Last week U.S. consumer sentiment showed a fall to the lowest level in nearly a decade as Americans grew more concerned about the economy’s prospects, inflation and the recent surge in coronavirus cases. This slump risks a longer and more pronounced slowing in economic growth, and implies a worry that the pandemic is not over or declining.
Further the CPI data remained elevated which puts pressure on the FED’s view that it is transitory.
Later this month the Federal Reserve’s Jackson Hole symposium occurs and normally causes USD currency moves however this time its potential to sway currency markets may be muted. Implied volatility for EURUSD around the Aug. 26-28 event suggests smooth sailing. Investors appear to be more concerned with Sept. 3 U.S. payrolls report and Sept. 22 Fed rate decision to guide their currency positions.
Holidays and awaiting data leaves the USD against major pairs rangebound until the FED taper becomes clearer.
In contrast to past weeks, we have a lot of data across geographic regions with inflation data in Europe and production data in the USA. European inflation is expected to show moderation.
With the consumer worries it will be interesting how retail sales and industrial production show up – there’s an expectation that retail sales will suffer month on month.
We have FOMC minutes and the usual rules apply; the market will pick out the details for clues as to taper timings.
Date | Country | Figures | Expected | Previous |
Aug 17 | GBP | Unemployment | 4.8% | 4.8% |
| EUR | GDP (QoQ) | 2% | 2% |
| USA | Retail Sales MoM | -0.2% | 0.6% |
| USA | Industrial Production MoM | 0.4% | 0.4% |
| USA | Powell Speaks |
|
|
Aug 18 | GBP | CPI YoY | 2.2% | 2.5% |
| GBP | RPI MoM | 0.4% | 0.7% |
| EUR | CPI MoM | -0.4% | -0.4% |
| USA | FOMC minutes |
|
|
Aug 19 | USA | Initial Jobless Claims | 360K | 375K |
Aug 20 | China | PBoC interest rate |
|
|
| GBP | Retail Sales YoY | 6.4% | 9.7% |
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