Yesterday’s market movers
- In Germany we had Producer Price Index YoY June come out better than the expectation, which push the euro gaining against US dollar.
- The main focus of the day was Bank of England Minutes, which gave out the vote result of the interest rate change decision – 2 to 7 in favour of keeping the interest rate unchanged. Sterling picked up its position against US dollar after the news was released, pulling back to the 1.61 level.
- Later in the US we had the housing data with a negative figure for June. Existing Home Sales fall to 7-month low. This further devalued the dollar hence we saw Euro staying around 1.42 in spite of the worse than expected EU Consumer Confidence later on.
Today’s market movers
- EU EcoFin is continuing their meeting where we are expecting further solutions to be found to avoid a contagion enveloping Italy and Spain. This morning we have had support from the German and French agree to make effort on it and supported the euro for 0.4% early morning.
- Germany PMI Services/ Manufacturing July are expected to drop in comparison of previous performance, which might indicate a slowdown of the economy. Euros will probably dip down on the back of the negative PMIs.
- UK Retail Sales June is predicted to decline slightly from last month. However, Retail Sales ex-Fuel is estimated to grow from the previous. This figure is considerably important for indicating the economy in UK. If we have positive retail sales today, the pound could have a modest support.
- At the same time, UK Public Sector Net Borrowing is to be shrunk according to the market consensus. This could be another positive support for Sterling.
- In the US, Philadelphia Fed Manufacturing Survey July is expected to be better and Leading Indicators is to be worse. Again, the weak dollar from yesterday will probably need a stronger support such as the solution for US debt ceiling crisis to gain back its lost.