The market sentiment improved amid the slowdown in virus cases. Let's have a closer look at the AUD, S&P 500, gold and the GBP.
5 important things this week will bring us!
- British CPI y/y (Wed, 11:30 MT time) - The level of inflation for September declined to 2.4% from 2.7% in August. The index dropped because of a slowdown in food, transport, recreation, and closing prices. This month it is expected to reach 2.5%. Will it support the struggling GBP?
- US CPI & core CPI m/m (Wed, 15:30 MT time) – the level of inflation in the United States rose by 0.1% in September, as well as the core inflation excluding energy and food. In October, CPI and core CPI are forecast to come in 0.3% and 0.2% respectively.
- Australian employment change & unemployment rate (Thu, 2:30 MT time) – Australian level of employment increased by 5,600 jobs in September. This release came out lower than expected 15,200 jobs. In October we anticipate Australia to add 20,300 jobs. At the same time, the unemployment rate fell to 5% in September from 5.3% in August. Analyst forecast the level of unemployment to reach 5.1%.If the employment change is higher than expected and the unemployment rate is lower than expected, this will be the good news for the Australia dollar.
- British retail sales m/m (Thu, 11:30 MT time) – UK retail sales fell by 0.8% in September, worse than forecasts of -0.4%. In October, the indicator is expected to increase by 0.1%
- US retail sales & core retail sales m/m (Thu, 15:30 MT time) – As for the US data, last month the level of retail sales came out lower than expected. It rose by 0.1%. This time we expect the indicator to increase by 0.6%. Speaking of core retail sales, it declined by 0.1% in September. In October, the change in sales excluding automobiles is forecast to increase by 0.5%. Higher-than-expected data will support the US dollar.
- The British pound extends falls as the European Union rejected the latest May’s plans for an independent mechanism that would allow Britain to leave from any temporary customer agreement. In addition, 4 British ministers are on verge of quitting Theresa May’s government over Brexit.
- At the beginning of this week, the Italian government prepares to resubmit its draft budget. The target deficit of 2.4% would remain unchanged, however, Italy may set a growth target of 1% instead of a previous target of 1,5%. We will keep an eye on a European Commission deadline on Tuesday.
- During the OPEC+ the plans for cutting the supply in 2019 were announced. OPEC+ would keep inventory in a narrow band and maintain a long-term market balance. It supported oil prices.
Have a successful week of trading!
The RBA will make a rate statement on August 4 at 7:30 MT time.
The overall market sentiment is mixed as new virus cases continue rising throughout the world, but most economic indicators came out better than analysts expected. Let’s look at the main market movements.
The US NFP will be published on August 7 at 15:30 MT time.
The market sentiment is indeed risk-on today. Stocks, riskier currencies and gold are rising amid the waning US dollar.
Follow the BOE monetary policy and rate statements on August 6 at 14:00 MT time…