US Production Prices Growth Unnerves Markets

US producer prices, both including and excluding food and energy, rose 0.3% m/m in July. This is the first positive surprise for the indicator in six months – before this, prices had regularly missed average forecasts, supporting expectations of a rapid easing of price pressures.

Week Ahead – A Busy Week Ahead! FOMC Minutes, US Retail Sales, UK Jobs/CPI, RBNZ Decides and Japan GDP/CPI

With Wall Street very confident that the Fed won’t be raising rates in September, the focus shifts to how strong is the economy and whether it is too robust and if that could sparking fear that inflation might reaccelerate.

Weekly Economic & Financial Commentary: Inflation Continues to Ease

Price pressures in the U.S. economy continue to subside. During July, both the headline and core Consumer Price Index (CPI) rose 0.2%. On a year-over-year basis, the core CPI was up 4.7% in July. Recent signs have been more encouraging, with core CPI running at a 3.1% three-month annualized pace. Furthermore, July's Producer Price Index (PPI) and NFIB Small Business Optimism Index also suggest that underlying inflation is dissipating.

US Yields Keep Rising Given Speculation of More Hawkish Federal Reserve

10Y US Treasury yields moved higher on Friday on the back of higher than expected producer prices. Given the hawkish comments from some of the Federal Reserve members the markets will read the minutes from the FOMC meeting extra carefully when it is released on Wednesday.

Aussie Under Pressure Ahead of Wage Growth Release

Australian dollar extends losses Australia’s wage growth expected to rise Chinese Industrial Production projected to remain unchanged The Australian dollar started the week by dropping 50 basis points but has recovered most of these losses. In the European session, AUD/USD is trading at 0.6488, down 0.12%. It has been a rough ride lately for the […]

Quiet Crypto Awaits a Signal from Senior Markets

During the week, the crypto market gained 0.7% and showed very low volatility over the last four days, with movements around the $1.17 trillion level. The Cryptocurrency Fear and Greed Index moved into neutral territory and is now in the middle – at 50.

RBNZ Meets as Kiwi Records a New 2023 Low Against US Dollar

While the month of August is not usually associated with rate-setting meetings, the Reserve Bank of New Zealand holds its 5th gathering for 2023 on Wednesday. No fireworks are expected but there is a very small chance of the Committee adopting a slightly more hawkish tone to support the ailing kiwi, especially against the US dollar.

Busy Data Calendar But Will Yen Take Notice of Any Possible Upside Surprises?

Japanese data releases continue unabated by the summer lull as this week’s calendar includes the preliminary GDP print for the second quarter of 2023 and the July national inflation report. Barring a plethora of upside data surprises, only the resurfacing of the intervention rumours could provide a helping hand to the yen, especially against the euro.

GBP/USD Steady Ahead of Jobs Data

The UK releases key employment numbers on Tuesday and the data is expected to show that the UK labour market remains tight. The economy is expected to have created 50,000 jobs in the three months to June. That number is down from 125,000 previously, but unemployment claims are expected to drop by 7,300, down from a gain of 25,700 previously. Most importantly, wage growth including bonuses is expected to jump to 7.3% in the three months to May, compared to 6.9% in the previous three months.

Japanese Yen Hits 9-month Low

Japanese yen dips below 145 line Japan’s GDP expected to expand by 3.2% US retail sales projected to rise by 0.4% The Japanese yen continues to slide. USD/JPY touched the symbolic 145 line on Friday and has moved higher on Monday. In the North American session, USD/JPY is trading at 145.37, up 0.27%. The yen […]