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China and U.S Data Early and Important as Central Banks Fret

by with No Comment Behavioral SentimentCentral BanksFeatured Highlights

China and U.S Data Early and Important as Central Banks Fret

Monday, 17th July 2023, China GDP and Industrial Production – the economic numbers coming from China have shown steady signs of a downturn. Gross Domestic Product figures however are expected to increase this month, but some analysts may question transparency issues regarding the reported statistics. Industrial Production numbers are expected to fall, which on the surface may cause people to question any positive results from the GDP. Retail Sales will also be published on Monday. The housing market in China remains critically important in the nation and some borrowers appear to be suffering financial stress. While many global retail traders might not be invested in China, the nation serves as a good barometer for the world’s economy, particularly regarding consumer demand.

Monday, 17th July 2023, U.S Empire State Manufacturing Index – the New York based report is expected to have a negative reading. It should be noted June’s data came in stronger than expected. Another positive surprise outcome would continue to show economists are finding it difficult to gauge the U.S economy. Last Friday’s solid Consumer Sentiment reading from the University of Michigan highlighted the rather complex results from the U.S, weaker than expected inflation numbers are also factoring into a muddled sentiment. However, the Federal Reserve is still believed to be leaning towards another interest rate hike on the 26th of July. Day traders should remain alert.

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USD/CAD 3 Month Chart as of 17th July 2023

Tuesday, 18th July 2023, Canada Consumer Price Index – the inflation numbers from Canada are expected to show a slight decrease in the velocity of rising prices. The numbers are likely to affect the USD/CAD which is trading near lows last challenged in September of 2022.

Tuesday, 18th July 2023, U.S Retail Sales – considering last week’s improved Consumer Sentiment numbers recently from the States, demonstrating better retail results compared to last month will not be a surprise. Earnings season on Wall Street gets underway this coming week and solid Retail Sales numbers may help mid-term outlook regarding equities. However, behavioral sentiment is fragile.

Wednesday, 19th July 2023, U.K CPI – the inflation numbers from Britain are expected to show a slight decrease in the rate of price expansion, but any result above 8% via the broad data will not make many folks feel better. GBP/USD speculators should monitor the reports.

Thursday, 20th July 2023, U.S Existing Home Sales – the rising costs of mortgages in the States is having an effect on the marketplace. Signs of stress in housing is an intriguing barometer regarding the outlook for the American economy. Better Consumer Sentiment and Retail Sales mixed with less than glowing numbers from the housing sector could make for a troubling diet for traders to consider and act upon.

Friday, 21st July 2023, U.K Retail Sales – recessionary results are shadowing Britain. Poor results from the retail sector would not help behavioral sentiment, particularly if inflation numbers have continued to show they are unrelenting two days before. The Bank of England is in an uncomfortable spot, this as the GBP/USD trades near highs it last saw in April of 2022.

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Week Ahead: Inflation will be the Crucial Word for Investors

by with No Comment AMT MarketsBehavioral SentimentFeatured Highlights

Week Ahead: Inflation will be the Crucial Word for Investors

Last week finished with another reminder that inflation cannot be easily scoffed at by investors who continue to believe higher prices will eventually slowdown. Average Hourly Earnings last Friday came in above the expectation and this was enough to rattle Wall Street again, which saw the major equity indices decline and bond yields incrementally rise. Inflation ‘talk’ will remain important this week because of coming U.S data.

Real Estate including REITS becoming a Topic of Discussion as Mortgages Rise

Market watchers should also pay attention to news regarding mortgages on residential homes, and listen for troubles from the commercial real estate market, as these sectors deal with rising interest rates in the U.S and U.K. Increased nervousness within these markets could have an affect on behavioral sentiment. Let’s remember the catalyst for the financial crisis of 2007 was the real estate sector.

Which brings us back to inflation and the growing acceptance among investors the U.S Federal Reserve may be ‘forced’ to hike the Federal Funds Rate on the 26th of July, if price data continues to come in ‘hot’. Some investors will likely be heard saying an increase of 0.25% has already been factored into marketplace, but the prospect of another hike in late 2023 could be problematic. Forex, gold and bonds dynamics will tell us a lot when this week concludes regarding outlooks.

BNB/USD Price Should be Monitored as Binance Trembles

An outside source of financial and speculative news is likely to come from cryptocurrency. If you are gambling on this asset class (or should we say commodity based on hot air) and like the adventure of wagering, please continue to pay attention to Binance which is showing signs of duress. If the Binance cryptocurrency exchange shows additional signs of pressure on its BNB (Binance Coin), trading waters within the world of crypto could trigger additional drowning victims. If you thought the Sam Bankman-Fried story made interesting news last year regarding fraud and other criminal activity, the FTX saga could prove to be only the tip of the iceberg.

Data Events Ahead to Watch

Monday, 10th of July, China CPI and PPI – the inflation data could prove important for investors who correlate economic statistics from China into their global forecasts. Traders within India should pay attention to these Chinese price reports, because global investors are starting to shift their assets into the Nifty 50 and other NSE equities because of risk and reward equations.

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GBP/USD One Month Chart as of 9th July 2023

Tuesday, 11th of July, U.K Claimant Count Change and Average Earnings Index – the numbers need to be watched by GBP/USD speculators. The results from the U.K will be intriguing because of employment results, but more importantly for inflation concerns and the knock-on effects. Bank of England Governor Andrew Bailey is speaking a few times this week, and this includes Wednesday the 12th of July, when he will talk about the Financial Stability Report. The GBP/USD has moved towards monthly highs recently.

Wednesday, 12th of July, New Zealand RBNZ Official Bank Rate – NZD/USD day traders will want to pay attention to the central bank’s Rate Statement. While no increase of interest rates is predicted, the Reserve Bank of New Zealand at a minimum will likely have to admit inflation remains a concern.

Wednesday, 12th of July, U.S Consumer Price Index – the inflation reports from the States will have all eyes on the outcomes of the monthly and annual comparisons, including the Core numbers. The results from these inflation statistics will certainly cause momentary volatility within Forex with the USD as the focal point.

Wednesday, 12th of July, Canada BoC Overnight Rate – the Bank of Canada is expected to hike its interest rate by 0.25% to the 5.00% mark. USD/CAD will react to the BoC Rate Statement based on its outlook.

Thursday, 13th of July, U.K Gross Domestic Product – the ‘growth’ numbers are not expected to be positive. A drop of minus -0.3% is the expectation. Talk of recessionary pressures in Great Britain will be heard. Unfortunately, the discussion about a struggling economy, mixed with stubborn higher prices for consumers and mortgage rates that are rising will not make for calm stomachs. U.K equity results via the FTSE 100 Index should be monitored.

Thursday, 13th of July, U.S PPI – the Producer Price Index figures will be the last cog within the important inflation data for the week. Stubborn prices for wholesale goods are a concern, because the costs to consumers becomes more expensive when there are higher price pressures.

Friday, 14th of July, U.S Consumer Sentiment via the University of Michigan – if the Consumer Sentiment readings from the UofM report improves, and the U.S inflation data which was released earlier this week has proven stubborn, this could become a source of pain for investors who may be forced to consider the Fed will not only raise the Federal Funds Rate late July, but later in 2023 also. Short-term traders should monitor this report accordingly.