The following 5 trading days have something for everyone with key data points coming out of all the major economic regions. Risk sentiment remains strong while the greenback continues to be pressured, racking up 7 straight weeks of losses. Politics will also feature this week after the US Congress failed to strike a 3rd stimulus package on Friday.
Last week’s non-farm payroll report was a strong one. 1.76 million jobs were added to the economy in July, beating expectations of 1.6 million. The figure came as a surprise after the mid-week ADP shock. This backs up the idea that the correlation between the 2 data points continues to weaken. The positive NFP number helped the US dollar reverse a small portion of its losses, however, it still closed the week lower against many of its major counterparts.
It’s a big week for the UK. An updated read on employment data will arrive on Tuesday morning. This will be followed by the all-important Q2 GDP release, which is expected to show a 20% fall in output. Sterling should take its cues from these reports. Additionally, any developments on the Brexit front could have a material impact on the direction of GBP this week.
Elsewhere, US inflation, retail sales, and initial jobless claims will all be closely eyed this week. From China, industrial production and retail sales will be on tap. Lastly, eurozone Q2 GDP is scheduled for release as well.
Have a good week.
Written by Viv Savani. 8:40am, August 10th 2020
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