Daily Market Report 24/07/2013

A very quiet day on Tuesday in terms of both economic data and movements on the currency markets could be the calm before the storm.

UK mortgage approvals were up from May although just failed to meet the expected figure. Euro zone consumer confidence also failed to meet the forecast however both of these announcements failed to make any significant dent in the levels. The pound traded in a 20 pip range against the euro all day. It is interesting to note that the euro zone consumer confidence was actually the healthiest figure for almost 2 years.

Today's data will be seen as more of a critical indication as to the health of the euro zone. PMI services and manufacturing data released this morning all came out positive with the two respective sectors expanding in Germany and the euro zone as a whole for the first time in 18 months.

The euro has been able to remain consistently strong over the last 6 weeks despite the political uncertainty within Europe, growth forecasts cut in Italy and rumours of further interest rate drops have all failed to really hinder the performance of the single currency.

During the early hours on Tuesday morning Australia’s inflation has fallen leading to the Australian dollar weaken marginally. The Chinese manufacturing PMI was also released overnight leading to a decline in early trading on global share prices.

The UK will be bracing itself for the second quarter GDP figures on Thursday morning which are predicted to increase. The performance of the pound will hinge on this news so any deviation from the expected figure could see some significant movements.

Key Announcements:

11.00am – GBP – CBI Industrial Trends Survey Orders (Jul): Expected to improve to -12.

12.00pm – USD – MBA Mortgage Applications (Jul 19): Previous figures showed a fall of 2.6%.

13.58pm – USD – Markit Manufacturing PMI (Jul): Expected to remain at 51.9.

15.00pm – USD – New Home Sales (Jun): Expected to improve to 485,000.

15.00pm – USD – New Home Sales Change (Jun): Expected to fall to 1.8%.

22.00pm – NZD – RBNZ Interest Rate Decision (Jul): Expected to remain at 2.5%