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Week Ahead – Vaccine enthusiasm vs faltering recovery

Posted on July 17, 2020 at 11:30 am GMT

It’s a quiet week as far as scheduled events go, with the main highlight being the EU summit about the recovery fund, which exposes the euro to weekend risk. What will truly drive markets though, is the ongoing clash between hopes for a virus vaccine and worries that the economic recovery is ‘levelling off’. It’s a close call, but the market’s inability to really push higher even after promising vaccine news, combined with the Fed’s balance sheet shrinking, are ominous [..]

US retail sales: Outdated good news? – Forex News Preview

Posted on July 15, 2020 at 2:19 pm GMT

America reports retail sales for June at 12:30 GMT Thursday, and while forecasts point to another increase, the data may be seen as outdated already. The outlook for consumption took a severe hit in late June as several states rolled back re-opening plans, so investors will likely wait for July data before drawing any conclusions about the US recovery. As for the dollar, its direction might hinge mostly on risk sentiment, the Fed, and funnily enough, on the upcoming EU [..]

China could return to growth in Q2 amid geopolitical bullying woes – Forex News Preview

Posted on July 15, 2020 at 1:13 pm GMT

China releases GDP readings for the second quarter on Thursday at 02:00 GMT along with industrial production for June, retail sales and fixed investment data. All figures are forecast to strengthen, indicating that the world’s second largest economy is recovering albeit gradually after contracting at a record rate. The data could boost risk sentiment, though China’s cloudy political background could be a reason for traders to adopt a wait-and-see approach. China could grow by 2.5% y/y in Q2 China’s GDP [..]

ECB to hold fire as Eurozone outlook brightens, but divisions may jolt euro – Forex News Preview

Posted on July 15, 2020 at 9:40 am GMT

The European Central Bank is expected to take a pause in its pandemic response and keep policy unchanged when it announces its latest decision on Thursday at 11:45 GMT. Having been the epicentre of the Covid-19 pandemic at one point, Europe is now one of the few regions in the world that has so far managed to avoid a resurgence. Hence, investors are growing more confident about the recovery of the euro area and President Christine Lagarde will probably echo [..]

BoC meeting: With a little anxiety from the US – Forex News Preview

Posted on July 14, 2020 at 10:03 am GMT

The Bank of Canada (BoC) will wrap up its policy meeting at 14:00 GMT Wednesday, and while no action is expected, the accompanying statement could still be crucial. Even though the Canadian economy is healing, the resurgence of infections in the US is scary given Canada’s exposure to America, and might lead policymakers to strengthen their easing bias. If so, that would argue for a negative reaction in the loonie. Longer term though, the stage seems set for a powerful [..]

Pound eyes UK GDP rebound but data to stress steep mountain to climb – Forex News Preview

Posted on July 13, 2020 at 2:53 pm GMT

Economic data out of the United Kingdom will be flooding the markets over the next few days with Tuesday’s monthly GDP print being the main highlight. The scheduled releases on growth, production, inflation and employment should reveal how the economy fared in May and June when Britain was gradually emerging from lockdown. But as output recovers from a record drop in April, the pound has moved to the bottom of the 2020 performance table as investors fear about the UK’s [..]

Week Ahead – US, China data to keep recovery theme going; ECB, BoJ and BoC meet

Posted on July 10, 2020 at 12:38 pm GMT

There will be no shortage of big headline events over the next few days as major data releases, central bank meetings and an EU gathering should make for a busy week. However, the primary focus will be on the recovery story amid further spikes in coronavirus cases in several countries, including the United States. Retail sales numbers out of America and second quarter GDP figures from China should reveal whether the growth rebound is maintaining momentum. On the other hand, [..]

Loonie left behind in risk rally, can jobs data help? – Forex News Preview

Posted on July 8, 2020 at 2:01 pm GMT

The Canadian dollar has underperformed other G10 commodity currencies lately, eating the dust of the aussie and the kiwi since markets bottomed in March, despite a powerful rally in oil prices. This might reflect uncertainties emanating from the US, which Canada’s economy is highly exposed to, and the threat of new tariffs. The upcoming jobs data at 12:30 GMT Friday could finally bring some good news, though the loonie’s broader direction in the coming weeks will depend mostly on risk [..]

Week Ahead – Markets torn between conflicting narratives

Posted on July 3, 2020 at 12:48 pm GMT

The coming week looks relatively quiet in terms of crucial events, with the only highlights being the Reserve Bank of Australia (RBA) policy meeting and some economic data out of the US and Canada. As such, the dominant theme that will likely drive both currency and equity markets will be how the global virus picture evolves, particularly in the US, as the epic battle between stimulus-powered bulls and virus-fearing bears rages on. Bears wave the white flag Global markets continue [..]

RBA to stay put as flare-up threatens Australia’s envious virus record – Forex News Preview

Posted on July 3, 2020 at 12:41 pm GMT

The Reserve Bank of Australia is almost certain to keep monetary policy unchanged on Tuesday when it announces its decision at 4:30 GMT. Australia is one of only a handful of countries that can boast a successful virus containment policy and that success bodes well for its economy as it allows the RBA to take a backseat, which in turn is boosting the local dollar. However, with even Australia now facing a resurgence of coronavirus cases in some districts, will [..]

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