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Week Ahead – Fed meets as virus storm worsens; US and Eurozone set for historic GDP collapse

Posted on July 24, 2020 at 12:26 pm GMT

As US politicians squabble over the next fiscal stimulus bill and the country’s virus death toll ticks up again, markets may lean on the Federal Reserve next week for a quick fix. The Federal Open Market Committee (FOMC) meeting will undoubtedly be the most eagerly awaited event of the week. But second quarter GDP prints out of the United States and the euro area will not be far behind as the full extent of the economic shock from COVID-19 is [..]

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European PMIs: More good news for the euro? – Forex News Preview

Posted on July 23, 2020 at 12:23 pm GMT

With the EU recovery fund deal now in the rear-view mirror, euro traders will turn their sights to the Eurozone’s preliminary PMIs for July, due at 08:00 GMT Friday. Forecasts point to an uptick in all indices, reflecting the smooth re-opening process in Europe. If so, this would be another piece of good news for the high-flying euro, whose rally may still have room to run, especially if the Fed hurts the dollar next week.    Europe vs America? It’s [..]

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UK retail sales and PMIs to put recovery on track but Brexit lurks in the background – Forex News Preview

Posted on July 22, 2020 at 2:25 pm GMT

Economic data out of the United Kingdom this week is expected to show the recovery gathered pace after the lifting of more lockdown restrictions in June and July. June retail sales figures are due on Friday at 06:00 GMT and will be followed by the flash PMI prints for July at 08:30 GMT. Upbeat numbers could bolster the pound’s advances, having bounced to the $1.27 region in the last few sessions. But Brexit woes risk spoiling cable’s mini rally amid [..]

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Canadian inflation and retail sales to drive loonie – Forex News Preview

Posted on July 22, 2020 at 12:19 pm GMT

Canada will publish its retail sales data for the month of May at 1230 GMT on Tuesday before releasing inflation figures for June at the same time on Wednesday. Given its sharp tumble in the preceding month, the retail sales report could be the most important market mover among data releases for the loonie this week, which has just managed to stabilize from last month’s sell-off. Why the Bank of Canada is avoiding a rate cut The Bank of Canada (BoC) kept its interest [..]

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EU recovery fund done; what’s next for euro rally? – Forex News Preview

Posted on July 22, 2020 at 12:18 pm GMT

EUR/USD is poised to re-activate the bullish cycle that was interrupted by Covid-19 in early March after the EU recovery fund finally took shape. Fundamentally and technically, the pair has several reasons to hope for better days, but the euro may need to win the data competition against the dollar during the summer break in order to reach fresh highs. Recovery fund deal accomplished It was an intense four-day summit in Brussels as EU leaders struggled to agree on a recovery fund that [..]

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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 [..]

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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 [..]

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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 [..]

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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 [..]

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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 [..]

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