31st of July, E.U Consumer Price Index Flash Estimates - the European CPI numbers are expected to come in slightly below the previous month's reading. If for some reason these inflation numbers are higher than expected, this could cause some chaos briefly for the EUR/USD. A weaker number however offers no sound wagering basis for short-term day traders either. Behavioral sentiment appears to be ruling the EUR/USD landscape for the time being, and technical levels should be watched.
Tuesday, 1st of August, Australia Reserve Bank Cash Rate - the RBA is expected to follow in the footsteps of the Fed and ECB and raise its lending rate by 0.25%.
Tuesday, 1st of August, E.U Manufacturing PMI - Germany and France are anticipated to produce similar results to last month's outcomes. Recessionary pressures are a concern in the E.U and better than expected numbers would be welcomed, but this may prove difficult to demonstrate as economic conditions remain challenging.
Tuesday, 1st of August, U.S ISM Manufacturing PMI - the results from the manufacturing sector in the States should be watched. A slight improvement is expected, but the reading is not expected to produce a wildly optimistic result. An outcome which slightly beats expectations, but is not too strong might make the USD slightly weaker. Global investment institutions are likely hoping for any signs that the Federal Reserve will have to become less aggressive. A lackluster to 'fair' ISM Manufacturing PMI result could be evidence larger Forex traders want to see if they are aiming for bearish momentum in the USD.
Wednesday, 2nd of August, New Zealand Employment Change - the jobs statistics are expected to show slightly weaker results from the nation. The NZD/USD remains within the lower elements of its long-term price range. There are many NZD/USD bullish traders waiting for a sustained reversal higher, but it is unlikely to be produced from these New Zealand jobs numbers.
Thursday, 3rd of August, U.K BoE Monetary Policy Summary and Official Bank Rate - the Bank of England remains in a difficult spot and it will likely raise interest rates by another 0.25%. Criticism of the Bank of England has been loud in Britain, but the BoE likely feels it has to remain in line with the Fed and ECB. Recessionary pressures continue in the U.K and inflation remains problematic. Concerns will be heard regarding property mortgages for home owners if the BoE hikes. The GBP/USD will certainly move depending on the rhetoric from the Monetary Policy Summary and talking points delivered by BoE Governor Andrew Bailey.
Friday, 4th of August, U.S Non-Farm Employment Change and Average Hourly Earnings - the jobs data parade will climax at the end of the week, this after starting on Wednesday via the ADP jobs numbers. Investors will watch the Non-Farm Employment Change data carefully and correlate them to the better than expected GDP results from the 27th of July. The wages data from the Average Hourly Earnings is expected to come in with a slight decrease. A weaker inflation result from the wages statistics could cause additional softness in the USD. However, recent data from the U.S has been hard to predict correctly, and day traders may want to sit on the sidelines until all the jobs numbers are digested.
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