Sunset Market Commentary

In the US, ADP private job growth slowed lightly more than expected to 177k. Last month’s impressive 324k growth was revised even higher to 371k, suggesting a still healthy US job market this summer.

Eurozone Inflation Taking Centre Stage ahead of ECB September Meeting

Eurozone inflation. The preliminary inflation figures for Germany and Spain were the main story in markets yesterday. The headline inflation in both Spain and Germany came in higher than expected, and the monthly dynamics in the core measure is still well above 2% on an annualized basis. We also expect this to be the case for the euro area HICP data at 11:00 (CET) today which we expect could add support to the case of a final 25bp rate hike from the ECB in September.

EUR/USD's Downside Limited from Daily Perspective

EUR/USD’s downside is limited from a daily perspective. Several ECB and Fed speeches are scheduled for today as are the ECB’s meeting minutes of the July meeting. They serve as a wildcard for trading.

Crypto Market Cools Down; XRP in Accumulation Phase

The crypto market is cooling after a surge in buying on the 29th, losing 0.8% over the past 24 hours to $1.085 trillion, but still almost 4% higher than before the jump. Crypto Fear and Greed Index has returned to neutral territory after a week and a half of wandering in “Fear”.

Eurozone Core Inflation Falls Further, Weighing on Yields and Euro

Eurozone economic indicators this morning have been something of a mixed bag, although traders seem enthused on the back of them rather than disappointed.

Sunset Market Commentary

German ECB governing council member Schnabel set the tone for trading today immediately after the European opening bell. Her nationality makes her monetary hawk both by nature and by nurture.

US: Consumer Spending Expands, Even as Prices Tick Higher in July 

Personal income grew 0.2% month-on-month (m/m) in July, which was below market expectations for a gain of 0.3%. This marked a slight deceleration from the prior month's 0.3% gain. The increase primarily reflected a rise in compensation to employees that was partly offset by a decrease in personal current transfers.

USD/CHF Rises as Swiss Retail Sales Fall, Swiss CPI Next

Thursday’s Swiss retail sales for July looked awful, falling 2.3% m/m. This follows a revised gain of 1.5% in June. Market attention has now shifted to Swiss inflation, which will be released on Friday. Swiss inflation dropped to 1.6% in July, the lowest level since July 2022. The downtrend is expected to continue in August with a consensus estimate of 1.5%.

A Jump in Consumer Spending May Be Bad News for US Indices

Personal spending by Americans in July points to increased risks of a return to inflation. Consumer spending rose 0.8% in July, following a 0.7% increase a month earlier. Meanwhile, incomes rose 0.2% in July and 0.3% in June. Disposable personal income was unchanged in July after increasing 0.2% a month earlier.

RBA Board on Hold Next Week – Next Move Will Be Down

The Reserve Bank Board meets next week on September 5. We are confident that the Board will decide to keep rates on hold at the meeting. Following the Board's decision to hold rates steady at the August meeting we concluded that rates would remain on hold until the September quarter next year when the first rate cut of 0.25% can be expected.