Weekly Review 8th July
GBP
The big news last week is that the UK has a new leader in Keir Starmer as Labour won a landslide election. The pound performed well against the Dollar finishing the week 2 cents higher and closing above 1.28.
There are indications that the UK economy is starting to show signs of momentum. The British economy grew faster than any other G7 country in Q1 and inflation has fallen to the 2% target. Consumer confidence is also improving, however, the MPC maybe hesitant to cut rates because forecasts and some economists have inflation heading back up 2.5% by the Autumn.
USD
The US Presidential debate is still a hot topic, some Democrats openly questioned whether Joe Biden should be replaced as their candidate for the 2024 election.
Disappointing macroeconomic data releases from the US caused the USD to face strong selling pressure. The ADP reported that private sector payrolls grew below the market expectation of 160,000, and the ISM Services PMI slumped to 48.8 in June from 53.8 in May – pointing to a contraction in the service sector’s business activity. More positively, Non-Farm Payrolls came in above expectation on Friday with 206k new jobs created.
EUR
The annual inflation rate in the eurozone eased in June to 2.5%, aligning with expectations and bolstering increasing hopes of another interest rate cut by the European Central Bank. Retail Sales dropped to 0.1%, lower than forecasts at 0.2% and there are some concerns that domestic price pressures could stay at elevated levels.
Political uncertainties are set to continue driving market volatility in Europe amid the surprising outcome of the French election on Sunday. France could now face months instability after none of the three major parties were able to achieve a majority at the second round of elections.
This week’s Data:
09th / 10th July
FED chair Powell testimony & Speech
11th July
German Inflation Rate (YOY) – forecast at 2.2%
UK GDP 3 month average and (YOY) – forecast at 0.7% and 1.2%
US Core inflation (YOY) – forecast at 3.4%
US Inflation rate (YOY) – forecast 3.1%
12th July
US PPI MoM – forecast 0.1%
US Michigan Consumer Sentiment – forecast 68.5
For more information contact Jack Entwistle, tel 07961777463 or visit www.aureusfx.com’
