All attention on the market is on the Brexit process. Fears over the no-deal Brexit pushed the British pound deep down yesterday after UK Prime Minister Boris Johnson claimed he was ready to abandon negotiations.
Euro zone business surge speeds down more than expected
In July, euro zone business surge speeded down more than anticipated because worries over a trade conflict with America as well as a weaker global expansion affected market sentiment, as a poll uncovered on Tuesday.
However, surge was still firm in the face of soaring prices. Meanwhile, the ECB policymakers are considering moving away from their current extremely loose monetary policy.
Traditionally considered to be a gauge of economic health, IHS Markit's Euro Zone Composite Flash Purchasing Managers' Index headed south in July hitting 54.3 in contrast with June's outcome of 54.9, confounding all estimates in a Reuters survey that hoped for 54.8. By the way, the figure above 50 stands for surge.
In addition to this, in July, Germany's private sector managed to ascend faster than anticipated, as earlier figures uncovered, although French business surge relieved more than anticipated. Germany and France appear to be the only euro zone members to boast flash numbers.
Worries that trade conflict around the globe is worsening have impacted confidence. Additionally, the future output index, gauging optimism, edged down from 63.4 to 63.0, thus become its lowest outcome since late 2016.
Meanwhile, America slapped duties on some Chinese imports, threatening to continue, Donald Trump dared to label the EU as a trade enemy of the United States.
Market experts point out that with the risk of a full-fledged trade conflict soaring steadily, it makes no sense to expect any sustained improvements in industry confidence and export orders for the next months.
A PMI, which covers the European bloc's dominant service industry, inched down to 54.4 from June's reading of 55.2, confounding hopes for a shallower sink to 55.0.
However, factories ramped down their purchasing of raw materials. Besides this, the quantity of purchases index edged down from 53.3 to 53.0, which is its lowest value since September 2016.
The market sentiment is mixed, and the US dollar is trading near the lowest levels for over two years. Let’s have a look at the main market movements today.
The market sentiment deteriorated because of the election uncertainty and worries about rising virus cases all over the world. Let's make some analysis!
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.